DEPARTMENT Power Enterprise
AGENDA NO.
13 MEETING DATE
November 28, 2023
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
Authorize Memorandum of Understanding: Regular Calendar Project Manager: Danny Phung
Authorize Memorandum of Understanding, Airport Substation Transformer Bank Upgrade Project
Summary of
Proposed
Commission Action:
Authorize the General Manager to execute a Memorandum of Understanding (MOU) between the San Francisco Airport
Commission (the Airport or SFO), and the San Francisco Public Utilities Commission ( SFPUC) in an amount not -to-exceed $50,000,000, with a term starting December 4 , 2023, through December 31, 2028, for the Airport to procure
and manage
Project Management Support Services and design -build services to replace two existing Airpor t Substation transformers with three new 55MVA transformers and other supporting electrical systems
and for the SFPUC to reimburse the Airport for cost.
This action constitutes the Approval Action for the Project for the purposes of the California Environm ental Quality Act (CEQA), pursuant to San Francisco Administrative Code section
31.04(h). The Planning Department has determined that the Project is exempt from the CEQA. The Commission will rely on that determination to make its decision on this matter.
Background: The Power Enterprise’s largest customer is the Airport. The Power Enterprise provides Hetch Hetchy P ower service to the Airport utilizing two existing substations. Based on the Airport’s projected growth and changes in the use of electricity, t he SFPUC has identified the need for improvements at the
Substations to increase capacity to meet projected load increase and improve redundancy.
This MOU covers the project to
upgrade one existing substation (Airport Substation) out of the two existing Substations serving the Airport. There will be future MOU s that cover upgrades to the second substation (Substation MA) and construction of a third substation.
The Airport’s consultant, LEAN Technology Corporation,
developed the basis for desig n for these upgrades under authorization by Resolution No. 21-0108 to perform design work Agreement: Authorize Airport Substation Transformer Bank Upgrade Project Memorandum of Understanding Commission Meeting Date: November 28, 2023
to support the increased capacity and improve redundancy at the Substations for the Airport.
The SFPUC and the Airport have agreed that the Airport will procure t he Project Management Support Services and design- build services to execute the Airport Substation Transformer Bank Upgrade project. SFPUC will fund the work relating to the Project as outlined in the MOU , Service to be Provided (the “Services”) and reimburse the Airport for personnel time for management of the Services . Th e MOU document s the
agreement between the Airport and SFPUC.
Description of
Agreement:
The Airport will procure and award a contract for the Services listed below in connection with the Airport Substation
Transformer Bank Upgrade Project , also described in Section
1.A, Services to be Provided in the MOU:
• Project Management Support Services (“PMSS”); and
• Design-build services.
The SFPUC will fund the work relating to the Project as outlined in the MOU, Service to be Provided (the Services) and
reimburse the Airport for personnel time for management of the Services.
Upon execution of this MOU, the Airport and SFPUC shall mutually agree upon a process for SFPUC participation in the selection of the PMSS consultant and the design-build contractor and the performance of the Services throughout the term of this MOU. SFPUC participation will include:
• Determination of minimum qualification for proposers
and proposer review and selection;
• Approval of the engineering design and construction
plans; and
• Negotiate interconnection agreement with PG&E.
Parties to
Agreement:
San Francisco Airport Commission
and the San Francisco Public Utilities
Commission
Purpose: To provide electric services to the
Airport by Transformer Bank Upgrade
Project
Location: SFO (7th Ave and Angus Ave E in
San Bruno)
Commencement
Date:
Upon execution of the MOU by all
Parties
Agreement: Authorize Airport Substation Transformer Bank Upgrade Project Memorandum of Understanding Commission Meeting Date: November 28, 2023
Result of Inaction: A delay in authorizing this MOU will also delay the Project and hinder SFPUC’s ability to meet the demands of the Airport’s expected electric loads.
Budget & Costs: Not-to-Exceed Amount: $50,000,000.
Funds: Funds are available from Project No. 10033822 - SFO Substation Improvements. The SFPUC will provide funds
through a direct charge process and require the Airport to submit copies of PMSS consultant’s and design- build contractor’s invoices and/or receipts as documentation of costs to be paid by SFPUC and
invoices documenting the time spent by Airport
personnel and the all-in hourly rate for salary and fringe benefits monthly in accordance with the MOU.
The SFPUC is not required to reimburse the Airport for any costs beyond the Budget Amount or for any services beyond the Services listed in Section 1.A of the MOU , unless the Airport and SFPUC enter a written modification to th e MOU
documenting such changes.
The SFPUC will reimburse Airport for the actual costs of salary and mandatory fringe benefits for Airport personnel ’s
management of the Services for (1) procurement and
management of the Project Management Support Services
consultant and (2) procurement and management of the design- build services contractor.
