TRANSMITTAL LETTER FOR BOARD MEETING OF SEPTEMBER 4, 2014
COMMITTEE ON PROCUREMENT
Mr. David St. Pierre, Executive Director
Title
Authorization to negotiate agreements with Ameresco, Inc., for professional services and a long-term off-take of digester gas for Contract 13-RFP-06 Biogas Renewable Energy Project at the Calumet Water Reclamation Plant (As Revised)
Body
Dear Sir:
Authorization is requested to negotiate with Ameresco, Inc., for a professional services contract and a long-term agreement for off-take of digester gas for Contract 13-RFP-06 Biogas Renewable Energy Project at the Calumet Water Reclamation Plant (Project No. 14-250-3P Digester Gas Utilization, Calumet Water Reclamation Plant). The current total cost estimate for this project is $14,953,617.00. The details of the design, off-take, construction and maintenance agreements will be brought to the Board for authorization prior to execution.
A Request for Proposals, 13-RFP-06, Biogas Renewable Energy Project at the Calumet Water Reclamation Plant (CWRP), was advertised on March 13, 2013, soliciting proposals for the engineering design and construction of a facility or facilities for the beneficial use of digester gas at the CWRP. This was an open RFP. The overall objective of the RFP was to reduce the District's energy footprint by maximizing the production and beneficial use of digester gas, also known as biogas, as a renewable energy resource in a manner that is economically beneficial, energy efficient, and environmentally responsible. The purpose of the RFP was to identify a highly reputable and experienced contractor to design and build a system for producing renewable energy from the biogas generated in the CWRP's existing anaerobic digesters.
Nine proposals were received from the following firms or teams:
- Ameresco, Inc.
- Anaergia Services, LLC
- Green Recycling Technologies, Inc.
- Honeywell International and CH2M Hill
- Innovative Energy Solutions, Ballard Engineering, IHC Construction Partnership
- Meade Electric Company, Inc.
- Midwestern Electric, Inc, Leopardo Companies, Inc., and Project Integration Joint Venture
- MWH Americas, Inc.
- Natural Systems Utilities, Green Seed Energy, and Middlesex Water Company (NSU)
After review of the initial proposals, it was determined that it would be in the District's best interest to break the proposals into component options, such that the overall project goals could be met by combining the best components from different proposers. Therefore, firm price proposals for specific project options were solicited from the short-listed teams Ameresco, Inc., Anaergia Services, LLC, and NSU. Subsequently, Best and Final Offers (BAFO) were solicited on March 20, 2014, from the same three short-listed firms. The responses to the BAFOs provided firm price proposals for engineering design, construction, and a Five Year Maintenance Plan.
The Selection Advisory Committee panel's independent ratings, when compiled, show the High BTU option, proposed by the Ameresco, Inc. team, which would produce pipeline-quality gas, to be the most advantageous to the District for producing energy from biogas. This team's strengths include expertise in design/build projects, an excellent project manager and design team, reliable technology, experience with biogas projects. A separate transmittal letter is presented on this agenda for the organic waste receiving and processing facility option that was also highly rated.
The project work will be accomplished in four separate agreements with Ameresco, Inc. The first agreement is for the long-term off-take of digester gas produced that the Calumet Water Reclamation Plant. The second agreement is for engineering design services. The level of expertise required for the engineering design agreement consists of engineers and draftsmen experienced in process, structural, mechanical, electrical, and civil engineering design. The third agreement is for the construction of the digester gas cleaning facilities and appurtenances. The fourth agreement is for the Five Year Maintenance Plan. All four of the agreements will require Board approval.
The time frame for the cleaned digester gas off-take agreement is 7 years with three one-year renewal options. The agreement will stipulate the minimum daily volume of cleaned digester gas to be supplied, the specific quality requirements for the digester gas, the pricing components, gas production notification requirements to the off-taker, and the terms for payment to the District. The off-take pricing structure will include a percentage of the current Renewable Identification Number (RIN) and Low Carbon Fuel Standards (LCFS) values trading on the renewable energy market. The RFP provided indicative terms and conditions for the cleaned digester gas off-take agreement. Once the final terms and conditions have been negotiated, a request will be made to the Board to approve the agreement.
The overall scope of work includes connection to the plant's digester gas collection piping system, installation of a pressure swing absorption gas cleaning system in the vicinity of the anaerobic digester complex, installation of gas compressors, installation of a gas pipeline and connection to Nicor's natural gas pipeline located near 138th Street south of the CWRP, and a 7-year off-take agreement and commitment to purchase the cleaned digester gas from the District.
The total fee for the engineering design agreement is $1,255,000.00, to be distributed over approximately 13 months. The approximate time allowed for services to be performed under this agreement is 390 days from the date the contract is awarded.
Upon completion of design, a request will be made to the Board to enter into an agreement with Ameresco, Inc. for the construction of the designed facilities. The price proposal for the construction portion of the work is $13,147,788.00. Based on the final outcome of the design, the price proposal for the construction work will be adjusted as necessary prior to award. As construction nears completion, a request will be made to the Board to enter into an agreement with Ameresco, Inc. for the Five-year Maintenance Plan. The price proposal for the Five Year Maintenance Plan is $550,829.00. Based on a final review of District needs at that time, the price proposal for the Five Year Maintenance Plan will be adjusted as necessary prior to award.
Based on the foregoing, the District requests authorization to negotiate agreements with Ameresco, Inc., for professional engineering services and for a long-term agreement for off-take of digester gas from the Calumet Water Reclamation Plant.
Requested, Catherine A. O'Connor, Director of Engineering, TK
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management
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