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.
The Department has purchase power contracts in effect through May 31, 2018. The new proposal would request pricing for 6, 12-month, and 18-month terms in order to secure power up to November 30, 2019. The term of any contract that may be executed would depend on pricing proposals received. It is in our customers' best interest to obtain stable prices in advance, and it may be beneficial to secure power for this period at this time. Wholesale electric prices are currently driven by volatile prices for natural gas and coal that are used to generate electricity. Prices are also adjusting to restructuring/deregulation by the Federal Energy Regulatory Commission (FERC) and state public utility commissions in an effort to increase competition.
Wholesale market conditions are currently favorable due to decreased demand and relatively low natural gas prices. This wholesale power market environment warrants authorizing the Director of Public Utilities to negotiate contract terms with more than one potential supplier. This ordinance does not require the Director of Public Utilities to execute a contract if the RFP process does not produce pricing/terms and conditions that serve the best interest of the City.
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