Schedule: The term of this MOU is from December 4, 2023, to December 31, 2028.
Environmental
Review:
On June 26, 2023 , the San Francisco Planning Department determined the Project to be categorically exempt from
environmental review under California Environmental Quality Act (CEQA) Guidelines s ections 15301, Class 1 (Existing Facilities), 15302, Class 2 (Replacement or Reconstruction), and 15303, Class 3 (New Construction) under Case Number 2023- 004665ENV. The exemption determination
can be found here:
https://sfpuc.sharefile.com/d-
s42555e2235bd404e8be1f51c761db161
This action constitutes the Approval Action for the Project for the purposes of the California Environmental Quality Act (CEQA), pursuant to San Francisco Administrative Code section
31.04(h).
Recommendation: SFPUC staff recommends that the Commission adopt the Agreement: Authorize Airport Substation Transformer Bank Upgrade Project Memorandum of Understanding Commission Meeting Date: November 28, 2023
attached resolution.
Attachment: 1. Memorandum of Understanding
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, The San Francisco Airport Commission ( the Airport or SFO), and the San Francisco Public Utilities Commission (SFPUC), each of which is a department or agency of the City and County of San Francisco (City), are collaborating on Airport Electric Capacity Upgrade Program Services (the Program); and
WHEREAS, The SFPUC provides Hetch Hetchy power to the Airport through two SFPUC-owned substations located on SFO property, Airport Substation and Substation MA (the Substations). Based on its future load demand profile, the Airport has identified the need to increase capacity to meet anticipated demand through improvements made at the Airport Substation to increase capacity and improve redundancy for power supply scenarios outside of normal operations; and
WHEREAS, The SFPUC and the Airport wish to enter into a Memorandum of Understanding (MOU) wherein the Airport will procure the Project Management Support Services and design-build services to execute the Airport Substation Transformer Bank Upgrade project (the Project). The SF PUC will fund the work relating to the Project as outlined in the MOU, Service to be Provided (the Services); and
WHEREAS, The Project will replace the two existing Airport Substation transformers with three new 55MVA t ransformers (one will serve as a backup), the exist ing switchgear equipment, and other supporting electrical systems. SFPUC l operates the equipment that will be replaced. Replacing the existing transformers at the Airport Substation, each rated at 33/55 MVA, will provide the Airport with reliable power capacity to support current and future Airport energy demands and Airport operations. A ll Project construction will occur within the existing Airport Substation footprint; and
WHEREAS, The SFPUC will delegate to the Airport the SF PUC’s jurisdiction over the procurement, design, and construction of power facilities and equipment to the extent necessary to construct the Project. The Airport will provide its staff and resources and procure the project management support services consultant and the design- build contractor necessary to construct the Project; and
WHEREAS, Upon execution of this MOU, Airport and SFPUC shall mutually agree upon a process for SFPUC participation in the selection of the PMSS consultant and the design- build contractor and the performance of the Services throughout the term of this MOU. SFPUC participation will include determination of minimum qualification s for proposers and proposer review and selection; and
WHEREAS, On June 26, 2023, the San Francisco Planning Department determined the Project to be categorically exempt from environmental review under California Environmental Quality Act (CEQA) Guidelines sections 15301, Class 1 (Existing Facilities), 15302, Class 2 (Replacement or Reconstruction), and 15303, Class 3 (New Construction) under Case Number 2023-004665ENV; and
WHEREAS, Funds are available from Project No. 10033822 - SFO Substation Improvements. SFPUC will provide funds through a direct charge process and require t he Airport to submit copies of PMSS consultant’s and design- build contractor’s invoices and/or receipts as documentation of costs to be paid by SFPUC and invoices documenting the time spent by Airport personnel and the all -in hourly rate for salary and fringe benefits monthly in accordance with the MOU; and
WHEREAS, The SF PUC is not required to reimburse the Airport for any costs beyond the Budget Amount or for any services beyond the Services in the MOU, unless the Airport and SFPUC enter a written modification to the MOU documenting such changes; and
WHEREAS, The term o f the MOU is from December 4 , 2023, to December 31, 2028; now, therefore, be it
RESOLVED, That this Commission hereby authorizes the General Manage r of the SFPUC to execute the MOU with the Airport in an amount not -to-exceed $50,000,000, with a term of November 17, 2023 to December 31, 2028; and be it FURTHER RESOLVED, That this Commission hereby authorizes the General Manager to enter into any amendments or modifications to the Memorandum of Understanding with the Airport that the General Manager determines, in consultation with the City Attorney, are in the best interest of the City; do not materially increase the obligations or liabilities of the SF PUC or materially diminish the benefits to the SF PUC; are necessary or advisable to effectuate the purposes and intent of the Memorandum of Understanding or this resolution; and are in compliance with all applicable laws, including the City Charter.
