cover
TO: Mayor Richard C. Irvin
FROM: Martin S. Lyons, Chief Financial Officer
Chuck Nelson, Deputy Mayor
DATE: September 30, 2019
SUBJECT:
To obtain the City Council's approval of the attached resolution that would authorize the execution of an agreement with Progressive Energy Group (PEG), for the provision of Energy Agent Consulting Services.
PURPOSE:
Progressive Energy Group has a local office in Aurora, IL and will assist the City in acquiring natural gas, electric supply and demand response programs, along with providing an aggregation option.
BACKGROUND:
The City has had two previous providers for similar services. In 2012, Good Energy was awarded the contract and retained it until 2016 when it was awarded to Tradition Energy. In these buying situations it's not uncommon to turn to an outside party with more expertise in energy trends and cost forecasting.
DISCUSSION:
It shall be the responsibility of PEG to provide CITY OF AURORA an audit and RFP service that will examine several factors including but not limited to:
Natural Gas Pricing and Procurement
Electric Pricing and Procurement
Applicability of Taxes, Utility Rates and Tariff Charges
Utility Metering Charges
Demand Response Programs
Green and Carbon Free Programs
Illinois Solar for All Programs
Recommendations for Savings
Supplier Contract Review and Compliance with Industry Standards
Execution Strategy for Implementation
Ongoing Energy Industry Trends and Marketplace Intelligence
Budget Review and Development for Energy Supply and Delivery
Total fees for the first year consulting fees will be $19,000 paid to PEG and $3,000 annually thereafter. The breakdown of fees paid to PEG is listed below:
1) $10,000 for the initial electric sourcing agreement.
a) This will only be paid if the City of Aurora saves is at least $100,000 annually vs.
current contract.
b) This will only be paid if the City of Aurora electric price is at least 5% lower than West
Aurora SD 129 July 9, 2019 electric price.
c) This will only be paid after any new contract starts (the earliest would be March
2020).
2) $3,000 for the initial natural gas sourcing agreement.
a) This will only be paid if the City of Aurora saves is at least $10,000 annually.
3) $3,000 for the initial Electric Demand Response sourcing agreement.
a) This will only be paid if the City of Aurora savings is at least $10,000 annually.
4) $3,000 annually for ongoing monitoring of the wholesale electric & natural gas market,
legislative and regulatory impacts and franchise account rules that have potential
opportunities and threats to the City of Aurora.
a) This will only be paid if City agrees there was substantial value provided. This
payment is at the sole discretion of the City.
Funding for the services will be paid on out of the corresponding Division 62-04 account (Supplies-Energy / Electricity-General).
IMPACT STATEMENT:
Approval of this resolution will provide continued energy consulting services to ensure the best and lowest costs to the City.
RECOMMENDATIONS:
The City Council approve the proposed attached resolution that would authorize the execution of an agreement with the Progressive Energy Group for the provision of energy agent consulting services as outlined above.
cc: Finance Committee
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A Resolution authorizing the execution of an agreement with Progressive Energy Group, for the provision of Energy Agent Consulting Services.
body
WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, the Illinois Power Agency Act, Chapter 20, Illinois Compiled Statutes, Act 3855, added section 1-92 entitled Aggregation of Electrical Load by Municipalities and Counties, codified at 20ILCS3855/1-92; and
WHEREAS, the City has deemed it to be beneficial to engage qualified consultant to assist with various energy purchases and other services; and
WHEREAS, Funding for the services will be paid on out of the corresponding Division 62-04 account (Supplies-Energy / Electricity-General); and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: authorizing the execution of an agreement with Progressive Energy Group, for the provision of Energy Agent Consulting Services .