2000 AGN MAR 21 I19 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT For City Council Meeting of March 21, 2000 TO: Honorable Mayor and City Co cc''I APPROVAL: Henry T. Garcia, City ManagePV' gyp' FROM: Thomas K. Clarke, Utility Director Z Q" SUBJECT: APPROVAL OF POWER RESOURCE SCHEDULING, DISPATCHING, AND OPTIMIZATION SERVICES WITH CORAL POWER DATE: March 9, 2000 The Electric Utility has to monitor its demand and supply on a twenty-four hour basis. The Utility has contracted with Sempra Energy Trading, previously named ENOVA to provide these Scheduling and Dispatching services. The existing contract expires on June 30, 2000, after a five-year term. The fixed cost of the existing contract is $240,000 per year. DISCUSSION The Utility solicited proposals to provide Scheduling, Dispatching, and Optimization services. There were six proposals received. All the proposals, except one (APX-MZA), were from single entities as specified in the RFP. We evaluated all five qualified proposals based on their capabilities, location, performance incentives, and fixed and profit sharing cost. The proposals were evaluated based on an assumed $500k per year savings through optimization of our power resources. The term of the new contract is sixteen months with an option to extend for an additional one year. ANALYSIS Based on fixed cost, the proposals from the City of Riverside and Coral Power were the lowest Coral Power's Option #1 has the lowest fixed cost of $48k per year, with an additional $48k per year through profit sharing. The total annual cost of $96k will cover their basic cost to provide these services, and this option could also bring the City a minimum $112k and a maximum up to $282k in revenue (based on $500k savings) through profit sharing. The City of Riverside's proposal is based on a fixed cost of $160k per year (it includes a $40k transitional cost), with an additional $60k per year through profit sharing. Because of their close proximity, Coral Power, in San Diego, and the City of Riverside were invited for interviews. The only other interview was given to Sempra Energy Trading, being as they are the present scheduling coordinator for the City. Based on fixed costs and incentives to earn additional savings in the first year, staff selected Coral Power as the successful bidder to provide the Scheduling, Dispatching, and Optimization services. One of the important aspects in selecting Coral Power was zero security deposit requirements compared to the City of Riverside who requires deposit in the range of $300k to $500k. All other services provided through the contract were virtually identical. ALTERNATIVES The annual cost to the City to provide its own services would be over $500k, and the cost of extending the existing contract with Sempra would be a $204k fixed cost. Both the options are more expensive than the Coral Power proposal. Page 1 of 2 Item #19