TO: Mayor and City Council
FROM: Kevin Sing, Director of Finance
SUBJECT:
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Electric Supply Auction and Authorization to Select Low Bidder
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BACKGROUND:
In an effort to obtain the lowest prices on electricity, the City uses the services of Apollo Edison to conduct reverse auctions for its approximately 115 sewer and water electric accounts. The reverse auction firm conducts the bid over the internet giving City personnel the opportunity to monitor the proceedings. The City had previously selected Apollo Edison through a formal request for proposal. The cost for Apollo Edison’s services is embedded in the cost of electric at $0.0010/kWh.
The City’s current contracts for electricity expire on April 30, 2025, with a fixed price of $0.05301/kWh. It is staff’s intention to conduct the auction as early as March 19, 2025. Bids will be solicited for periods of 12 months, 24 months, and 36 months for both regular electricity and 10% green energy supply. At the conclusion of the auction, staff and the consultant will review pricing and select the option that is expected to provide the City with the lowest cost of electric over the long term. This process will look at indicators that impact electric pricing over the long term. Since the procurement of electricity is an open market and bids are only valid for 24 hours, staff is requesting that the City Manager have the authority execute the agreements to lock in the best pricing.
The City has the right to refuse, at no cost, any and all pricing if it does not feel that the pricing is favorable.
The Finance Committee will be reviewing this item at their March 18th meeting.
CONCLUSION:
This action will ensure that that the City receives the best pricing available for its electric supply costs.
RECOMMENDATION:
recommendation
It is recommended that the City Council authorize the City Manager to conduct an electric auction and award an electric supply agreement to the winning bidder.
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