TRANSMITTAL LETTER FOR BOARD MEETING JANUARY 9, 2025
COMMITTEE ON Procurement
Mr. Brian A. Perkovich, Executive Director
Title
Authorization to exercise an option to extend and amend agreement or administer a reverse auction to procure electricity and renewable energy credits (RECs) under Contract 20-RFP-24 for years 2026 and 2027, subject to 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 2026 and 2027.
The District has options for procurement of electricity for years 2026 and 2027. One option is to accept extension pricing for the years 2026 and/or 2027 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, with an option to extend the agreement up to an additional five years. On May 30, 2024, the Director of Procurement and Materials Management accepted extension pricing from MP2 Energy NE LLC for a term of twelve months, from December 2024 through December 2025. The District has the option to extend the agreement up to an additional four 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, favorable pricing must be accepted within hours of receiving the offer.
Another option is to host an reverse auction in which the District solicits pricing from pre-approved suppliers. The reverse auction will request pricing for the delivery of electricity and RECs for up to two years, 2026 and 2027. 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 reverse 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.
The extension of the termination date is in compliance with the Illinois Criminal Code because it is germane to the original agreement as signed and is in the best interest of the District.
The Affirmative Action Interim Ordinance Appendix D and the Multi-Project Labor Agreement was not included in Contract 20-RFP-24 because this is a furnish and deliver contract and there are no other opportunities for subcontracting.
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 2026 and/or 2027. The authorization expires December 31, 2026.
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 January 9, 2025