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Home My WebLink About1997-09-02; City Council; 14327; Electrical RestructuringSANDAG REQUEST FOR RECOMMENDED ACTION: Authorize Mayor Lewis to sign letter on behalf of the City authorizing the use of the City of ( electrical load and billing data in the regional Request for Qualifications and Request for Pro power supplies and other energy services. ITEM EXPLANATION: The Ad Hoc Committee, and a working group of 110 public agencies in the region, recomr its July 11, 1997 meeting that all interested public agencies in the region include their elect in a solicitation for bids for power and related services. The attached letter to SANDAG ( authorizes the use of the City of Carlsbad’s electric load and billing data in the RE Qualification and Request for Proposals for power supplies and other energy services. ’ based on the Ad Hoc Committee’s work with special consultants, is that favorable rates an can be obtained by the maximum number of agencies pooling their electric loads. The lette that the City of Carlsbad will participate in the SANDAG regional power pool given that competitive benefits can be achieved by the regional power pool. FISCAL IMPACT: None at this time. However if the efforts of this action are successful in providing the electr supplies of the region’s agencies, a net savings of up to several million dollars in annua rates may be achieved. 1. Letter to SANDAG dated September 2, 1997 2. Letter from SANDAG, with attachments, dated August 7, 1997. 0 ZJf e32 a. i3 2 .. z 0 F= 0 < =! 0 z 3 0 0 EXHIBIT 1 0 - E!!- September 2, 1997 Mr. Kenneth E. Sulzer Executive Director San Diego Association of Governments 401 B Street, Suite 800 San Diego, CA 92101-4231 Dear Mr. Sulzer: The City of Carlsbad is a member of the San Diego Association of Governments' (SANDAG) electric restructuring working group which is evaluating alternative electric power supply options. The City of Carlsbad expresses its strong interest in the SANDAG regional power pool option and wishes to continue with the next steps of this project. As part of the next step, SANDAG is authorized to include the City of Carlsbads electrical load and billing data in the Request for Qualifications and Request for Proposals to potential competitive bidders for power supplies and other energy services. The City of Carlsbad will participate in the SANDAG regional power pool, given that additional competitive benefits for its agency can be achieved. We look forward to continued progress towards establishing a successful regional power pool. Sincerely, f CLAUDE A. (BUD) LEWIS Mayor jch:pgk . ._____.- ----- -~~ ._-.__. .._. . ._.__ ~_-_~.~- _.._-... -... . .._________ ~~~~~~.~ __..... ~_~~~-~___ __._ ~- . . . 1200 Carlsbad Village Drive - Carlsbad, California 92008-1 989 - (61 9) 434-2830 tXHlBl 0 e San Diego ASSOCIATION 0 GOVERNMENTS August 7,1997 Hon. Bud Lewis Mayor City of Carlsbad 1200 Carlsbad Village Drive 401 B Street, Suite 800 San Diego, California 92101-42 (619) 595-5300 Fax (619) 59 httpsllwww sandag cog ca us Cmlsbad, CA 92008-1989 Dear Mayor Lewis: At its July 25,1997 meeting, the San Diego Association of Governments (SANDAG) acted to request all interes public agencies in the region to include their electric loads in a solicitation for bids for electric supply and rela services. This letter makes that request for your agency’s participation. A copy of the report on this iten: enclosed for your information. Your agency is a member of the electric restructuring working group. The working group is made up of 110 pul agencies in the region that have expressed interest in evaluating the potential for reducing electric costs by join together to purchase electricity. A potential for cost savings for the public agencies exists through implementation of a regional power pool. The next step is the actual solicitation of bids for power. If the bids sh sufficient cost savings, your agency will be able to decide whether to join the regional power pool. If the bids power pool can be created. In order to accomplish this next step, a written response to participate in the bid solicitation and the use of y electric load and billing information obtained fi-om San Diego Gas & Electric in the solicitation is being requesi A sample response letter is attached. SNAG will issue a request for quapifications to prospective suppliers and then request proposals fi-om a selec group of suppliers. SANDAG will negotiate with selected electric service suppliers and prepare power purch agreements. These purchase agreements, which will include prices for electric services, will be presented to y agency for approval and final commitment for membership in the purchasing pool. We would appreciate receiving your response by September 11, 1997. Please call me or have your st& con1 Mike McLaughlin at 595-5373 or Marc Morley at 595-5316 if you have questions or comments, or need assista in responding. competitive, positive responses will be received from a sigmficant number of working group members, and a via *J@h? Executive Director KS/MM/mc Enclosure cc: Raymond Patchett, City Manager Councilmember Ramona Finnila Jim Hagaman MEMBER AGENCIES Cities of Carlsbad, Chula Vista, Coronado, Del Mar, El Cajon, Encinitas, Escondido, Imperial Beach, La Mesa, Lemor National City, Oceanside, Poway, San Diego, San Marcos. Santee, Solana Beach, Vista, and County of San Diego ADVlSORYlLlAlSON MEMBERS. California Department of Transportation, U S Department of Defense, S D Unified Port District, S D County Water Authority, and TijuandBaja California. @an Diego Association of Governmen b BOARD OF DIRECTORS July2.5, 1997 AGENDA REPORT No.: Action Requested: APPROVE SAN DEGO REGION POWER POOL RECOMMENDATION BY THE AD HOC COMMITTEE ON ELECTRIC UTILITY RESTRUCTURING Introduction