City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: June 1, 2026
Report #:2605-6354
TITLE
Approval of Professional Services Contracts with Concourse Tech Inc., Contract No. C26195689, and Prospect Silicon Valley, Contract No. C26195690, to Support Commercial Efficiency and Electrification Programs for a Term of Three (3) Years for a Total Combined Not to Exceed Amount of $898,500; CEQA Status – Not a Project.
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or their designee to:
1. Execute Contract No. C26195689 with Concourse Tech Inc. for a not-to-exceed amount of $148,500 over a three-year contract term ending June 4, 2029______ to develop a Commercial Customer Characterization Tool and engagement platform for large commercial and industrial customers as well as small and medium businesses;
2. Extend Contract No C26195689 with Concourse Tech Inc. for up to two (2) additional 12- month periods with an annual not-to-exceed of $15,000 over the contract extension period, subject to mutual agreement and available budget appropriations, for a total contract amount not to exceed $178,500 over a five-year term ending June 4, 2031_______;
3. Execute Contract No. C26195690 with Prospect Silicon Valley (Prospect SV) for a not-to- exceed amount of $750,000 over a three-year contract term ending May 3, 2029_______ to provide Technical Assistance and Equipment Option Analysis to support electrification in commercial buildings; and
4. Extend Contract No C26195690 with Prospect SV Inc. for up to two (2) additional 12- month periods with no additional cost to the City, subject to mutual agreement for a total contract amount not to exceed $750,000 over a five-year term ending May 3, 2031______.
EXECUTIVE SUMMARY
The City of Palo Alto Utilities (“CITY” or “CPAU”) administers a suite of commercial efficiency and electrification programs that support the City’s Sustainability and Climate Action Plan (S/CAP) goals. These programs help businesses reduce greenhouse gas emissions, improve energy and water efficiency, and transition from natural gas to efficient electric technologies.
To advance these efforts, staff is seeking approval of two contracts that will support program delivery through customer targeting and technical assistance. The proposed contract with Concourse Tech will provide a tool to help identify, prioritize, and engage commercial customers with the greatest potential for energy and electrification upgrades. The proposed contract with Prospect Silicon Valley will provide technical assistance and project analysis to help customers evaluate equipment and move electrification projects toward implementation.
Together, these services will improve CPAU’s ability to reach the right customers and advance commercial efficiency and electrification projects that reduce utility costs, modernize building systems, and support decarbonization across Palo Alto’s commercial sector.
BACKGROUND
In support of broader climate objectives, the City established an ambitious emissions reduction target in 2016, aiming to reduce greenhouse gas emissions to 80% below 1990 levels by 2030 (“80 x 30”). Building on this commitment, a carbon neutrality goal was adopted in 2022, outlining a path to achieve net zero emissions. Electrifying commercial buildings is a key part of achieving these targets. This includes replacing gas-powered space heating and water heating systems, cooking equipment, and other small gas appliances with electric alternatives.
Together, these uses account for about 30 percent of the City’s emissions, and electrification, alongside continued energy efficiency efforts, offers a meaningful opportunity to reduce greenhouse gas emissions and modernize buildings in the commercial sector. Past program experience has demonstrated that coordinated service delivery, combining customer characterization, equipment analysis, electrification technical assistance, and efficiency recommendations, results in the most cost-effective and impactful energy savings.
In August 2025, CPAU issued three related RFPs for professional services to enhance the City’s commercial efficiency and electrification program offerings:
RFP194784: Category 1 Professional Services for Commercial Efficiency and Electrification Program
RFP195689: Category 2 Develop a Customer Characterization Tool for customer identification, outreach, engagement, and project management RFP195690: Category 3 Technical Assistance and Analysis of Equipment Options to support electrification in commercial buildings
City selected Concourse Tech Inc. for the Category 2 service and Prospect SV for the Category 3 service. Staff will return to City Council later in the summer for the approval of contract with the vendor selected for the Category 1 service to provide commercial efficiency and electrification program services. Together, these three contracts will help commercial customers reduce utility bills, modernize infrastructure, and achieve measurable greenhouse gas reductions.
ANALYSIS
CPAU’s commercial customer programs are designed to address technical, financial, and information barriers that often prevent commercial customers from pursuing comprehensive energy upgrades. These integrated approaches also support customers in modernizing aging infrastructure, reducing utility costs, and implementing projects that deliver measurable emissions reductions.
