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TO: Mayor Richard C. Irvin
FROM: Jim Birchall, Superintendent of Central Services
DATE: October 10, 2017
SUBJECT:
A resolution authorizing the Mayor to execute an agreement with an electricity supplier to provide electricity to various city facilities not covered under the ComEd Franchise Agreement.
PURPOSE:
To obtain the City Council's approval to authorize the Mayor to execute an agreement resulting from a reverse auction conducted by the city's electricity consultant, Traditional Energy. It is necessary to execute the contract before close of business on the day of the reverse auction. The reverse auction is targeted for mid-October 2017.
If the Mayor is unavailable to confirm a contractual agreement, the Interim Director of Purchasing is authorized to do so. In the absence of the Director of Purchasing, the succession falls to the Interim Chief Financial Officer/ City Treasurer.
BACKGROUND:
Constellation Energy provides electricity to over 70 accounts/city facilities not covered under the current ComEd Franchise Agreement. The City's agreement with Constellation Energy ends in February 2018. The City has historically used the services of a consultant to obtain bids from electricity suppliers. Tradition Energy was contracted 2016 to provide these services for a three year term. They will continue to review and identify renewal opportunities throughout 2017, 2018, and 2019. The bids include an array of sourcing options: i.e. duration of commitment, percentage green energy, percentage blended energy.
The city must choose their preferred options and enter into a contract prior to close of business the day of the auction.
DISCUSSION:
Electricity is a commodity in which the price changes daily. Long term agreements are priced to offset market risks. The percentage of green energy influences price.
Should the city choose to delay entering an agreement at the conclusion of the reverse auction, proposers would increase price to offset their risk
IMPACT STATEMENT:
Timing is critical. The current contract expires in February 2018. If the reverse auction does not occur in mid-October, the affected city accounts will pay above market price for services.
If we followed a traditional approval process (Invitation to Bid), the electricity proposers would add a contingency fee to their bid thus adversely affecting cost to the city.
RECOMMENDATIONS:
Request that a resolution authorizing the Mayor to execute an agreement with the electricity supplier offering the best fitting sourcing option be approved.
cc: Alderman O’Connor, Chairman
Alderman Mesiacos
Alderman Bugg
Alderman Mervine, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution authorizing the Mayor to execute contracts with electricity suppliers to provide electricity to the City of Aurora.
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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, Illinois municipalities were afforded the opportunity to purchase electricity from any one of the multiple electricity suppliers in the market place effective January 1 2007; and
WHEREAS, the City is currently soliciting competitive proposals from electricity suppliers due to the expiration of the current contracts in February 2018, and
WHEREAS, the City expects that it will be necessary to accept proposals of the most competitive firms and execute any associated contracts the same day the proposals are submitted.)
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows:
Section 1: That, pursuant to the solicitation of competitive proposals to provide electricity to City-owned properties in mid October 2017, the Mayor is hereby authorized to accept those proposals deemed to best meet the City's electricity needs and execute all related contracts for the provision of said electricity to City-owned properties
Section 2: That in the absence of the Mayor, the Interim Director of Purchasing is authorized to take the actions described in Section 1 above.
Section 3: If any section, paragraph, clause or provision of this Resolution shall be held invalid, the invalidity thereof shall not affect any other provision of this Resolution.
Section 4: All ordinances, resolutions, motions or orders in conflict with this Resolution are hereby repealed to the extent of such conflict.