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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
IMP...
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