HomeMy WebLinkAbout_ 4.5(d)--Award of Request for Qualifications No.5425 -Providing Refurbished Distribution TransformersC IT Y OF
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AN CITY OF REDDING
REPORT TO THE CITY COUNCIL
MEETING DATE: March 19, 2024
FROM: Nick Zettel, Director of
ITEM NO. 4.5(d)
Redding Electric Utility
***APPROVED
BY***
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UBJECT: 4.5(d) --Award of Request for Qualifications 5425 - Providing Refurbished
F
istribution Transformers
Recommendation
Authorize the following actions relative to Request for Qualifications No. 5425, Providing
Refurbished Distribution Transformers, for the City of Redding Electric Utility, aimed at
addressing the shortage of distribution transformers, in conjunction with allocated funds from the
budget:
(1) Approve awarding Request for Qualifications No. 5425 to General Pacific, Inc. and
Emerald Transformers for combined purchases not -to -exceed $500,000 per contract year
through February 28, 2025; and
(2) Subject to satisfactory performance by the vendors and availability of funds, authorize
the Purchasing Officer to extend the contract for four additional one-year periods through
February 28, 2029.
Fiscal Impact
The purchase of transformers was included in the City of Redding Electric Utility's (REU)
General System Improvements Fiscal Year 2023-25 Biennial Budget and the Aging
Infrastructure Replacement Project for Electric Utility Line Construction Services. In the five-
year plan presented to the City Council (Council), REU anticipated these projects may be bond -
funded. If capital expenses related to these efforts are projected to exceed the approved budget,
staff will return with additional recommendations related to budgetary adjustments and financing
options.
Alternative Action
The Council could choose not to authorize the recommended actions relative to Request for
Qualifications No. 5425 and provide alternative direction to staff.
Report to Redding City Council March 8, 2024
Re: 4.5(d) --Award of Request for Qualifications No.5425 -Providing Refurbished Distribution
Transformers Page 2
Background/Analysis
City staff have been managing procurement options of distribution transformers during an
ongoing nationwide supply chain shortage. Staff efforts to secure transformers through the
conventional bidding process have been met with two- to three-year lead times, significantly
delaying our ability to address the current shortage. Additionally, the City of Redding (City) is
experiencing increased development and electric vehicle charger installation requests, further
straining the current inventory of distribution transformers.
With Council's support, staff had taken various measures to diversify our supply of distribution
transformers. On December 19, 2023, the City awarded Bid Scheduled 5409 to Emerald
Transformers to refurbish REU transformers removed from service. Refurbishing transformers is
a cost effective and timely option that has not historically been utilized by REU. On December
19, 2023 Council authorized the City Manager to ratify the purchase of three surplus
transformers from Emerald Transformers. These three large transformers were critically needed
for existing customer work orders, and this was the only viable method of procurement. On
January 16, 2024, Council awarded Bid Schedule 5427 for Padmount Distribution to Hyundai
Corporation, which is the first time REU has purchased transformers from an international
supplier.
In yet another effort to diversify the supply of transformers, staff issued a Request for
Qualifications (RFQ) No. 5425 for vendors that offer refurbished transformers for sale. This
option will enable the City to purchase small quantities of refurbished overhead and pad mounted
distribution transformers as they are offered to the market by the qualified vendors. This
procurement method provides another option for sourcing transformers that has not previously
been utilized by the City. The City directly solicited eight vendors known to engage in this type
of service, and the RFQ was also advertised in the local newspaper and the City's website.
On Friday, January 12, 2024, the City received proposals from two firms, General Pacific, Inc
and Emerald Transformer. Subject -matter experts within REU reviewed the Statement of
Qualifications submitted by both firms; the vendors demonstrated the experience and
qualifications necessary to provide the City with refurbished distribution transformers.
Establishing a refurbished transformer vendor list does not guarantee that a transformer will be
purchased for any project but will be purchased based on REU's need to ensure minimum
inventory levels and as vendor inventory meets REU transformer specifications.
Granting approval for staff to purchase refurbished transformers from approved vendors will
allow staff to act more quickly than allowed by the traditional public bidding process. The
standard procedure is not fast enough to acquire transformers promptly as they become available,
leading to missed opportunities due to purchases by other utilities. This permission will enable
REU to directly purchase transformers on an as -needed basis from General Pacific, Inc., and
Emerald Transformer. This approach aligns with our commitment to providing a reliable power
supply to our growing city and supporting its ongoing development.
Report to Redding City Council March 8, 2024
Re: 4.5(d) --Award of Request for Qualifications No.5425 -Providing Refurbished Distribution
Transformers Page 3
Environmental Review
This action does not fall under the scope of the California Environmental Quality Act, and no
further environmental assessment is required.
Council Priority/City Manager Goals
• Government of the 211t Century — `Be relevant and proactive to the opportunities and
challenges of today's residents and workforce. Anticipate the future to make better
decisions today."