I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting of November 28, 2023.
Secretary, Public Utilities Commission
1 MEMORANDUM OF UNDERSTANDING
BETWEEN THE SAN FRANCISCO AIRPORT COMMISSION
AND
THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Airport Substation Transformer Bank Upgrade Project
(Airport Project No. 11887)
This interdepartmental memorandum of understanding (“MOU”) is entered into as of November 17, 2023, by and between the San Francisco Airport Commission (the “Airport” or “SFO”) and the San Francisco Public Utilities Commission (“SFPUC”), each of which is a department or agency of the City and County of San Francisco (“City”), concerning the services listed below to be provided by the Airport to the SFPUC in connection with the Airport Substation Transformer Bank Upgrade Project (the “Project”).
RECITALS
A. The SFPUC provides electric power to the Airport as a customer.
B. The Airport Substation (“Airport Substation”) is located on the City’s West of Bayshore property and exclusively serves the Airport. The Airport Substation is a shared facility between Pacific Gas and Electric (“PG&E”) and the City. The Airport Substation interconnects with the PG&E 115kV high voltage (“HV”) lines through PG&E and SFPUC equipment, and power is stepped down through SFPUC transformers and feeds the Airport-operated 12kV medium voltage (“MV”) equipment.
C. The Project will replace the two existing Airport Substation transformers with three new 55MVA transformers (one will serve as a backup), the existing switchgear equipment, and other supporting electrical systems. Some of the equipment that will be replaced is operated by SFPUC. Replacing the existing transformers at the Airport Substation, each rated at 33/55 MVA, will provide the Airport with reliable power capacity to support current and future Airport energy demands and Airport operations. All Project construction will occur within the existing Airport Substation footprint.
D. The Project is in the initial stages of design and the Airport and SFPUC desire to establish roles and responsibilities for implementing the Project at this preliminary phase.
E. SFPUC and the Airport agree that the Airport will procure and provide the equipment and services for the Project and the SFPUC will fund the equipment and services for the Project, all as outlined in this MOU.
F. To facilitate the Project, SFPUC will delegate to the Airport the SFPUC’s jurisdiction over the procurement, design, and construction of power facilities and 2 equipment to the extent necessary to construct the Project. The Airport will provide its staff and resources and procure the project management support services consultant and the design-build contractor necessary to construct the Project.
Now, therefore, the Airport and SF PUC agree as follows:
1. SERVICES TO BE PROVIDED.
A. Airport. The Airport shall provide the following services in connection with the Project (collectively, the “Services”):
1. Procure and manage Project Management Support Services (“PMSS”) for the Project. The Airport will procure and award a contract for PMSS for the Project and manage the PMSS consultant, with input from SFPUC. The PMSS consultant will provide overall management expertise and oversight of the Project. The PMSS consultant’s scope of work will include design stakeholder engagement, construction management services, project controls, contract administration, cost estimating services, and field inspection.
2. Procure and manage design-build services for the Project. a. The Airport will procure and award a contract for design-build services for the Project and manage the design-build contractor, with input from SFPUC.
b. The Project will be constructed using a design-build project delivery method, which provides a means for the earliest practical engagement of qualified and experienced design professionals, contractors, and subcontractors to achieve well-designed, coordinated, and constructed projects with reduced or eliminated field and/or implementation errors and conflicts.
c. The selected design-build contractor will procure the equipment and will undertake the design and construction work required to construct the Project. The design-build contract will include a collaborative design process for the programming, design, procurement of transformer equipment, and construction for the Project, including coordination and sequencing with PG&E on planned shutdown and activation with Airport and SFPUC staff. The Services will also include final commissioning and closeout.
B. SFPUC. SFPUC agrees to the following to facilitate construction of the Project:
1. SFPUC delegates to Airport SFPUC’s exclusive authority over the procurement, design, and construction of power facilities and equipment but solely to the extent necessary for the Airport to provide the Services and to construct the Project as described in this MOU. Notwithstanding this delegation, SFPUC will retain concurrent authority over the Project. This delegation will terminate with termination or expiration of this MOU, as described in Section 6 of this MOU. 3 2. SFPUC shall provide all funding for the Services, including the PMSS and design-build contracts referenced in Section 1.A. of this MOU, and the Airport’s costs for management of the Services. This funding will support the Airport’s ability to procure and provide the Services for the Project.
C. Selection Process for PMSS Consultant and Design-Build Contractor. Upon execution of this MOU, Airport and SFPUC shall mutually agree upon a process for SFPUC participation in the selection of the PMSS consultant and the design-build contractor and the performance of the Services throughout the term of this MOU. SFPUC participation will include determination of minimum qualification for proposers and proposer review and selection.
