The URL can be used to link to this page

Home My WebLink AboutItem 18 - Electrical PurchaseMEMO TO FROM: MEETING DATE SUBJECT RECOMMENDATION: mom HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL ROGER NELSON, CITY MANAGER d�f NOVEMBER 20, 2001 APPROVAL OF AN ELECTRICAL PURCHASE AGREEMENT City Council to consider approving an agreement to purchase electrical energy and authorize the City Manager as signatory and take any necessary action. BACKGROUND: Grapevine joined the Houston -Galveston Area Council (H -GAC) aggregation to secure pricing for electrical purchase. Council approved a Resolution to authorize purchase of electrical power from H -GAC and TXU Inc. on November 6, 2001. The Resolution contained an indicative price of $0.041595/kwh and the provision that if the price exceeded the indicative price the Resolution was not binding. TXU submitted a final price on November 16, 2001 of $0.04397, due to a recent surge in natural gas prices. This exceeded the indicative price and Grapevine had the option of waiving the Resolution and seeking alternative procurement methods. Staff contacted Malcolm Pirnie, our energy consultant, to seek their advice. Their recommendation was that the final price submitted by TXU was still the most advantageous offer (see attached letter). Bids were received on November 6, 2001 for electric purchase from providers for Grapevine's electrical purchase and the final price submitted by TXU was the overall best bid. TXU pricing and terms and conditions are superior. Under the old price Grapevine stood to save $382,000 for the 2 -year term based on last year's energy consumption. Based on the new price Grapevine will still realize a savings of $362,000. H-GAC/TXU's price was only good for the 24-hour period ending at 5:00 p.m. November 14. Market conditions are such that no provider will hold a price for longer than 24 hours. Staff felt it was in the best interest of the City to take advantage of the H- GAC/TXU proposal and executed the offer sheet committing the City to a firm price of $0.04397/kws for a 2 -year term. MS/ms o:\agenda\10-02-01\aggregation.agm November 14, 2001 (11:37AM) 100 aced R IA308D 10 A110-01 OE9B1r5�01-Woij We91:80 100Z-trl-A0P1 peA1938N November 14, 2001 Mr. Matt Singleton Assistant Public 'Works Director City of Grapevine 501 Shady Brook, Drive Grapevine, TX 76051 RE: REVISED PROPOSAL o.F HGAC Dcar Matt: We have reviewed the revised pricing of HGAC. We recommcrzd you accept the revised proposal based upon these key points. -The pricing of the closest competitor, AES New Energy, is the same on the large accounts but is likely to somewhat deteriorate if the small accounts are added in. -The banding of HGAC is preferred and easier to manage. -The payment terms of HGAC are 30 days while AES New Energy is requiring 15 days payment. -The HGAC aggregation should be able to identify and resolve electric service issues sooner than any individual organization with its own supply contract. Please do not hesitate to contact me if you have any questions. Very Truly Yours, MALCOLM PIRNM, INC. John P. Nerison Associate 4374001 c: Jerry Hodge 201 MCCUI k OUGH DRIVE SUITE 360 CHARLOTTE. NC 28262 704-547-8550 705-547-8S30 f=x http://v,%vw.pirnie.com t/t 30` C1 0CSe/_t'stFO4'QI 110 aINdid W1031vW°WONA 90=01 10-bt-ADN Cost Analysis* *All values based on a two-year term contract. (I ) Estimate 1.0 cent per kwh (2) Used two part pricing (average price shown) (3) City of Grapevine makes AES whole on consumption outside of band (4) Quoted large and small accounts together (5) Only applicable if Large and small accounts are included (6) Excludes streetlights City of Grapevine November 2001 AES New Energy 1" ` � �� First Choice Power r�a,.. % Swing 10% Unlimited Acquisition Fee on w (3) Actual Charges g� ., i None Over Consumption - Over Consumption , (3) Actual Charges None Charge Re -selling Fee on l Ch(3) Actual Charges �5f None Under Consumptiona�� t� '}. Under Consumption (s Actual Charges ) �` ` �t `x 1 tt None Credit ,K�t Over Capacity Charge gr) $0 �t r ati` i i l � �, y� $0 �; N/A�r�� l w n N/A Aggregation Fee QJ '� in $12 Set Monthly Charge $0 �� ;�N ��e ��i�1 � �% i { t� Transmission &mw Distribution Charges a� Pass Thru�k Pass Thru , w� y �aQi �C bi 1.