A seemingly routine contract approval recently spurred a larger discussion about Silicon Valley Power’s system expansion plan.

At the Nov. 18 Santa Clara City Council meeting, Vice Mayor Kelly Cox pulled the contract from the consent calendar. Consent calendar items are routine city business, voted on in one motion. However, the public and council members can pull items to vote on them individually if they have questions, need clarification or want to dissent.

The pulled item was five contracts with five consultants to assist with SVP’s expansion, which aims to double the city’s electric load by 2032. 

The contracts were with Electric Power Engineers, Flynn Resource Consultants, Inc., Handran Engineering, Leidos Engineering and Power-Tech Engineers, Inc. for engineering services. 

The contracts are each one-year, $1 million contracts, but authorize City Manager Jovan Grogan to increase that amount by up to $10 million. The scope includes load-flow analysis, project scoping and regulatory submittals, system-level and operational engineering support — such as a transmission and reliability study.

Reputation Concerns

Pulling the item, Cox said she wanted to “establish the facts” on how the contracts play into the system expansion. Since the specifics of the work were unclear from the document packet, the council gets ahead of each meeting, she said she hoped to better understand it.

Further, Cox worried that a recent Bloomberg report had damaged the city’s reputation. The report detailed how Santa Clara data centers have waited years for power. Cox called the article a “hit job” that sends a “really terrible message about Santa Clara’s positionality.”

“When we say that an article comes out saying that we have empty data centers, not enough power to fill what we’ve promised … I want to know what our staff is going to do about that and our messaging,” she said.

Although outside the scope of the contracts, Cox said she has been hearing in the development community that Santa Clara “is not a friendly place for data centers.”

In response, Nico Procos, director of SVP, told the council that work is “highly specialized.” While he echoed Cox’s woes about employee shortages, he said that since the work is short-term, the city doesn’t even have the necessary roles. So, even if the city was fully staffed, it would still need to outsource the work.

Since SVP has been struggling, especially in engineering, outsourcing such work, he said, has been a very successful model. Despite this, it is still on track to meet the growth needs. 

Although Procos said he “couldn’t really get into it,” SVP is exploring “innovative alternatives” that include working with Emerald AI and Stanford’s Bits & Watts Initiative.

“We are trying to figure out what projects do we need to accommodate the future growth … We are working on something that will allow us to optimize how we operate our system,” he said. “We want to be careful that what we do doesn’t cause reliability impacts on our system.”

While Procos said he wasn’t “trying to be evasive,” the question of whether the SVP has over-promised and under-delivered is “complicated.”

Kicking the Wasp’s Nest

Council Member Suds Jain noted that the city is on a “tight deadline” for its expansion ambitions but wondered why the materials given to council weren’t more specific, as has been typical in the past.

Council Member Kevin Park joined in that concern.

Both City Attorney Glen Googins and Daniel Ballin, assistant city attorney, repeatedly assured the council that the format was “standard” and “nothing unusual,” noting how using templates is typical and that city employees were still “finalizing” the language.

Grogan said the format was “almost a necessity to conduct business in a timely manner.”

But Park pushed back, saying at least the “skeleton” of the work should be included, which wouldn’t be part of a template. Given the timeline, he said it was confusing that such information was excluded.

“You’re asking us to approve something that will take effect even before the next council meeting. So, at some point, I would think they should be pretty final at this point,” Park said. “I am not trying to argue what we have done or what we could do.”

Mayor Lisa Gillmor interjected, saying the back-and-forth was just “going in circles.”

“It is not circles,” Park said.

“The city manager has already given an adequate answer,” Gillmor said.

“Oh, I don’t think he has,” Park said.

During her comments, Gillmor called the Bloomberg article “deliberately negative.” Data centers are essential to the city’s general fund, she said, calling them “more critical to our city than almost anything.” Consequently, she said, the city needs to protect its reputation as the west-coast data center leader. 

“The data center world is a small world, and they talk. And what I’ve heard about Santa Clara recently, I actually don’t like what I’ve heard,” Gillmor said. “Our reputation is critical to our success in attracting and retaining these data centers. So, I think protecting our reputation and delivering what we promise we are going to deliver at the time that we deliver what we promise is important.”

Grogan said the council will handle the matter through various mechanisms: it can have a larger discussion during the SVP’s biannual update Dec. 16, examine substation agreements and through negotiations with its larger customers. Negotiations with the two customers cited in the article are ongoing, he added.

The contract that sparked the discussion passed in a 5-1 vote, with Park dissenting.

Contact David Alexander at d.todd.alexander@gmail.com