TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Zachary Struyk
SUBJECT: SEE BELOW DATE: January 13, 2025
Approved
Date:
1/15/25
COUNCIL DISTRICT: Citywide
SUBJECT: Fifth Amendment to the Professional Services Agreement for Data Management and Customer Call Center Services with Calpine Energy Solutions
RECOMMENDATION
Approve a Fifth Amendment to the Professional Services Agreement for Data Management and Customer Call Center Services with Calpine Energy Solutions, LLC, extending the term of the agreement by 90 days, through May 29, 2025, and increasing the maximum compensation by $1,200,000, from $22,000,000 to $23,200,000, subject to the appropriation of funds.
SUMMARY AND OUTCOME
Services under the Professional Services Agreement for Data Management and Customer Call Center Services include support of customer billing and data management functions, data exchange with PG&E, customer call center support, payment and settlement processing. Approving the Fifth Amendment will allow the continuity of essential services to the Energy Department, while the negotiation and approval of a new services agreement is under way.
BACKGROUND
On August 8, 2017, staff released a Request for Proposals for San José Clean Energy (SJCE) Data Management and Customer Call Center Services to begin the procurement process. The Request for Proposals included the following scope of work:
data management and security, reporting functions, management of a customer COUNCIL AGENDA: 2/4/25
FILE: 25-082
ITEM: 2.7
HONORABLE MAYOR AND CITY COUNCIL
January 13, 2025
Subject: Fifth Amendment to the Professional Services Agreement for Data Management and Customer Call Center Services with Calpine Energy Solutions
information system and call center, billing administration, and coordination with Pacific Gas and Electric. Six firms responded to the Request for Proposals for SJCE Data Management and Customer Call Center Services, and Calpine Energy Solutions, LLC (Calpine) scored significantly higher than any other firm. On February 27, 2018, the City Council approved Calpine's Professional Services Agreement for Data Management and Customer Call Center Services (Agreement). The Agreement was for two (2) years, with a City option to extend for two (2) additional one-year terms.
On February 11, 2020, City Council approved the First Amendment to the Agreement with Calpine, reducing rates and modifying service terms and increasing the maximum compensation from $15,683,800 to $22,000,000 through February 27, 2025.
On August 2, 2024, the Second Amendment was executed to support the expansion of the SJ CARES program to include a wider range of customers. This program offers residential customers enrolled in California Alternate Rates for Electricity (known as CARE) or Family Electric Rate Assistance (known as FERA) an extra 10% off SJCE's charges for electric generation. On August 18, 2024 the Third Amendment was executed to support the launch of the electricity supply rate (known as E-ELECSJ), designed to encourage certain energy usage to occur during the day. On December 2024, the Fourth Amendment was executed to obtain billing and reporting support for SJCE’s On Bill Repayment program for customers to finance energy-saving household products, specifically heat pump water heater or heat pump HVAC system, through a payment plan on their electric energy bill. Only the First Amendment to the Professional Services Agreement for Data Management and Customer Call Center Services increased the maximum compensation.
ANALYSIS
Calpine began serving the Community Choice Aggregation market for data management services with Marin Clean Energy in 2011, and now serves most Community Choice Aggregations, including Silicon Valley Clean Energy, Peninsula Clean Energy, Central Coast Community, Clean Power SF, Clean Power Alliance, Redwood Coast, and Lancaster Community Energy. Peninsula Clean Energy, Silicon Valley Clean Energy, and Clean Power SF have all approved new agreements with Calpine following public procurement processes this year.
SJCE has had a generally positive experience with Calpine's services, benefiting from accurate and timely billing as well as dependable customer call center support. Since the inception of Calpine's billing services for SJCE, over three million invoices have been processed through PG&E, with only 247 requiring re-billing due to a calculation error. This reflects a strong accuracy rate exceeding 99.99%. Additionally, Calpine has
HONORABLE MAYOR AND CITY COUNCIL
January 13, 2025
Subject: Fifth Amendment to the Professional Services Agreement for Data Management and Customer Call Center Services with Calpine Energy Solutions
consistently met its service level agreement commitments for call answer times and abandonment rates, ensuring reliable customer support.
Approving the Fifth Amendment will allow SJCE to maintain current pricing while negotiating a new agreement for data management and customer call center services is underway, allowing staff the time needed to obtain City Council approval and execute a new agreement without the risk of customer service disruption.
EVALUATION AND FOLLOW-UP
No further follow-up with the City Council is anticipated at this time.
COST SUMMARY/IMPLICATIONS
Approving the Fifth Amendment will fix SJCE's data management and customer call center services monthly expense through May 29, 2025, at the same pricing structure outlined in the First Amendment. The estimated 2024-2025 costs for the agreement amendment will be provided from existing funds already budgeted in the Energy Department's Non-Personal/Equipment appropriation.
Table 1. Expected costs related to the Calpine agreement.
Fiscal Year
2024-2025
(8 months)
June 24-Feb 25
Fiscal Year
2024-2025
(11 months)
June 24-May 25
Fifth Amendment
Cost/month/meter* $0.85 $0.85
Monthly fee $25,000 $25,000
Expected Total Cost
(Monthly fee and meter)
$2,444,000 $3,360,500
*
Based on average active meter count of 330,000
HONORABLE MAYOR AND CITY COUNCIL
January 13, 2025
Subject: Fifth Amendment to the Professional Services Agreement for Data Management and Customer Call Center Services with Calpine Energy Solutions
BUDGET REFERENCE
The table below identifies the fund and appropriation to fund the Agreement amendment recommended as part of this memorandum.
Fund
#
Appn.
#
Appropriation
Name
Total
Appropriation
Amount for
Contract
2024-2025
Adopted
Operating Budget
Page
Last Budget
Action (Date,
Ord. No.)
501 0782 Non-Personal /
Equipment
$17,892,552 $1,200,000 1010 10/22/2024
Ord. No.
31130
COORDINATION
This memorandum has been coordinated with the City Attorney's Office and the City Manager's Budget Office.
PUBLIC OUTREACH
This memorandum will be posted on the City’s Council Agenda website for the February 4, 2025 City Council meeting.
COMMISSION RECOMMENDATION AND INPUT
No commission recommendation or input is associated with this action.
CEQA
Not a Project, File No. PP17-003, Agreements/Contracts (New or Amended) resulting in no physical changes to the environment.
HONORABLE MAYOR AND CITY COUNCIL
January 13, 2025
Subject: Fifth Amendment to the Professional Services Agreement for Data Management and Customer Call Center Services with Calpine Energy Solutions
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
/s/
Zachary Struyk
Acting Director, Energy Department
For questions, please contact Lina Williams, Deputy Director, Energy Department, at [email protected] or (408) 534-2933.