�.YY t51 e^'Ati �1 gj X11 �6) Price All Accounts diex Not Quotedti . �€tit�i 50.0466 per kwh Price Large Accounts q {fa $0.04277 per kwh344tiper �h $0.0465 per kwh Price Sinai] Accounts 'Not'V ikd Not Quoted ,, I` of Qitt�tid $0.0469 per kwh r h� 1, Price Street Lights �;;t3tQtP�r: Not Quoted Not Quoted *All values based on a two-year term contract. (I ) Estimate 1.0 cent per kwh (2) Used two part pricing (average price shown) (3) City of Grapevine makes AES whole on consumption outside of band (4) Quoted large and small accounts together (5) Only applicable if Large and small accounts are included (6) Excludes streetlights City of Grapevine November 2001 41-111), Contract/Plan 4: 1-SATYZ Account Name: City of Grapevine Plan Type: Flat 9TXU Price Sheet — Flat Price TXU Energy Services This Price Sheet is only valid in association with and shall remain subject to the Terms and Conditions for Supply of Electricity ("Terns") and Offer for Supply of Electricity referenced above and is contingent upon Customer's acceptance of the Offer prior to the Offer Expiration Date. This Price Sheet is applicable to the Customer ESI number(s) identified on Exhibit A of the Terms. Monthly Prices shall equal the sum of (i) the Monthly Standing Charge set forth below; plus (ii) the applicable per kWh charges set forth below for the electricity; plus (iii) all costs and expenses of any nature whatsoever that are charged by the Transmission and Distribution Service Provider ("TDSP") for the transmission and/or distribution of the electricity, as well as any other charges of the TDSP that are attributable to the Customer Account numbers, including, without limitation, charges for reactive power; plus (iv) all other tariffs, rates, riders, fees, and charges, charged by the TDSP or another party, that are mandated, levied, assessed, allowed, or approved by the Texas Public Utility Commission and all other governmental or regulatory authorities, on or with respect to the acquisition, sale, delivery, and purchase of the electricity; plus (v) all federal, state, and local taxes, of any nature whatsoever, imposed by all governmental and regulatory authorities, on or with respect to the acquisition, sale, delivery, and purchase of the electricity, including Seller's Texas Gross Receipts Tax on the sale of electricity to Buyer; plus (vi) the Over Capacity Charge set forth below, if applicable: plus (vii) an aggregation fee of $0.00045 per kWh actually consumed by Buyer collected by Seller on behalf of and paid to HGAC Energy Purchasing Corporation. Charge Amount Month1v Standing Charge per $5.00 rvice point ll kWh $0.04397 per kWh $0.0170574 per kWh for delivery, excluding reactive TDSP Delivery Charges power, based upon current estimate;* Monthly price will be based upon actual charges. Tariffs, rates. riders. fees, and charges other than those included To be determined, varies by service point in TDSP delivery charges above All applicable taxes To be determined, varies by jurisdiction Over Capacity Charge $0.00 per kW The costs and expenses charged by the TDSP for delivery services may fluctuate during the Agreement Term, as will other applicable taxes. tariffs, riders, fees, and charges. * For reference purposes only. This is the current estimate of the average TDSP standard delivery costs, excluding charges for reactive power, special metering, or other miscellaneous TDSP charges. Form NameNersion: PRICE SHEET FLAT PRICE 110701 Page 1 Transaction Confirmation #: 1-8ATYZ BUYER: City of Grapevine SELLER: TXU Energy Services Company 208'W DALLAS RD STE 100 1601 Bryan, 7"' Floor Grapevine, TX 76051 Dallas, Texas 75201 Phone: Phone: Fax: Fax: L AGREEMENT TERM The Primary Term for each Premise, identified in Exhibit A, shall commence upon the date of the first reading of the meter(s) on each respective Premise by the TDSP after 01/0112002, or as soon thereafter as practicable, and shall end for each Premise upon the date of the first reading of the respective Premise meter(s) by the TDSP after 12/31/2003. II. PAYMENT TERMS Net 30 Days III. DEPOSIT AMOUNT No initial deposit required. IV. BILL PRESENTMENT CI Paper METHOD V. PAYME:' 7METHOD Check VL STANDARD SERVICES Toll free number (800) 725-7920) for 24 hour emergency outage and customer service, available 7:00 a.m. to 7:00 p.m. on non -nal business days; Assigned customer service representative, billing analyst, and assigned professional account manager. I"II. CUSTOM SERVICES Not Applicable VIII. SPECIAL PROVISIONS Not Applicable IX. COST PER KWH See attached Price Sheet X. MONTHL Y CONTRACT 25% per month for excess usage and USAGE TOLERANCES 25 %per month for under usage (see section IV, Calculation and Payment of Charges in the Base Contract for Supply of Electricity) XI. TER,'tIS AND CONDITIONS THE TERMS AND CONDITIONS FOR THE SUPPLY OF ELECTRICITY ("TERMS") SEPARATELY EXECUTED BY BUYER AND SELLER, ARE PART OF THE AGREEMENT TO WHICH THIS OFFER FOR THE SUPPLY OF ELECTRICITY APPLIES. BUYER ACKNOWLEDGES THAT IT HAS RECEIVED THE TERMS, AND IN THE EVENT THAT BUYER HAS NOT PREVIOUSLY EXECUTED THE TERMS, BY SIGNING THIS OFFER BUYER AGREES TO BE BOUND BY THE TERMS AS PROVIDED BY SELLER. Buyer Signature: Seller Signature: Name (Please print): Name (Please print): Position: Position: Date: Date: Form Mme; Ver,ion- OFFER SHEET 110701 Page I