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Mount Prospect Public Works Department
INTEROFFICE MEMORANDUM
TO: VILLAGE MANAGER MICHAEL E. JANONIS
FROM: DIRECTOR OF PUBLIC WORKS
RE: RFP RESULTS FOR THE PURCHASE OF ELECTRICITY
DATE: MARCH 13, 2013
Background
Public Works routinely purchases electricity for water /sewer pumping as well as streetlighting
and miscellaneous use. Since the commercial electricity market was deregulated several years
ago, the Village has been requesting pricing from electricity suppliers utilizing a request for
proposals (RFP) process. Our current agreement is with Exelon. It is set to expire in December
2013.
In anticipation of the upcoming expiration of this agreement, and recognizing recent low prices
available in the marketplace, staff prepared an RFP to secure an electricity supply for a term
commencing in December 2013. We requested pricing for either a two (2) year term or a three
(3) year term.
RFP Results
On March 5, 2013, staff distributed the RFP to ten (10) vendors. Proposals were due on March
8, 2013. Four (4) vendors responded:
The lowest pricing is from Exelon /Constellation Energy for a two (2) year term. Their proposed
rate is lower than the existing rate paid for utility pumping and streetlighting. Currently, the
Village pays 4.497 cents per for pumping and streetlighting electricity. The proposed rate, 4.051
cents per kWhr, promises 0.446 cents per kWhr savings.
The above figures are an all -in fixed rate at $ per kilowatt hour (kWhr) for electricity. In addition
to the above rates, Commonwealth Edison will charge an additional fee per kWhr for delivery
services to cover local transmission and distribution costs.
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RFP Results for the Purchase of Electricity
March 13, 2013
Exelon /Constellation Energy's proposed new rate (4.051 cents /kWhr) is also lower than the
Village's municipal aggregation rate (4.65 cents per kWhr).
Due to the volatile nature of the electricity market, most supplier price tenders are valid for a
very short period of time. In this instance, Exelon /Constellation Energy's offer stipulated
acceptance within one (1) business day. To provide a mechanism for managing this market
idiosyncrasy, the Village Board adopted a resolution in May 2010 authorizing the Village
Manager to enter into one or several contractual agreements to supply electrical energy for the
Village's municipal operations (Resolution No. 25 -10). Therefore, the Village Manager was
asked to execute an acceptance of the Exelon /Constellation Energy proposal on March 11,
2013. This action is consistent with the provisions of Resolution 25 -10.
Recommendation
This memorandum is submitted for informational purposes only. No further action is required of
the Village Board.