CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Approve the award of Bid 26-124, 34.5-12.47 kV Power Transformer to WEG Transformer USA LLC for an amount not to exceed $4,096,400 plus a 3% contingency
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DEPARTMENT: Electric Utility
SUBMITTED BY: Raheel Arshed, Deputy Director
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
Substation transformers are critical components of the Electric Utility’s electric grid. Thirty-eight active substation transformers serve over 63,000 customer meters, resulting in one of the highest customer-to-equipment ratios from a reliability standpoint. Substation transformers are designed for a 30-year service life. With proper maintenance and without frequent overloading, they can continue to operate reliably for many years beyond their expected service life.
The Electric Utility maintains a multi-faceted, multi-year project approach to improve system reliability for substations, which includes the procurement of strategic spare transformers.
The City's fleet of transformers consists of three common voltage combinations:
• 138kV to 34.5kV: The City currently has four transformers of this configuration in service. A fifth unit is being added as part of the Tollway project, and a spare of this voltage and size is on order. Expected delivery for the new Tollway unit and the spare is late 2026 or early 2027.
• 138kV to 12.47kV: The City has 22 transformers of this configuration. The previous spare was recently deployed, and a new spare is on order, with delivery expected in 2028.
• 34.5kV to 12.47kV: There are nine transformers on the system of this configuration. One of the transformers at the Chicago Substation has started showing signs of aging. The City does not currently have a spare 34.5kV to 12.47kV transformer.
The other uncommon configurations include two transformers at Indian Hill Substation that are 34.5kV to 13.2kV for Nokia. This non-standard voltage was selected by Lucent years ago as part of the development that built the Indian Hill Substation. The current Nokia load can be serviced easily by only one transformer should one fail.
Edward Hospital is served by two transformers that are 34.5kV to 4.16kV as part of their legacy system. For the two transformers serving Edward Hospital, the City has a spare for each to allow rapid restoration should either of the current units fail.
Lead times on substation transformers are between two and four years, depending on the size and bids that are received.
DISCUSSION:
On May 26, 2026, the Electric Utility Department issued Bid 26-124, 34.5-12.47 kV Power Transformer, seeking qualified vendors to procure two new substation transformers. One of the transformers will be installed at the Chicago Substation to retire the aging unit, and the other transformer will be stored as a strategic spare to allow for restoration of normal configuration should a transformer of this configuration fail.
Bids were received from the following vendors:
|
Vendor Name |
Proposed Cost |
|
WEG Transformers USA LLC |
$4,096,400 |
|
CL Sales, LLC |
NON-RESPONSIVE |
|
Weldy Lamont Group, Inc |
NON-RESPONSIVE |
DPU-E Engineering developed a technical specification for a 138kV to 34.5kV substation transformer. The specification was bid and three responses were received.
Two of the bids were deemed non-responsive. One of the bidders specialized in rebuilding/repairing transformers and did not include firm pricing on required items in the bid. One of the bidders did not meet the specification requirements.
Staff recommend awarding the contract to WEG Transformers USA LLC., as the lowest responsive and responsible bidder for the procurement of the 138kV to 34.5kV substation transformer. WEG Transformers USA LLC included two main technical exceptions with their bid submission. DPU-E staff addressed the exceptions and have preliminarily determined they are acceptable.
The approximate project completion date is 128 weeks from the date of award, based on the anticipated production and delivery lead times for the transformers.
The approximate delivery date is February 14, 2029, based on an anticipated 128-week production and delivery period from the date of award.
FISCAL IMPACT:
CIP #: EU079
34.5-12.47 kV Power Transformers are expensed to the Infrastructure account listed below. The purchase of two new power transformers is being done under EU079, the Substation Power Transformer Replacement Program. The Electric Utility included $1.2M in the 2026 budget for expenses related to EU079. Although the transformers associated with this award are not anticipated to be delivered until 2029, the City will have milestone payments over the next few years associated with this award. Staff anticipates realizing roughly 20% of the expenses associated with this award in 2026, totaling $819,280. This amount is within the amount budgeted for EU079 in 2026. Staff will ensure sufficient funding is included in future budgets to support the additional milestone payments associated with this award.
|
Account Number |
Fund Description |
Total Budget Amount |
|
40251300-551502 |
Electric Utility |
$25,151,500 |