Explanation
BACKGROUND: This ordinance authorizes a modification of DL012676 with American Electric Power Service Corporation (AEPSC) for the purchase of capacity and energy for the Division of Power and Water in 2007.
Amount of additional funds to be expended: $0
Reasons additional goods/services could not be foreseen: The Division of Power and Water entered into a contract for capacity and energy with American Electric Power Service Corporation (AEPSC) in 2006 based upon the lowest, responsive proposal offered. The original contract was established in the amount of $1.00 as authorized by Ordinance 0837-2006, passed May 22, 2006. Subsequent ordinances have been passed to provide funding for the purchase of capacity and energy. PJM Interconnection, L.L.C. (PJM), is a Regional Transmission Organization offering transmission service to eligible customers, and having functional control over the American Electric Power Company Inc.'s (AEP) East Zone transmission network upon integration of AEP's East Zone into PJM. PJM implemented marginal-loss pricing on June 1, 2007 making it necessary to add a new section to the city's contract with AEPSC to address the terms of marginal transmission losses. The new Section 6 (d) to be added will read as follows:
"Seller has included the cost of the transmission losses in its prices in Section 6 (a). As such, Seller shall receive Company's Share of any refund allocation from PJM arising from any over-collection by PJM of marginal transmission losses during the Delivery Period."
Reason other procurement processes are not used: The City of Columbus, Department of Public Utilities is obligated by contract to obtain capacity and energy services from American Electric Power Service Corporation (AEPSC).
How cost of modification was determined: There is no additional cost associated with this modification.
Emergency action is requested in order that the modification may be executed and the terms regarding marginal losses may be implemented as soon as possible.
Contract Compliance Number: 134922640, expires 6/12/2008
FISCAL IMPACT: This modification will not have any fiscal impact on the existing budget. The amount budgeted in the Electricity Operating Fund 550 for purchase power is $56,873,315. The total amount spent for purchase power in 2005 and 2006 was $39,054,452 and $37,677,109.56, respectively.
Title
To authorize the Director of Public Utilities to modify the existing contract with American Electric Power Service Corporation to obtain capacity and energy for the Division of Power and Water by adding a section pertaining to marginal transmission losses and to declare an emergency. ($0)
Body
WHEREAS, Ordinance Number 0837-2006, passed May 22, 2006, waived the provisions of Columbus City Code Article 329.14, to authorize the Director of Public Utilities to negotiate and enter into contract for purchase power; and
WHEREAS, Contract DL012676 was established with American Electric Power Service Corporation (AEPSC) based upon the lowest responsive proposal received; and
WHEREAS, PJM Interconnection, L.L.C. (PJM), is a Regional Transmission Organization offering transmission service to eligible customers, and having functional control over the American Electric Power Company Inc.'s (AEP) East Zone transmission network upon integration of AEP's East Zone into PJM; and
WHEREAS, PJM implemented marginal-loss pricing on June 1, 2007 making it immediately necessary to modify the City's existing contract with AEPSC by adding a new section to address the terms of marginal transmission losses; .
WHEREAS, an emergency exists in the usual daily operation of the Division of Power and Water, of the Department of Public Utilities, in that it is immediately necessary to modify the existing contract to obtain capacity and energy for the preservation of the public health, peace, property, safety and welfare; now, therefore,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the Director of Public Utilities be and is hereby authorized to modify the existing contract with American Electric Power Service Corporation to add a new section pertaining to marginal losses relating to capacity and energy purchases for the Division of Power and Water.
SECTION 2. 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.