In order to reach the City’s S/CAP goals and electrify commercial properties, we must first understand what type of equipment is found in facilities in Palo Alto and provide technical assistance to guide businesses through their electrification journey. The Category 2 contract with Concourse Tech Inc. will enable the development of a Commercial Customer Characterization Tool to better understand energy use patterns and identify high-impact opportunities across large commercial and industrial customers, as well as small and medium- sized businesses. The tool will integrate multiple data sources, including past utility consumption data, commercial real estate records, building footprint data, satellite imagery for identifying rooftop equipment, and publicly available ownership records. Using these datasets, the tool will analyze metrics such as energy use intensity, load characteristics and equipment age to prioritize buildings that are most likely to benefit from program services. This data- driven approach will allow staff to focus outreach on customers and facilities with the greatest potential for deep decarbonization and energy performance improvements.
The Category 3 contract with Prospect SV will provide technical assistance and equipment option analysis to support electrification of space heating and cooling, water heating and commercial cooking equipment in commercial buildings. These services will help customers evaluate replacement options, assess project feasibility, including assessing existing panel capacity and space requirements of proposed electric equipment option(s), estimate cost ranges of implementing feasible efficiency measures, and make informed decisions that align with both operational needs and climate goals.
Solicitation Process
The City issued separate Requests for Proposals (RFPs) on August 14, 2025, for Category 2 and Category 3 services. Through a competitive RFP process, staff selected Concourse Tech Inc. as the vendor that best meets the City’s needs for Category 2. Through a similar RFP process, staff selected Prospect SV as the vendor that best meets the City’s needs for Category 3.
Concourse Tech Inc. offers configurable cloud-based software solutions, specifically designed for the public sector, that can support CPAU’s needs to characterize its commercial utility customers and their energy use. Their platform provides flexibility to customize workflows, data collection, and reporting, enabling CPAU to characterize and identify commercial customers that would benefit from commercial electrification technical assistance and rebate offerings.
Concourse’s demonstrated experience, technical capabilities, and adaptable software tools position them to successfully deliver the final products and services required for Category 2.
Prospect SV maintains local staff with extensive experience in building electrification, equipment option analyses, permitting support, and project management for commercial and multifamily electrification projects throughout the Bay Area. As part of its proposal, Prospect SV has partnered with engineering firms and consultants with expertise in complex mechanical, electrical and plumbing system designs, building energy modeling, electric load calculations, and load management strategies. Its local presence and electrification expertise position Prospect SV well to meet the electrification needs of CPAU’s commercial customers.
Table 1: Summary of details related to RFP #195689 and RFP # 195690 Category 2 Request for Proposal # 195689
RFP Name/Number Professional Services for Commercial
Customer Characterization Tool
RFP No. 195689
Proposals Due September 19, 2025
# of firms notified 25
Total days to respond to RFP 31 days
# of proposals received 4
Non-responsive bidders/Responsive bidders 0/4
Public link to solicitation https://procurement.opengov.com/portal/palo- alto-ca/projects/191814
Proposers price range for rendered services $115,996 - $126,000 Category 3 Request for Proposal # 195690
RFP Name/Number Professional Services for Commercial
Electrification Technical Assistance
RFP No. 195690
Proposals Due September 19, 2025
# of firms notified 25
Total days to respond to RFP 31 days
# of proposals received 8
Non-responsive bidders/Responsive bidders 1/8
Public link to solicitation https://procurement.opengov.com/portal/palo- alto-ca/projects/191820
Proposers price range for rendered services $733,603 - $816,845 The RFP responses were evaluated based on several key criteria, including the quality and completeness of proposals, the specifics of the proposed solutions, the contractors’ experience with utility program services, the proposed program costs, and their prior record of performance with government agencies. For Category 2, the evaluation emphasized experience delivering configurable software solutions and professional services to support utility program administration. For Category 3, the evaluation emphasized experience providing technical assistance for commercial building electrification projects, including reviewing and validating equipment designs and specifications, performing savings calculations and cost evaluations, conducting electrical load analysis, offering design recommendations, and supporting project permitting processes.
The contract with Concourse Tech Inc. includes a one-time implementation cost of $105,000, which covers requirements gathering, system design and development, testing, and deployment. Annual maintenance and support will cost $15,000 per year for two years (Years 2 and 3 of the contract), adding $30,000. Staff has added an Additional Services budget of $13,500 for the purchase of external data sources to the contract, resulting in a total not-to- exceed three-year budget of $148,500 for the contract with Concourse Tech Inc. The two-year extension option will add an annual not-to-exceed amount of $15,000 to cover the annual maintenance and support. Staff will consider exercising the contract extension option if the tool developed by Concourse Tech Inc. performs reliably, meets expectations for effective customer targeting, and there continues to be a demonstrated need for staff use of the tool, with no comparable alternative tool available at that time.