2. BUDGETED MOU AMOUNT. SFPUC’s total financial responsibility under this MOU will not exceed $50,000,000 (“Budgeted MOU Amount”), including payments for the Services, the Airport’s costs for management of the Services required to implement the Project, and costs incurred through the PMSS and design-build contracts described in Section
1.A. of this MOU.
A. SFPUC is not required to reimburse the Airport for any costs above the Budgeted MOU Amount or for any work beyond the Services listed in Section 1 of this MOU, unless the Airport and SFPUC enter a written modification to this MOU documenting such additional costs and services.
B. As part of the Budgeted MOU Amount, SFPUC will pay the Airport’s actual costs of salary and mandatory fringe benefits for Airport personnel engaged in the management of the (1) procurement and management of the PMSS consultant, and (2) procurement and management of the design-build contractor.
C. If the Project’s costs exceed the Budgeted MOU Amount, or the parties anticipate the Project’s costs will exceed the Budgeted MOU Amount, the parties agree to consult with each other regarding potential modifications to the Project’s scope to lower the Project’s total costs to fall within the Budgeted MOU Amount. The parties may also agree to increase the Budgeted MOU Amount as they deem appropriate. Any modification of the Budgeted MOU Amount will require a written modification of this MOU.
3. BILLING PROCEDURES.
A. The Airport will charge SFPUC for the Services in accordance with this MOU through a direct charge process. These charges shall include the documented costs of Airport personnel as set forth in Section 2.B. of this MOU and the costs incurred pursuant to the PMSS and design-build contracts described in Section 1.A of this MOU.
B. On a monthly basis, the Airport shall submit copies of PMSS consultant’s and design- build contractor’s invoices and/or receipts as documentation of costs to be paid by SFPUC and invoices documenting the time spent by Airport personnel and the all-in hourly rate for salary and fringe benefits. Copies of the invoices or receipts will clearly indicate that the services or materials were provided or purchased for SFPUC or the Project. If the original invoice does not identify SFPUC or the Project as the recipient of the goods or services, the Airport will annotate the invoice to indicate that the goods 4 purchased or services rendered were for a particular SFPUC-related task for the Project under this MOU.
C. SFPUC agrees that Airport may facilitate payment of invoices for Services upon receipt using SFPUC funds, subject to SFPUC approval, which shall be given no later than 15 days after presentation of each invoice by Airport.
D. The Airport will provide to SFPUC final documentation of the actual costs of the Services invoiced before the end of the final quarter of each fiscal year, and the total payments due for each fiscal year shall be adjusted accordingly.
4. BILLING DISPUTES. If the Airport and SFPUC are unable to reach an agreement regarding a dispute over an invoice submitted by the Airport under this MOU, the Airport’s Assistant Chief Financial Officer will represent the Airport in this dispute and seek to resolve the dispute with SFPUC personnel familiar with the Project. If the parties still cannot reach an agreement through that process, the Airport’s Assistant Chief Financial Officer will meet with the SFPUC’s Chief Financial Officer to resolve the matter.
5. CEQA COMPLIANCE. The Parties agree that this MOU constitutes an Approval Action for the Project within the meaning of San Francisco Administrative Code Chapter 31.
Notwithstanding, on June 26, 2023, the San Francisco Planning Department, Environmental Planning Division, determined that the Project is Categorically Exempt from review under the California Environmental Quality Act (CEQA) (Public Resources Code Section 21000, et seq.) as a Class 1 exemption for existing facilities (CEQA Guidelines, § 15301), Class 2 exemption for replacement or reconstruction (CEQA Guidelines, § 15302), and Class 3 exemption for certain new construction (CEQA Guidelines, § 15303). The exemption determination is available on the Planning Department’s website (Planning Department File No. 2023-004665ENV). This CEQA exempt determination will be relied in connection with any future decision on the Project by the Airport or the SPFUC that constitutes an Approval Action for the Project for purposes of CEQA, pursuant to Section 31.04(h) of the San Francisco Administrative Code.
6. TERM AND TERMINATION.
A. The term of this MOU is from December 4, 2023 through December 31, 2028, unless earlier terminated by a written modification of this MOU.
B. The parties may agree to extend the term of this MOU as they deem appropriate. Any modification of the term of this MOU will require a written modification of this MOU.
5 This MOU has been entered into in duplicate as of the date first above written.
___________________________ _______________________
Ivar C. Satero Date Airport Director
San Francisco Airport Commission
___________________________ _______________________
Dennis J. Herrera Date General Manager
San Francisco Public Utilities Commission