TRANSMITTAL LETTER FOR BOARD MEETING MARCH 16, 2023
COMMITTEE ON PROCUREMENT
Mr. Brian A. Perkovich, Executive Director
Title
Authorization to exercise an option to extend agreement or administer a reverse auction to procure electricity and renewable energy credits (RECs) under Contract 20-RFP-24 for years 2025 and 2026, subject to the District obtaining pricing that is favorable to the District
Body
Dear Sir:
It is requested that the Board of Commissioners authorize the Director of Procurement and Materials Management to procure electricity with favorable pricing for years 2025 and 2026.
The District has options for procurement of electricity for years 2025 and 2026. One option is to accept extension pricing for the years 2025 and/or 2026 from the current provider. On November 9, 2022, the District conducted a reverse auction to procure electricity for 2023 and 2024 and awarded contracts for Groups 1 and 2 to MP2 Energy NE LLC. The District has the option to extend the agreement up to an additional five years. If the agreement is extended, the only terms that will vary are the contracted prices and termination date. Extending the agreement allows the District to capitalize on dips in the market. To do so, the District needs to accept favorable pricing within hours of receiving the offer.
Another option is to host an auction in which the District solicits pricing from pre-approved suppliers. The auction will request pricing for the delivery of electricity and RECs for up to two years, 2025 and 2026. The pricing options will include 100% conventional, 90% conventional and 10% renewable power, and 85% conventional and 15% renewable power. Proposers will be allowed to offer and reoffer pricing until the close of the auction time for each pricing group. The proposers must hold their prices for a certain period (i.e., 3 hours) after the online auction is closed to allow the District time to evaluate and compare offers.
Due to the short time to accept pricing, it is requested that the Board of Commissioners authorize the Director of Procurement and Materials Management to exercise either option to procure electricity for years 2025 and/or 2026. The authorization expires December 31, 2024.
A report will be submitted to the Board of Commissioners after procurement of electricity.
Requested, John P. Murray, Director of Maintenance and Operations, PD:MFM
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management
Respectfully Submitted, Marcelino Garcia, 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 March 16, 2023