February 20, 2024
Economic Development
DATE: February 20, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
Nannette Beacham, Director of Economic Development
Charles Gerard, Port Director
Subject:
Construction Agreement with Rosendin Electric, Inc. for the Installation of a Shore Power System at the Point
Potrero Marine Terminal
FINANCIAL IMPACT: A portion of the proposed expenditure was approved in the Fiscal Year 2023-24 Port Budget ($1,700,000
Account String: 40163080-400708-36007). The Port
expects additional funding in FY 2024-25 for the balance of the project.
PREVIOUS COUNCIL
ACTION:
None
STATEMENT OF THE
ISSUE:
The Port seeks approval of a construction agreement
with Rosendin Electric, Inc. to install a shore power
system at the Point Potrero Marine Terminal. The Port
would only expend a value equal to its established
budget.
RECOMMENDED ACTION:
APPROVE a construction agreement with Rosendin
Electric, Inc. in the amount of $3,320,747, for the
installation of a shore power system at the Point Potrero Marine Terminal, for a term beginning February 21, 2024, and ending June 30, 2026 – Port of Richmond (Charles
Gerard 510- 620-6792).
DISCUSSION:
The California Air Resources Board (CARB) adopted At Berth Regulations in 2020, which appear in Sections 93130 through 93131.22 of Title 17, of the California Code of Regulations. The purpose of these regulations is to reduce emissions from ocean-going AGENDA
REPORT
February 20, 2024
vessels at berths in California’s ports providing air quality benefits to people living and working in and around seaports. Any port with a regulated terminal is subject to these regulations, which includes the Port of Richmond’s Point Potrero Marine Terminal (PPMT).
While the regulations took effect on January 1, 2021, the emissions controls require compliance by January 1, 2025, for roll-on/roll-off (RORO) vessels, which are the type that call PPMT. This regulation requires that all ships at berth connect to shore-based electrical equipment to power a vessel’s systems rather than operate onboard fossil fuel powered electrical generators. The IEC/IEEE CDV 80005-1 describes the high-voltage shore connection (HVSC) systems that are both onboard the ship and on shore, which supplies loads up to 6.5 million volt-amperes (MVA) at 11 thousand volts (kV).
In early 2023, the Port issued an invitation for bid through the City’s Bids Online System to install a shore power system at the PPMT. Twenty-six vendors downloaded the bid information, and three vendors attended the pre-bid meeting. However, the Port did not receive any proposals by the April 2023 due date. The Port completed outreach within the contracting community to advertise the opportunity and re-released the invitation for bid. This second time, 21 vendors obtained the bid information, but by the due date in late May, the Port received no bids.
Port staff contacted several contractors who have previous experience working in Richmond as well as those that have installed a shore power system. Contractors noted that they did not bid due to the difficulty in procuring the electrical infrastructure necessary to support the specific shore power equipment for RORO vessels, lack of internal resources, and difficulty in meeting the construction schedule as stipulated by the Port.
Per the City of Richmond’s Municipal Code Section 2.52.31, “If no bids are received, procurement may proceed without further compliance with competitive bidding requirements.” Thus, the Port contacted an electrical contractor who has previously worked on repairing high-voltage systems at PPMT, Rosendin Electric, Inc. (Rosendin).
Rosendin is currently working at the Port of Oakland on shore power systems and offered helpful insight into developing a system for Richmond.
Rosendin expressed concerns in developing a final construction budget as there were unknowns in the HVSC system design and difficultly in procuring specialized materials.
Thus, the Port proposed a three-step process to develop the project that could protect the interests of both parties. These steps include the following:
1. Finalize the design of the shore power system as well as coordinate with vendors that can supply the unique equipment.
2. Install the landside equipment that includes connections to the Pacific Gas and Electric system, transformer, switch gear, and shore power connection.
3. Procure a vehicle that can handle the equipment that connects the shore power system to the ship.
February 20, 2024
Based upon the above steps, Rosendin provided an estimate to complete the project of $3,320,747. The estimated cost for each phase is summarized below:
1. Final Engineering $120,000
2. Shore Power Construction $2,149,197
3. Cable Management Equipment $1,051,550
After completion of the final engineering, the Port would coordinate with Rosendin to finalize the costs associated with the Shore Power Construction and the Cable Management Equipment. The Port believes the costs for phases 2 and 3 are estimated at the high end and should not increase unless there is a change in equipment specification.
In addition to completing this work, the Port will need to coordinate with Pacific Gas and Electric (PG&E) to increase the capacity of the electrical system at the PPMT. A previous investigation completed by PG&E in 2021 to serve a similar demand at PPMT ranged between $1.8 and $5.2 million. For budgeting purposes, the Port assumes the cost to be $3.5 million. The following summarizes the costs associated with providing a shore power system at PPMT.
Item Budget Performed by
Final Engineering $120,000 Rosendin
Permits $10,000 Richmond
Shore Power Construction $2,149,197 Rosendin
Cable Management Equipment $1,051,550 Rosendin
Electrical transmission upgrade $3,500,000 Pacific Gas and Electric Contingency $269,253
Total $7,100,000
To support funding of the improvements, in late July 2022, the Port received $1,003,250 in funding from the Bay Area Air Quality Management District (BAAQMD) from the Volkswagen Mitigation Trust Fund Zero Emission Freight and Marine Program Grant Agreement. Due to the challenges in securing a vendor, the Port could not commence work and the grant expired in late December 2023. The Port is currently working with BAAQMD to extend the funding as well as secure an additional allowance to support the existing approximate $6 million deficit.
To comply with CARB’s requirements, the Port seeks to award a construction agreement with Rosendin for a total not-to-exceed value of $3,320,747. However, until the Port obtains other funding, it seeks to only commence with the design phase and begin procuring materials consistent with the $696,750 allowance as outlined in its Fiscal Year 2023-24 budget. If the Port acquires additional funds, the remaining value of the contract would be awarded to Rosendin.
February 20, 2024
With additional funding, the Port believes that much of the shore power infrastructure can be installed by December 2024. However, the PG&E work will likely require an additional year to complete. Thus, the Port expects to have a shore power system ready at PPMT by early 2026.
ENVIRONMENTAL REVIEW:
As this is a Class 1 existing facility, the project is exempt from the California Environmental Quality Act.
DOCUMENTS ATTACHED:
Attachment 1 – Exhibit-A-1 Design Only Proposal
Attachment 2 – Construction Agreement