Explanation
BACKGROUND: This legislation authorizes the Director of Public Utilities to negotiate with multiple potential providers of purchase power, to enter into a contract for purchase power and waives provisions of Columbus City Code relating to award of contracts through the RFP process. Negotiating contract terms and power pricing with more than one provider should allow the City to secure the best contract available.
The Department of Public Utilities will request proposals from potential suppliers and will negotiate contract terms and conditions with suppliers deemed to have submitted responsive proposals. This process will allow department staff to compare proposals and terms in order to select the best purchase power contract for the Division of Power and Water.
The existing purchase power contract is in effect until May 31, 2012. The new proposal would provide power through May 31, 2014. It is in our customer's best interest to obtain stable prices in advance and it would be beneficial to secure power for these years at this time. Wholesale electric prices are currently driven by the volatile and escalating prices for natural gas and coal that are used to generate electricity. It is also adjusting to restructuring/deregulation by the Federal Energy Regulatory Commission (FERC) and state public utility commissions in an effort to increase competition. These factors have created a seller's market for power producers and a change in the market dynamics. This wholesale power market environment warrants authorizing the Director of Public Utilities to negotiate contract terms with more than one potential supplier. The department wishes to advertise for purchase power at this time because current market conditions indicate future pricing may in fact be lower than would have been anticipated . This request for proposals will determine whether purchasing power through May of 2014 will provide stable or possibly reduced cost.
This ordinance is requested to be an emergency measure to allow contract negotiations to begin at the earliest possible date.
FISCAL IMPACT:
There is an expenditure of $1.00 associated with this ordinance to allow the Director of Public Utilities the authority to enter into a contractual agreement for the purpose of locking down a firm fixed price for the supply of power. It is anticipated that the contract will have a multi year term beginning June 1, 2012. Ordinances will be submitted yearly to fund any planned phases of the contract.
Title
To authorize the Director of Public Utilities to negotiate and enter into a contract for purchase power, to waive provisions of Columbus City Code relating to award of contracts through the request for proposal process, to authorize the expenditure of $1.00 from the Electricity Operating Fund; and to declare an emergency. ($1.00)
Body
WHEREAS, it is necessary to enter into a contract for purchase power for the estimated power needs prior to expiration of the current contract on May 31, 2012; and
WHEREAS, in order to secure the best combination of contract terms and pricing it is advisable to negotiate with more than one potential power supplier; and
WHEREAS, it is in the best interest of the City due to current conditions within the power purchase marhet to authorize the Director of Public Utilities to negotiate contract terms and enter into a contract with the power supplier deemed to provide the best overall terms and pricing; and
WHEREAS, it is necessary to waive provisions of Columbus City Code relating to selection using the request for proposal process to allow negotiation with multiple power suppliers; and
WHEREAS, an emergency exists in the usual daily operation of the Division of Power and Water, of the Department of Public Utilities, in that is immediately necessary to authorize the Director of Public Utilities to negotiate and enter into a contract for purchase power, to waive provisions of Columbus City Code relating to award of contracts through the RFP process, in an emergency manner to allow contract negotiations to begin at the earliest possible date, for the immediate preservation of the public health, peace, property and safety, now, therefore
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That this Council finds the best interest of the City is served by waiving, and does hereby waive Section 329.14 of the Columbus City Codes, 1959, concerning awarding contracts through the request for proposal process.
SECTION 2. That the Director of Public Utilities is hereby authorized to negotiate for and to enter into a contract for the supply of purchase power for the Division of Power and Water in the amount of one dollar ($1.00).
SECTION 3 That the expenditure of $1.00 is hereby authorized from the Electricity Operating Fund 550, Division 6007, OCA 600830, OL1 02, OL3 2233
SECTION 4. That for the reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance is hereby declared to be an emergency measure and shall take effect and be in force from and after its passage and approval by the Mayor, or ten days after passage if the Mayor neither approves nor vetoes the same.