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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 Dec...
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