HomeMy WebLinkAbout2023-03-28 - AGENDA REPORTS - DESIGN BUILD CONTR HYDROGEN STATION TMFO
Agenda Item: 1
1. CITY OF SANTA CLARITA
AGENDA REPORT
NEW BUSINESS
CITY MANAGER APPROVAL: '
DATE: March 28, 2023
SUBJECT: DESIGN -BUILD CONTRACT FOR THE CONSTRUCTION OF THE
NECESSARY IMPROVEMENTS, SUPPLY, AND INSTALLATION
OF HYDROGEN PRODUCTION EQUIPMENT AND
COMMISSIONING OF THE HYDROGEN STATION AT THE
TRANSIT MAINTENANCE FACILITY
DEPARTMENT: Economic Development
PRESENTER: Adrian Aguilar
RECOMMENDED ACTION
City Council:
1. Authorize the City Manager or designee to execute a design -build contract with Trillium,
subject to City Attorney approval and availability of funding, for $11,280,776 for the design
and construction of a hydrogen production and fueling station at the Transit Maintenance
Facility, including a contingency of $1,036,862 for a not -to -exceed amount of $12,317,638.
2. Authorize the City Manager or designee to execute an agreement with Southern California
Edison, subject to City Attorney approval, for the completion of utility upgrades, permits,
and associated fees at the City's Transit Maintenance Facility, with a not -to -exceed amount
of $1,200,000.
3. Authorize the City Manager or designee to execute an agreement with Santa Clarita Water
Company, subject to City Attorney approval, for the completion of utility upgrades, permits,
and associated fees at the City's Transit Maintenance Facility, with a not -to -exceed amount
of $60,000.
4. Authorize the City Manager or designee to execute agreements for inspections and materials
testing services, subject to City purchasing policies and City Attorney approval, pay any
related plan check, permits, and labor compliance fees associated with this project, with a
not -to -exceed amount of $420,000.
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5. Appropriate funds in the amount of $13,997,638 to Expenditure Account 7003702.520102,
and from those funds, increase Miscellaneous Federal Grants Revenue Account 700.442409
by $11,039,578, increase Municipal Operator Service Improvement Program Revenue
(MOSIP) Account 700.442207 by $2,000,000, and increase SBIState of Good Repair
Revenue Account 700.442414 by $958,060.
BACKGROUND
In December 2018, the California Air Resources Board adopted the Innovative Clean Transit
(ICT) regulation. The ICT regulation requires all public transit agencies to gradually transition to
100 percent zero -emission bus fleets. To prepare for this transition, staff analyzed various
options and determined that hydrogen fuel cell buses were the best option available to meet the
City of Santa Clarita's needs. This determination was based on range, need for additional
infrastructure, and long-term operating costs.
As state law requires, the City Council adopted the City Zero Emissions Transition Plan (Plan) in
late 2020. The Plan serves as a roadmap for the City to comply with the state mandate, which
requires the City to have a 100-percent zero -emission bus fleet by 2040. The Plan calls for a
phased approach in which 50 percent of all new local transit buses purchased before 2028 are
zero -emission. This approach was taken given that CNG powered buses cost less to purchase
compared to zero emission fuel cell buses.
In December 2021, the City retained the services of Hydrogen, Technology & Energy (HTEC), a
consulting firm, to help the City in the analysis, method determination, specification
development, and project management of hydrogen fueling infrastructure at the Transit
Maintenance Facility (TMF).
In June 2022, the City released a Request for Qualifications inviting interested firms to submit
their qualifications for the design and construction of a hydrogen production and fueling station
at the TMF. The City received four submissions and determined that all four firms (Clean
Energy, Trillium, H2B2, and Kiewit) were qualified to undertake this project.
In September 2022, the City finalized the station specifications and issued a Request for Proposal
(RFP), inviting the four qualified bidders to submit their proposals for the design and
construction of a hydrogen station at the TMF.
The City received proposals from Clean Energy and Trillium in response to this RFP. Kietwit
and H2B2 were contacted to inquire why they did not submit a proposal, despite being deemed
qualified and given two extensions to the proposal due date. Kiewit stated staffing and qualified
partners as a reason. H2B2 did not respond to our inquiry.
