HomeMy WebLinkAbout06/21/2011 RFP Results Purchase of ElectricityMount Prospect Public Works Department
INTEROFFICE MEMORANDUM
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TO: VILLAGE MANAGER MICHAEL E. JANONIS
FROM: DIRECTOR OF PUBLIC WORKS
RE: RESULTS OF RFP FOR THE PURCHASE OF ELECTRICITY
DATE: JUNE 13, 2011
Background
Public Works routinely purchases electricity for water and sanitary sewer pumping as well as
streetlighting. Since the electricity market was deregulated for commercial customers several
years ago, the Village has been requesting pricing from authorized electric resellers. The last
agreement for streetlighting was with Exelon expiring July 2011. The last agreement for water
and sanitary sewer pumping was also with Exelon and expires May 2012.
In anticipation of the expiration, staff structured a request for proposals to supply electricity
during two distinct, consecutive time periods. The first period is for a term of 10 months and is
designed solely to procure electricity for streetlighting. It will terminate upon the expiration of
the current water and sewer pumping purchasing agreement in May 2012. The second period
will commence in May 2012 and run for the subsequent 20 calendar months expiring with the
meter reads at the end of December 2013. The desired effect of this structure is that
procurement of electricity for both purposes (streetlighting and water /sewer pumping) will be
combined into a single agreement that should attract better pricing and reduce administrative
costs.
Results
On June 9, 2011, staff solicited pricing from six (6) vendors. Price proposals were received on
June 13, 2011. Four (4) electrical energy suppliers responded:
Discussion
The above rates are an all -in fixed rate at $ per kilowatt hour (kWhr) for electricity. In addition to
the above rates, Commonwealth Edison charges an average $0.0575 per kWhr for delivery
services to cover local transmission and distribution costs. This charge would be added to the
cost of energy for all providers.
Vendor ($ per kWhr)
Mid-
Direct
Term
Expiring
American
Exelon
Sem ra
Ameren
Energy
Constellation
is, 10
months
5-2012
0.0430
0.03887
No Bid
0.05
No Bid
0.042008
Next 20
months
12 -2013
0.0466
0.04457
No Bid
0.04796
No Bid
0.046245
Discussion
The above rates are an all -in fixed rate at $ per kilowatt hour (kWhr) for electricity. In addition to
the above rates, Commonwealth Edison charges an average $0.0575 per kWhr for delivery
services to cover local transmission and distribution costs. This charge would be added to the
cost of energy for all providers.
Page 2 of 2
Results of RFP for Electrical Energy
June 13, 2011
Currently, the Village pays Exelon 5.987 cents per kWhr for streetlighting and 5.669 cents per
kWhr for water and sewer pumping. Under this proposal, Exelon will continue to supply the
Village with electricity for streetlighting during the first 10 months at a savings of 2.10 cents per
KWhr. During the subsequent 20 months, this proposal will save 1.53 cents per KWhr on
streetlighting energy and 1.212 cents per KWhr on water /sewer pumping energy.
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's offer stipulated acceptance within 24 hours.
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 Exelon's
proposal on June 13, 2010. 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.
Sean P. Dorsey
Cc: Finance Director David Erb
Water /Sewer Superintendent Matt Overeem
Village Engineer Jeff Wulbecker
Project Engineer Donna Brown
Administrative Coordinator Kristina Mykolaityte
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