City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: November 17, 2025
Report #:2504-4536
TITLE
Approval of Contract No. C26196096 with Soudi Consultants, Inc. in an Amount Not-to-Exceed of $1,500,000 over a Period of Three Years to Provide As-Needed Electric Engineering Consulting Services for System Protection Related to Palo Alto’s Electric Sub-Transmission, Substations, and Distribution Systems, and Technical Training and Peer Review Services; CEQA Status: Exempt Under CEQA Guidelines Sections 15302, 15303, and 15183.
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or their designee to execute contract C26196096 (Attachment A) with Soudi Consultants, Inc. (Soudi), for as-needed and specialized electric engineering consulting of system protection related to Palo Alto’s electric sub-transmission, substations, and distribution systems, including technical trainings and peer review for utilities staff, in the amount of $1,500,000 over a period of three years.
BACKGROUND
On June 22, 2020, Council approved three professional service agreements for electric engineering consulting services on an as-needed basis for a five-year term and an aggregate not- to-exceed amount of $5,000,000 (Staff Report #112171). Soudi was one of the three consultants awarded the 2020 contract after a competitive bid. The electric engineering consulting solicitation sought technical expertise for individual assignments that arise for on-call utilities electric engineering consulting services. These services include substation engineering, distribution engineering, system protection, supervisory control and data acquisition (SCADA), fiber optics, and customer service application reviews.
The original five-year contract ended on May 17, 2025. Amendment No. 1 to the agreement extended the term with Soudi for six months through November 17, 2025 or until a replacement agreement was approved. Amendment No. 1 provided no change in compensation or total not- 1 Staff Report #11217 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/year-archive/2020/id-11217-mini-packet-062220.pdf?t=39457.19
to-exceed amount. In aggregate, the City spent approximately $2,450,000 of the original not-to- exceed amount of $5,000,000 over 5.5 years with the three consulting firms and the unspent amount was returned to Electric reserves. The City spent $1,700,000 on the Soudi contract over the past 5.5 years for sub-transmission, substation, and distribution system protection engineering design and consulting.
A sole source exemption from competitive solicitation was granted pursuant to PAMC
2.30.360(d) as Soudi is the only consultant with extensive experience in sub-transmission, substation, and distribution system protection of the nine substations in the City of Palo Alto. It would take significant time to onboard a new consultant to gain a similar level of knowledge of the City’s substations relay protection design and operations which would significantly delay the grid modernization project and other substation equipment upgrades over the next three years.
ANALYSIS
The Utilities Electric Engineering Division has been working with Soudi since 2014 on substation relay protection. Due to staffing challenges in hiring principal engineers with electric distribution experience, the Electric Engineering Division relies on technical engineering consultants such as Soudi in specialized areas where Engineering has limited in-house expertise.
Soudi possesses extensive experience in sub-transmission and substation system protection.
They have demonstrated their technical expertise in successfully completed substation and distribution projects for Palo Alto. These projects include the 60kV sub-transmission breaker study, 60kV relay coordination projects, generation interconnections, development of relay settings templates, developing protection settings on the 60kV system to meet industry best- practices, and 12kV distribution protection support. Soudi is also a primary electric protection consultant for PG&E and can serve as the City’s professional liaison and provide technical communication to integrated designs on joint projects.
Soudi is currently supporting multiple facets of the City’s grid modernization project including Relay installation and replacement of existing mechanical or microprocessor relays Breaker replacement design at 115kV/60kV and 60kV/12kV substations Replacement design of distribution and power transformer breakers Substation protection design at Colorado, East Meadow, and Adobe Creek Substation capacitor bank design
In addition to the active projects and areas of expertise listed above, the proposed scope of work will provide the City with access to employee training by Soudi Consultants to develop internal knowledge and skills regarding system protection settings. Additionally, as the City builds an internal knowledge and skill in system protection, the proposed agreement and scope of work will allow Soudi to provide peer review of protection settings and schemes completed by internal City staff. This will help the City to increase internal knowledge regarding system protection and relay protection settings and lessen the City’s dependance on consultants.
Over the past 11 years, Soudi has demonstrated higher than satisfactory performance and assisted the City’s Utilities Department in successfully completing various maintenance activities and Capital Improvement Projects. Soudi is also knowledgeable of the protective network of Palo Alto’s nine substations and is well positioned to provide technical support for unplanned replacements and emergencies.
The Council’s approval of the consulting agreement will enable staff to utilize the agreement for multiple projects - it does not guarantee any work will be carried out. When staff has a specific project or task that requires consulting services, City staff will solicit a proposal from the consultant and evaluate using objective criteria. A task order with scope, timeline, and budget will be established with the consultant and require internal reviews for approval that include the Project Manager and/or Assistant Director of the Electric Utility. Any task order over $100,000 also requires approval from the City Manager or their designee.
FISCAL/RESOURCE IMPACT
Funding for agreement is available in the FY 2026 Electric CIP budget under EL-24000 (Grid Modernization), EL-19001 (Colorado Power Station Equipment Upgrades), EL-17002 (Substation Breaker Replacement), and EL-89038 (Substation Protection Improvements). Subsequent years are subject to City Council’s approval of the annual budget process and appropriation of funds.
POLICY IMPLICATIONS
The approval of this Enterprise Fund’s professional services contract is consistent with existing City policies. This recommendation is consistent with the Council-approved Utilities 2018 Strategic Plan ( Staff Report 9022 3), especially the strategic objectives to: “Establish a proactive infrastructure replacement program, based on planned replacement before failure to support reliability and resiliency.”
STAKEHOLDER ENGAGEMENT
This agreement with Soudi Consultants does not impact customers that would require community outreach.
ENVIRONMENTAL REVIEW
The services covered by this agreement are categorically exempt from California Environmental Quality Act (CEQA) review under CEQA Guidelines section 15302 (replacement or reconstruction of existing structures and facilities) and section 15303 (construction and location of limited 3 Staff Report 9022 https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/reports/city- manager-reports-cmrs/year-archive/2018/final-staff-report-id-9022_2018-utilities-strategic-plan.pdf numbers of new, small facilities or structures; installation of small new equipment and facilities in small structures); work related to the Grid Modernization for Electrification Project is also exempt under CEQA guidelines section 15183 (projects consistent with a general plan, community plan, or zoning) since it is consistent with the Environmental Impact Report (EIR) Addendum to the City of Palo Alto Comprehensive Plan Final Environmental Impact Report Council approved on June 5, 2023.
ATTACHMENTS
Attachment A: Contract Number C26196096 With Soudi Consultants, Inc.
APPROVED BY:
Alan Kurotori, Director of Utilities
Staff: Gopal Jagannath, Utilities Management Specialist