The proposals from Clean Energy and Trillium were evaluated by a panel of City and HTEC
staff who ranked each proposal based on past performance and experience, project approach,
technical design, project costs, and ongoing operating and maintenance costs. Clean Energy
proposed a steam methane reformer capable of producing between 347 and 630 kilograms of
hydrogen per day. Trillium proposed using a one -megawatt electrolyzer capable of producing
between 43 and 430 kilograms of hydrogen per day. While both bidders are capable and have
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excellent references, the initial cost difference between the two solutions was approximately $4
million.
The initial costs were as follows:
• Clean Energy: $18,277,902.98
• Trillium $14,180,082.97
Based on the initial cost proposals, City staff modified some of the project specifications, and
each firm was asked to submit its best and final pricing.
As part of the best and final offer, Clean Energy modified its proposal to eliminate the steam
methane reformer and proposed a station that would rely on delivered liquid hydrogen. Their
proposal also called for elimination of the 900 BAR dispenser and the installation of a 15,000-
gallon liquid cryogenic storage tank. The station would be designed and constructed to allow for
the removal of the cryogenic storage tank and the installation of a steam methane reformer at a
later date.
Trillium's best and final proposal called for a reduction in on -site storage capacity, an increase in
fill time to less than 15 minutes, and the elimination of a 900 BAR fueling dispenser.
The best and final pricing is as follows:
• Clean Energy: $7,312,720
• Trillium: $11,280,776
While the Clean Energy best and final offer was significantly less when compared to Trillium,
their proposed modifications differed significantly from the original and modified project scope.
Based on federal procurement standards, this level of change to the scope would require the City
to cancel the procurement and rebid the project to include a liquid hydrogen delivery option.
Moreover, since a Design -Build contract award is not subject to a low bid obligation, compared
to the traditional design -bid -build method, but is rather based on best value procurement
methodology, the City has the authority to award a contract to a higher -priced firm.
While a liquid delivery station is less expensive to construct initially, delivering liquid hydrogen
costs 70 to 90 percent more than producing hydrogen on -site. Currently, there are only a small
number of commercial hydrogen production sites in the state. This would require the City to
purchase and truck the liquid hydrogen from the Inland Empire, Sacramento, or Las Vegas.
Additionally, it would subject the City to swings in hydrogen costs and make it vulnerable to
delivery disruptions.
The advantage of the Trillium proposal is that it allows the City to better control fuel costs. It
also allows the City to match hydrogen production with need. The production capacity of the
proposed electrolyzer can be "turned down" in the first few years of operation and increased as
the size of the fuel cell fleet grows. Based on the current cost of liquid hydrogen and the
estimated cost to produce on site, staff estimates that cost differential between the two proposals
would be recovered in 7.5 years.
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As proposed, the Trillium solution would support up to 16 hydrogen fuel cell buses. It can later
be expanded to include additional storage and a second electrolyzer when needed without
requiring significant modifications to the station design. By 2040, it is anticipated that the
hydrogen station will need to produce approximately 2,200 kilograms of hydrogen per day to
meet the needs of a 100-percent hydrogen fuel cell bus fleet.
Based on the ongoing operating costs, scalability, and reliability of the electrolyzer solution, staff
recommends awarding the design and construction contact to Trillium.
ALTERNATIVE ACTION
Cancel the procurement and direct staff to reissue an RFP for the design and construction of a
hydrogen production and fueling station at the City's Transit Maintenance Facility.
2. Other action as determined by the City Council.
FISCAL IMPACT
There is no fiscal impact to the General Fund. The City has programmed Federal 5307 Transit
Grant funds amount of $5,549,710, SB1 State of Good Repair amount of $958,000, and MOSIP
amount of $402,712 to cover the project design, permitting, and equipment costs, for a total of
$6,910,422. The project's balance, including construction costs and utility upgrades, will be
covered by FY 2023-24 Federal Transit Administration 5307 and local grant funds totaling
$7,087,216.
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