(1)AR 100108 Submittal of Bid for Transformers

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CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF OCTOBER 1, 2008 TO: Honorable Mayor and City Council FROM: Jeannette Olko, Electric Utility General Manager SUBJECT: Request Approval to Bid on Two 69/12.47KV Pauwels Power Transformers for the Hub Substation and Delegate to the City Manager the Authority to Submit the Bid. DATE: September 29, 2008 BACKGROUND: Transformer #1 and transformer #2 at the Hub Substation were installed in 1971, and over the last several years have been subjected to faults, extreme heat, and high load conditions. These events, coupled with the age of the transformers, have deteriorated the condition of the transformers such that they are in need of refurbishment. The original plan was to remove them when the transformers that were ordered in October 2007 are delivered, and send the older transformers to the manufacturer for refurbishment. The manufacturer is located in Pennsylvania. The estimated cost of refurbishment is several hundred thousand dollars each, depending on the condition of the internal core, which won't be known until the transformer is actually removed and inspected. If a new internal core is required, the cost could then be potentially higher than the cost of a new transformer. The refurbishment is anticipated to take approximately six months, including shipping time. In addition, the electric utility is experiencing higher than anticipated peak load from Pacific Rail's expanded operation. The increased peak load and the frequency of the peak spikes are negatively impacting the system, necessitating an analysis of an alternate service connection. DISCUSSION/ANALYSIS: On September 16, 2008, staff became aware of two 15/20/25 MVA — 69/12 kV 3-phase transformers that the City of Anaheim is auctioning. These two transformers were manufactured in 2001, and were purchased for a CEP project that was subsequently cancelled. The transformers have never been installed. The bids for these transformers were originally due by 5 pm on September 22, but the bid deadline was extended to October 6, 2008. Since becoming aware of the availability of these transformers, our staff, with the assistance of Black and Veatch, has been reviewing the nameplate drawing and analyzing the manufacturer's specifications, and believe that these two transformers are compatible with our system. Staff will be inspecting and testing the transformers over a period of two days to ensure the viability of the units.