City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: March 16, 2026
Report #:2511-5438
TITLE
Approval of Amendment No. 1 to Contract S23184208 with Flynn Resources Inc., in the Amount of $170,000 for a revised Total Not-to-Exceed Amount of $425,000 and Extending Term Two Years to Provide As-Needed Electric Engineering Consulting Services Related to Electric Transmission Line Expansion, Interconnection, Engineering Analysis and Regulatory Issues; CEQA Status: the Grid Modernization Project is Exempt Under CEQA Guidelines Sections 15302, 15303 and 15183
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or their designee to execute Amendment No. 1 to Contract No. S23184208 (Attachment A) with Flynn Resources Inc., for as-needed electric engineering consulting in an amount not-to-exceed $170,000 and for two (2) additional years for regulatory support related to an additional 115 KV transmission path extending between PG&E’s AMES/NASA substation and the City’s Colorado electric power substation. The amendment results in a revised total contract not-to-exceed amount of $425,000.
BACKGROUND
The City entered into an agreement with Flynn Resources Inc. on March 28, 2023, for a period of three (3) years with a not-to-exceed amount of $255,000 or $85,000 annually for professional consulting services related to transmission planning, design and construction. The 3-year contract term with Flynn Resources Inc. ends on March 31, 2026.
Flynn Resources Inc. possesses extensive experience in Electric Transmission, Interconnection, Power Generation, Regulatory and Electric Market Design Issues. Flynn Resources has demonstrated technical expertise and successfully completed electric utility transmission planning and regulatory compliance projects with other major US electric utilities. These projects include a recommendation for alternative additions and upgrades to the City’s current transmission interconnection to the grid for increased capacity and reliability of the 115kV
system serving Palo Alto. Flynn has also provided recommendations for an alternative 115kV interconnection outside the City’s common corridor.
Over the past three years, Flynn Resources Inc. has performed engineering and financial analysis to identify long-term reliability and capacity needed to serve the City’s electric loads.
Flynn Resources Inc. serves as the City’s professional liaison and consultant for coordinating site and design logistics with PG&E. Flynn Resources Inc. has demonstrated expertise in providing professional advice into regulatory compliance, interconnection studies, grid impact assessments, cost estimates, and financial analysis. They have also assisted the City in preparing and submitting necessary applications and documentation to the key regulatory bodies (e.g., CAISO, CPUC, FERC) for project approval.
Council’s approval to increase the not-to-exceed amount and extend the agreement’s term will allow staff to continue to utilize Flynn for active transmission design and analysis projects on a need-only basis and it does not guarantee any specific amount of work to the Consultant. This amendment is essential to ensure continuity of service and retain a consultant with highly specialized knowledge of the California Independent System Operator’s (CAISO) transmission planning process and complex regulatory compliance. When City 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.
ANALYSIS
Flynn Resources Inc. is a Transmission Planning Consultant highly experienced in electric grid reliability, engineering design, and renewable resources integration. They will address technical challenges, perform advanced transmission system studies and economic analyses, and evaluate regulatory conditions and risks by applying CPUC, NERC, FERC, and regional requirements.
The Utilities Electric Engineering Division has been working with Flynn Resources Inc., on an additional transmission line path to improve overall system reliability for Palo Alto electric customers. Work involved in the extension of transmission line planning process requires special regulatory knowledge, technical expertise, and modeling skills. Flynn Resources Inc. will provide ongoing strategic and technical advice to the City throughout the agreement term and monitor industry trends, regulatory changes and their potential impact on Palo Alto’s transmission source. Electric Engineering Division relies on technical engineering consultants such as Flynn Resources Inc. in specialized areas where Engineering has limited in-house expertise.
FISCAL/RESOURCE IMPACT
Funding for contract amendment number 1 is available in the FY 2026 Electric CIP budget under EL-24000 (Grid Modernization), EL-19001 (Colorado Power Station Equipment Upgrades), Subsequent years are subject to City Council’s approval of the annual budget process and appropriation of funds.
POLICY IMPLICATIONS
The recommended contract extension is consistent with the City’s Utilities Strategic Plan objectives, specifically Priority 4: Financial Efficiency and Resource Optimization and the core mission of providing safe, reliable, and compliant electric service to the City’s customers.
Leveraging this existing, proven contractor relationship with documented regulatory expertise is the most effective use of resources to maintain critical infrastructure and mandatory compliance.
The approval of this Enterprise Fund professional services contract is consistent with existing City policies. This recommendation is consistent with the Council-approved Utilities 2018 Strategic Plan ( Staff Report 9022 [1]), especially the strategic objectives to: “Establish a proactive infrastructure replacement program, based on planned replacement before failure to support reliability and resiliency.”
STAKEHOLDER ENGAGEMENT
Flynn Resources Inc. will act as a technical advisor and facilitator in negotiations with key stakeholders, including:
California Independent System Operator (CAISO): For project approval, grid integration, and transmission planning process adherence.
Pacific Gas & Electric (PG&E): For interconnection agreements and coordination with their existing infrastructure.
NASA/AMES Research Center and Department of Energy (DOE): For potential access to their transmission and substation facilities, technical integration, and development of cost-sharing alternatives.
ENVIRONMENTAL REVIEW
Council action on this item is exempt from CEQA because all work conducted under this contract supports the Grid Modernization for Electrification project, which is categorically exempt from California Environmental Quality Act (CEQA) review under CEQA Guidelines section 15302 (replacement or reconstruction of existing structures and facilities), section 15303 (construction and location of limited numbers of new, small facilities or structures; installation of small new equipment and facilities in small structures), and 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: Flynn Resources Inc.; Contract C23184208 Amendment No. 1 APPROVED BY:
Alan Kurotori, Director of Utilities
Staff: Terry Crowley, Utilities Chief Operating Officer