2002 AGN MAY 21 I26 - Laserfiche WebLink

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Item #26 CITY OF COLTON CITY COUNCIL AGENDA REPORT For Council Meeting of May 21, 2002 TO: Honorable Mayor and City Council Members FROM: Thomas K. Clarke, Utility Director �� ` APPROVAL: Daryl J. Parrish, City Manager SUBJECT: Colton Jets Generation Project DATE: May 13, 2002 BACKGROUND The Electric Utility needs to replace thirty (30) megawatts of contract energy due to its expiration on July 1, 2003. In addition, the City will experience load growth from new construction that will necessitate additional generating capacity approaching 50 mW. At this time it appears that the best option is to replace these resources by building a power plant within the City Iimits. Staff is recommending that the generator be modeled around a General Electric LM6000 technology or like design. At its January 22, 2002, meeting, the City Council determined that the most reasonable project be pursued, and concurred with the Staff recommendation that an RFP be released for a turn-key construction process. DISCUSSION I ANALYSIS Once the decision was made to replace, through owned-generation, the energy lost from the two contracts, staff developed an RFP to satisfy both the short- and long-term growth needs for capacity and energy facing the City. In excess of twenty RFP's were sent to prospective bidders. Seven qualified bidders responded which led to a lengthy, detailed review by our consultants and the internal staff. The goal was to determine the best partner for the project which pursued the best interest of the City and the ratepayers. The bids that were responsive to the RFP were tightly grouped, even in the initial review. Of the bids received, the quotes were all within five percent of the mean. The Director, the Engineering Manager, and the City's Resource Consultants reviewed the responses from two different perspectives. First, adjustments were made to the financial poAion of the response to establish equal footing from the standpoint that the bidders were all e�visioning the same final product. In a number of cases, the bidders interpreted components of the RFP differently. Thus, different amounts were included for the same component of the bid. For example, some bidders included one year worth of air credits, some included seven years worth, and some bids levelized costs over a number of years. These all had to be "normalized" to determine which one represented the lowest responsible bid. In addition, Staff created a bid matrix of the envisioned partnership attributes that would enhance the value of the contract. These elements were assigned a numeric value and each bid was analyzed to see how they fared under these points. These included the fixed bid price and non-firm priced components, as well as other attributes such as ability to secure environmental compliance, experience in assisting the City to secure long-term gas supplies, etc. From all of this, staff and the consultants were able to come up with a ranking of the bids to determine the lowest priced proposal that presented the greatest value. Under this approach, the lowest priced bid was not the one which gave the greatest value to the City in terms of getting the project completed in a