2004 AGN AUG 03 I17 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF AUGUST 03, 2004 TO: HONORABLE MAYOR AND CITY COUNCIL FROM: Jeannette Olko, Electric Utility General Manager Item #17 SUBJECT: Request for Approval of Professional Services Agreement with Black and Veatch DATE: July 26, 2004 BACKGROUND: The Agua Mansa Power Plant was originally conceived as a combined cycle generating facility, but was built as a simple cycle plant because it was more cost-effective. A combined cycle generating facility will allow the plant to operate more efficiently by reducing the heat rate output of the turbine. This in turn reduces the cost of energy, and enormously helps to optimize the plant. The City of Colton Electric Utility received an unsolicited bid from PARGEN, LLC to build out the Agua Mansa Power Plant to a combined cycle generating facility by adding a second turbine and a heat recovery steam generator. DISC USSI ON/ANALYSIS: The proposal received from PARGEN, LLC offers to design, build, and own a second natural gas turbine and steam turbine sited next to the existing turbine owned by the City. As part of the proposal, and because it is in the best interests of both parties, a technical assessment study needs to be performed to verify costs and performance estimates of the combined cycle plant. Both parties have agreed to share in the costs of the study, and have agreed to enter into a Reimbursement Agreement upon approval by Council. An informal bid was prepared and sent to three vendors. Black and Veatch came back with the lowest bid for the scope of services required. These tasks include providing performance estimates, operation and maintenance cost estimates, permitting assessments, capital cost estimates, project schedule, drawings, and a summary report of the key findings. It is anticipated that this study will take approximately eight weeks to complete. Upon completion of the report, both parties will determine whether or not it is feasible to move forward with the project. FINANCIAL IMPACT: The agreement with Black and Veatch is for an amount not to exceed $50,000. There are funds available in account number 520-8000-8022-2350-0923-000. If the Council approves the Reimbursement Contract with PARGEN, LLC, then the City will be reimbursed for half of the costs of the agreement with Black and Veatch. ENVIRONMENTAL IMPACT: None. CONFLICT OF INTEREST — Gift Disclosure Requirements Black and Veatch Corporation 6 Venture, Suite 315 Irvine, CA 92618 President: Len Rodman, CEO Contact: James Butcher, Regional Client Manager