Explanation
This ordinance authorizes the Director of Public Utilities to modify the Master Services Agreement with American Municipal Power, Inc. (AMP) to authorize AMP to purchase wholesale electricity through block power purchases for a term beginning with execution of the modification and ending no later than December 31, 2025.
The Division of Power’s projections for purchase power needs accounted for 4.8 megawatts (MW) generated by biomass and combined heat and power generation units under construction at the Jackson Pike (JPWWTP) and Southerly (SWWTP) wastewater treatment plants. These projects have been delayed and are now estimated to come online in mid-2024 (JPWWTP) and 2026 or 2027 (SWWTP). AMP is currently procuring energy to make up the 4.8MW deficit through the Real-Time market, which is a spot market where electricity is procured for immediate delivery with prices calculated every five minutes (for more than 10,000 different pricing points) according to actual grid operating conditions. Block power purchases can lock in better pricing and provide more price stability.
This Ordinance is being submitted in accordance with the relevant provisions of Chapter 329 of City Code pertaining to contract modifications.
1. Amount of additional funds: The total amount of additional funds needed for this contract modification #18 is $0.00. Total contract amount including this modification is $335,450,534.00.
2. Reason additional funds were not foreseen: No additional funding is required.
3. Reason other procurement processes were not used: American Municipal Power, Inc. is a non-profit organization for state municipalities and, acting as a broker, has contracted for competitive prices on the City's behalf through a bidding process.
4. How was cost determined: The delay in biomass and combined heat and power generating units at the wastewater treatment plants was known while the budget was developed and the estimated cost of making up that energy ...
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