The contract with Prospect SV has an annual budget of $227,500 to cover costs related to providing technical support for customer electrification projects on a time-and-materials basis, with an additional services budget of $67,500. The Prospect SV contract establishes per-project technical assistance budget caps by customer type, with a maximum of $20,000 per project for Small and Medium Business customers and $40,000 per project for Key Account customers. The total not-to-exceed three-year budget for the Prospect contract is $750,000, and the two-year extension option would not add to the total costs. Staff will consider exercising the contract extension option if Prospect SV demonstrates satisfactory performance in providing technical assistance in complex commercial electrification projects, and there continues to be a demonstrated need to offer this service to customers. If the contract budget is fully expended within the first three years, staff will issue a new Request for Proposal (RFP) for similar services.
With the optional two-year extensions, the total budget will be $178,500 over five years with Concourse Tech Inc. and $750,000 over five years with Prospect SV.
Both contracts use the City’s professional services contract template, which permits the City to terminate without cause/for convenience by providing written notice to the contractor. In the event the City finds itself facing a challenging budget situation, and it is determined that City resources need to be refocused elsewhere, the City can terminate for convenience. Other options include termination due to non-appropriation of funds or amending the contract to reduce the cost, for example, by reducing the scope of work or limiting issuance of Task Orders.
The contract may also be suspended by written notice of the City Manager.
FISCAL/RESOURCE IMPACT
Spending authority to cover the first year of both contracts, totaling $346,000, which includes $13,500 to purchase external data under the contract with Concourse Tech Inc, is included in the proposed FY 2027 Operating Budget of the Electric Fund. Funding for the Prospect SV contract will correspond to the customer project being evaluated, utilizing Gas Cap and Invest funds, as well as Electric Public Benefit Demand Side Management funds for projects that deliver energy efficiency savings and Electric Public Benefit Research Development & Demonstration (RD&D) funds for demonstration projects and projects involving emerging technologies. The Concourse Tech contract will be funded from Gas Cap and Invest funds as CPAU will use the platform to identify customers with the highest potential for electrification projects, which aligns with Council’s Cap and Invest policy to promote investment in energy efficiency programs for the natural gas portfolio and retail customers.
Funding for future years is contingent upon Council’s approval through the annual budget process.
The total budget impact for the two contracts, including the optional two-year extensions, will be $178,500 over five years with Concourse Tech Inc. and $750,000 over five years with Prospect SV.
Staff anticipate administering both contracts using existing staffing resources, with no additional personnel required.
STAKEHOLDER ENGAGEMENT
Over the past several years, staff has gathered feedback from commercial customers through existing program participation surveys and citywide surveys. Commercial customers have consistently expressed a strong need for help navigating energy efficiency and electrification opportunities. Through conversations, program participation, and general commercial customer engagement, two primary barriers continue to emerge: cost and time. Many commercial customers are interested in pursuing upgrades but do not have the time and/or resources required to explore electrification options without a clearer understanding of the potential benefits.
Staff has also engaged with other public utilities and CCAs to learn from their experiences designing and implementing commercial programs. For example, SMUD has had notable success with their electrification programs, which they attribute to a combination of strong technical support for customers, higher incentive levels, contractor training to build market readiness, and consistent engagement with their commercial customer base. These approaches have helped increase program participation. In addition, discussions with other utilities and CCAs provided useful examples of how rebate programs can be structured to better address commercial customer needs and improve uptake. These conversations have provided valuable perspective on best practices, program challenges, and lessons learned, helping to inform staff’s approach to program design and development. Staff plans to engage the contractor community by offering webinars on the City‘s permitting processes to improve transparency around permitting requirements and help reduce project delays. In parallel, staff is collaborating with the City‘s Planning and Development Services department to streamline permitting processes where feasible, further supporting efficient project implementation.
ENVIRONMENTAL REVIEW
Council’s approval of the attached agreements described in this staff report does not meet the definition of a project under California Environmental Quality Act (CEQA) review, as administrative government activities will not result in any direct or indirect physical change to the environment (CEQA Guidelines section 15378(b)(5)).
POLICY IMPACTS
The proposed contracts support the Council-approved Sustainability Plan, and Comprehensive Plan Goal N7.7.2 (explore the transition of existing buildings from gas to electric or solar water and space heating). Specifically, the contracts support the 2026-2027 Sustainability and Climate Action Plan Work Plan items “Launch Advanced Heat Pump HVAC Program” (CA-8) and “Launch Pilot Program for Electrification of Centralized Water Heaters and Boilers” (CA-11).
ATTACHMENTS
Attachment A: Contract C26195689 with Concourse Tech, Inc.
Attachment B: Contract C26195690 with Prospect Silicon Valley APPROVED BY:
Alan Kurotori, Director of Utilities
Staff: Christine Tam, Manager Utility Program Services