Council clears path for Silicon Valley Power upgrades: NRS construction contract awarded and easement eminent‑domain resolution approved

The Santa Clara City Council on Tuesday approved two city utility actions to advance Silicon Valley Power’s system expansion: a public‑works contract for upgrades at the Northern Receiving Station (NRS) and a resolution of necessity to begin eminent‑domain proceedings to secure a required easement.

Northern Receiving Station contract The council unanimously awarded Contract No. 2454 for NRS upgrades and expansion to Henkels & McCoy West LLC in the amount of $47,788,603.86, acceptance of nine bid alternates could raise the contract to a not‑to‑exceed $59,857,093.14, and staff sought authorization for change orders up to a 15% contingency (about $8.9 million) for a total not‑to‑exceed package of $68,835,657.11. The project will add three 115‑kV transformers and two 230‑kV transformers, replace or upgrade bus and foundations, and prepare space for a CAISO‑approved third 230‑kV feed.

Procurement notes: Staff reported two rounds of competitive bidding and a mandatory pre‑bid walk; two bids were received in the second round and Henkels & McCoy’s corrected bid was about 32% below the engineer’s estimate. SVP staff said both contractors self‑performed a large share of the work, which likely reduced subcontractor risk and contributed to lower bids. Council members asked for post‑award review of the contractor’s schedule of values to inform cost monitoring.

Easement and resolution of necessity (3205 Bassett Street) Separately, the council adopted a resolution of necessity (6–1) to authorize the city to begin eminent‑domain proceedings if required to acquire an easement for the 115‑kV route approved earlier. SVP staff said the project’s preferred alignment (Route A) requires an easement from several parcels along Lafayette/Bassett; staff mailed an offer and engaged in months of negotiations with the owner of 3205 Bassett Street but reached an impasse.

Findings and process: The resolution records findings required by the Eminent Domain law: (1) public interest and necessity for the project, (2) that the route is compatible with the public good and minimizes private injury (staff described an alternatives analysis), (3) that the specific easement is necessary for the route, (4) that the environmental review (mitigated negative declaration and monitoring program) was completed, and (5) that an offer of fair market value was made to the owner (per Government Code procedures). The resolution authorizes staff to pursue acquisition by eminent domain if voluntary sale cannot be completed; staff told council that, pending final determination of just compensation, the city could pursue an order of possession partway through the condemnation process.

Why it matters: SVP said the combined projects are required to increase the city’s operating transfer capacity toward an approximately 1,300 MW target (up from a constrained level near 819 MW) to serve growth and to meet interconnection requirements. SVP and staff emphasized that the route and station upgrades are part of a multi‑year capital program and that some later works depend on additional regulatory clearances and CAISO approvals.

What’s next - Procurement: Staff will return to finalize change orders, alternates and a construction schedule; SVP said construction management and commissioning tasks remain after contract award. - Property acquisition: Staff will continue negotiations with the 3205 Bassett owner but may proceed with eminent domain if negotiations do not produce a voluntary sale.

Ending note Council members unanimously supported the NRS contract award; they supported the easement resolution 6–1 after a public hearing. Staff said the two actions together will allow SVP to move forward on a critical series of upgrades needed to expand the city’s transmission capacity.