cover
TO: Mayor Robert J. O’Connor
FROM: Chuck Nelson, Director of Neighborhood Standards
DATE: December 14, 2016
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 early January 2017.
If the Mayor is unavailable to confirm a contractual agreement, the Director of Purchasing is authorized to do so. In the absence of the Director of Purchasing, the succession falls to the Chief Financial Officer/ City Treasurer.
A summary review of the process and factors influencing award will be presented to council.
BACKGROUND:
Constellation Energy provides electricity to over 20 city facilities not covered under the current ComEd Franchise Agreement. The City's agreement with Constellation Energy ends in December 2016. The contract provides for a one month extension. The City has historically used the services of a consultant to obtain bids from electricity suppliers. 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 December 2016. The contract allows a one month extension. If the reverse auction does not occur in early January, the affected city accounts will pay above market price for services.
If traditional approval process is utilized, the electricity proposers would have to 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 at the December 20 Committee of the Whole Meeting.
cc: Alderman O’Connor, Chairman
Alderman Mervine
Alderman Bohman
Alderman Mesiacos, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A Resolution Authorizing the Mayor to execute contracts with electricity suppliers to provide electricity to the City of Aurora.
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, 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 December 2016, 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 beginning in January 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 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.