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��i <br />Elk River , <br />Municipal Utilities UTILITIES COMMISSION MEETING <br />TO: <br />FROM: <br />ERMU Commission <br />Mike Tietz —Technical Services Superintendent <br />MEETING DATE: <br />AGENDA ITEM NUMBER: <br />August 13, 2024 <br />5.5 <br />SUBJECT: <br />East Substation Power Transformer Bid <br />ACTION REQUESTED: <br />Accept WEG Transformers USA, LLC bid for transformer and award contract contingent upon <br />final review by legal counsel. <br />BACKGROUND: <br />Approved with the 2024 budget was the addition of a new electric substation. This new <br />substation named East substation will be located on Lot 1, Block 1 within Natures Edge Business <br />Center Third Addition. The official address is 16740 Gateway Road. Staff worked with DGR <br />Engineering to assemble the transformer specifications for the project. Notice for formal bids <br />were sent out to bidders on June 26, 2024, with bids opened on August 1,2024. <br />DISCUSSION: <br />One of the larger components of the substation addition is the transformer. This transformer <br />steps down the 69kV transmission system to ERMU's distribution voltage of 12.47kV. The cost <br />of this transformer exceeds the statutory threshold amount and is subject to competitive <br />bidding law. The quotes and equipment specifications were reviewed by our substation <br />engineering contractor, DGR Engineering. Specifications in the bid solicitation included a <br />minimum requirement of delivery date by September 1, 2026, with possible preference given to <br />units manufactured and assembled in the United States. In the bid specifications, ERMU <br />reserved the right to consider the minimum requirements, give preference to units <br />manufactured and assembled in the United States, and to award the bid as deemed to be in <br />ERMU's best interest. <br />Two bids were received: <br />1 <br />Niagara Power Transformer Corporation <br />$1,369,945 <br />2 <br />WEG Transformers USA, LLC <br />$1,535,200 <br />Despite having a lower bid, Bidder 1 could not meet the delivery date requirement. Bidder 2 <br />could meet the delivery date requirement, possibly with a unit manufactured and assembled <br />outside of the United States. <br />Page 1 of 2 <br />93 <br />