City Council Agenda Report
Meeting Date: December 5, 2023
From: Todd Dusenberry, General Manager of Public Utilities Department: Public Utilities
Submitted by: Adriana Ramos, Administrative Analyst
Subject
Services Agreement with Montrose Air Quality Services, LLC Recommendation
A. Find that approval of the proposed action is exempt from California Environmental Quality Act (CEQA) review, because it is a testing activity that will not result in direct or indirect physical changes in the environment, and therefore does not constitute a “project” as defined by CEQA Guidelines Section 15378; and
B. Approve and authorize the City Administrator to execute a Services Agreement with Montrose Air Quality Services, LLC (Montrose), in substantially the same form as submitted, to provide source testing for natural gas generation facilities in an amount not-to-exceed $238,238, for a three-year term.
Background
Vernon Public Utilities (VPU) provides dependable, high-quality electric, water, natural gas, and fiber optic services to the City's business and residential community at competitive and stable rates.
There are two generation facilities located in the City, each feeding into the electric transmission and distribution system, with a total output of 150 megawatts (MW) of generation. The Malburg Generating Station (MGS) is a natural gas-fired, combined cycle facility consisting of two natural gas-fired combustion turbine generators and two Heat Recovery Steam Generators with a capacity of 139 MW. It operates under a permit to operate (PTO) issued by the South Coast Air Quality Management District (SCAQMD) for Facility ID 195802. Station A is a historic building built in the early 1930s that houses two 5.5 MW simple cycle natural gas turbines (Gonzales Units) used for reserve purposes. Station A also possesses an SCAQMD-issued permit to operate, identified as Facility ID 14502. Both, MGS and Station A, require regular source testing to ensure compliance with the emissions limits specified within the PTOs. It is important to note that the SCAQMD mandates that these source tests be conducted by laboratories that are certified by the SCAQMD and adhere to their approved testing methodologies.
In accordance with Vernon Municipal Code (VMC) Section 3.32.080, on October 4, 2023, staff issued a Request for Proposals (RFP) for Source Testing Services for Natural Gas Generation Facilities. The RFP was advertised on the City's Planet Bids platform. The scope of services included testing the annual relative accuracy test audit of continuous emission monitoring systems, annual systems utilizing aqueous ammonia, and triennial testing of particulate matter, volatile organic compounds, and sulfur dioxide.
Subsequently, proposal packages were received from two firms by the October 18, 2023 deadline, including a proposal from Montrose Air Quality Services, LLC (Montrose). Pursuant to VMC Section 3.32.090, price was not a factor in determining the most qualified bidder. A qualified panel thoroughly examined the proposals received based on demonstrated competence (45%), professional qualifications (45%), and overall quality and responsiveness to the RFP (10%).
After a thorough review, one proposal was disqualified, as the format and delivery of the response did not meet the specifications stated in the RFP. The proposal from Montrose was responsive to the RFP and demonstrated the best expertise, experience, and comprehensive approach to the services requested in the scope of work detailed in the RFP. Montrose possesses extensive experience and familiarity with the required testing and steps to complete emission measurement programs that meet the regulatory agency's needs and stringent requirements. Additionally, Montrose has performed source testing services for VPU at Station A and MGS previously and performed such services to the City’s satisfaction.
Staff recommends that the City Council approve a Services Agreement with Montrose to provide source testing for natural gas generation facilities for a total amount not-to-exceed $238,238 over a term of three years.
The proposed Services Agreement has been reviewed and approved as to form by the City Attorney’s Office.
Fiscal Impact
The fiscal impact is not-to-exceed $238,238 for the three-year term. Sufficient funds are available in Electric Fund, Malburg Generation Station Department, Environmental Account No. 055-050- 586-520232 and Generation Department, Generation Expense Account No. 055-050-560- 520230 for the current fiscal year. Sufficient Funds will be budgeted in subsequent years.
Attachments
1. Services Agreement with Montrose Air Quality Services, LLC.