TRANSMITTAL LETTER FOR BOARD MEETING OF SEPTEMBER 4, 2014
COMMITTEE ON PROCUREMENT
Mr. David St. Pierre, Executive Director
Title
Ratification and approval of the Executive Director's decision authorizing the Director of Procurement and Materials Management's execution of the letter accepting the offer to amend the Agreement Between the Metropolitan Water Reclamation District and MidAmerican Energy Company, for a One (1) Year Extension of the Current Agreement 11-RFP-17 to Supply Electric Energy Starting January 1, 2015 and Ending December 31, 2015 in an amount of $0.03759 per kWh RTC
Body
Dear Sir:
At the Board meeting of February 2, 2012, the Board of Commissioners granted authority to exercise the option to extend and amend the existing agreement with MidAmerican Energy Company (MidAmerican) for up to three additional years subject to the District obtaining a price at the current or lower contracted price for an amount not to exceed $0.03676 per kWh RTC if such price is deemed advantageous to the District. If the agreement is extended, the only terms that may vary are the contracted prices and termination date.
The original fixed price for the years 2012 and 2013 was $0.03676 per kWh RTC, while the current fixed price with MidAmerican, which ends on December 31, 2014, is $0.03535 per kWh RTC. The fixed price includes the cost of the supply as well as all losses, ancillary charges and RCC. This fixed price for 2014 was pursuant to a one-year extension approved by the Board.
The new fixed price agreed to between the District and MidAmerican is $0.03759 per kWh RTC that starts on January 1, 2015 and ends on December 31, 2015. The supply component of the new fixed price is less than the supply component in the original contract. The new price is considered advantageous to the District and in its best interest to extend, due to budgetary concerns and possible higher projected prices for 2015. The price of electricity is tied to the natural gas market price and prices have been rising for natural gas, and the storage levels of natural gas are very low at this point in time.
Accordingly, it is requested that the Board of Commissioners ratify and approve the Executive Director's decision authorizing the Director of Procurement and Materials Management's execution of the letter accepting the offer to amend the Agreement Between the Metropolitan Water Reclamation District and MidAmerican Energy Company, for a One (1) Year Extension of the Current Agreement 11-RFP-17 to Supply Electric Energy Starting January 1, 2015 and Ending December 31, 2015 in an amount of $0.03759 per kWh RTC and further ratify and approve the Director of Procurement and Material Management's execution of said letter.
Requested, Manju P. Sharma, Director of Maintenance and Operations
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management, DAL:SEB:cm
Respectfully Submitted, Barbara J. McGowan, Chairman Committee on Procurement
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for September 4, 2014