SANDAG’s Ad Hoc Cormittee on Electric Utility Restructuring has completed its review of power pooling alternatives for the San Diego region. The Committee members are: 0 0 0 0 0 This work has been carried out with the participation and assistance of a working group of 110 public agencies in the region. These agencies have indicated an interest in evaluating the potential for saving money by joining together to purchase electricity. The agencies represented on the Working Group are shown in Attachment A. The Ad Hoc Committee was created by SANDAG to help the region’s public agencies evaluate and take advantage of potential benefits from the restructuring of California’s electric industry, scheduled to start January 1998. At its July 11, 1997 meeting, the Ad Hoc Committee recommended that SANDAG should request all interested public agencies in the region to include their electric loads in a solicitation for bids for power and related services. The Committee also recommended that SANDAG serve as the administering agent for the bid process, and for the power pool if review of the bids by the participating agencies indicates that pooling will result in electricity cost savings. Based on the Ad Hoc Committee’s action, it is my RECOMMENDATION Mayor Dick Lyon, City of Oceanside, Chair Councilmember Ramona Finnila, City of Carlsbad Councilmember Darrell Gentry, City of San Marcos Mayor Pro Tem Richard Ramos, City of El Cajon Supervisor Pam Slater, County of San Diego 0 0 that SANDAG: 1. Request all in(erested public agencies in the region to include their electric loads in 2 solicitation for bids for power and related services; 2. Administer the solicitation process including Request for QualificationsRequest for Proposals and negotiations, and present the results to the participating agencies for review; Direct staff to develop an administrative and decision making structure within SANDAG to administer a regional power pool, based on the principles and requirements listed in Attachment B, for Board consideration in September; and Approve Resolution 98-7, amending the Fiscal Year 1998 Program Budget to provide UP to $50,000 for consultant assistance in negotiating with bidders responding to the power pool solicitation and in developing the structure for administering the pool, and authorizing the Executive Director to contract with consultants to carry out this work. 3. 4. Discussion Conclusions to Date: The July 11,1997 joint meeting of the Ad Hoc Committee and the Working Group was attended by 50 people representing agencies participating in SANDAG’s evaluation of the options for and costs and benefits of power pooling for the region. The group reviewed an analysis of the electric loads of various types of public agencies in the Working Group (e.g., cities and county, transportation agencies, water districts, schools) and how they might be combined to create a power pool that could attract bids for low cost power. The conclusion of the analysis was that a San Diego region power pool, including all of the interested public agencies in the Working Group, would constitute a desirable group for attracting competitive bids for power and related services. Such a group should be able to provide attractive electric load size and shape and be more effective than individual entities pursuing direct access individually or in smaller subgroups. Given the experience of other developing power pools in the state, there is the potential to create net savings of up to several percent on electricity costs. A San Diego Region Power Pool could include between $100 million and $400 million in annual utility bills, with net saving potential of up to sevcral million dollars. Next Steps: If SANDAG approves the Ad Hoc Committee’s Recommendation the following steps will be 4 carried out over the next several months: 2 0 0 1. Determine the agencies r'nat want to be included in a solicitation for power and related services and identify their electricity loads. Solicit bids and negotiate prices for power and related services for the prospective pool participants. Develop an administrative and decision making structure within SANDAG to administer a regional power pool on behalf of the interested public agencies. Present the negotiated prices and program for administering the pool to the prospective pool members, the Ad Hoc Committee, and SANDAG, for their consideration. Implement the power pool in early 1998 if sufficient interest and support is expressed. 2. 3. 4. 5. Power Pool Development Costs: It is anticipated that up to $50,OOQ in additional consultant assistance will be required to complete the 4 tasks described above leading up to the decision to implement a regional power pool. The costs relate to technical assistance in negotiating with power suppliers and legal assistance in deveIoping the administrative structure for the pool. These development costs can be recovered if a regional power pool is implemented. Executive Director Attachments Key Staff Contact: Steve Sachs, 595-5346; e-mail: ssa@sandag.cog.ca.us Funds are Budgeted in Overall Work Program #105.06 3 a a ASSOCLATION San Diego OF RESOLrn( NO. 98-7 GOVERNMENTS 401 B Street, Suite 800 San Diego, California 921 01 (619) 595-5300 Fax (619) 595-5305 http IJwww sandag cog ca us 43 AMENDING THE FISCAL YEAR 1998 PROGRAM BUDGET AND AUTHORIZING THE EXECUTIVE DIRECTOR TO CONTRACT WITH CONSULTANTS FOR UP TO $SO,OOO TO ASSIST SANDAG IN NEGOTIATING BIDS FOR POWER AND IN DEVELOPING AN ADMINISTRATNE STRUCTURE FOR A SAN DIEGO REGIONAL POWER POOL. WHEREAS, SANDAG Overall Work Program Work Element #105.06 has the purpose oi assisting public agencies in decisions on purchasing pooled power; and WHEREAS, SANDAG’s Ad Hoc Committee on Electric Utility Restructuring has recommended that SANDAG administer a solicitation of bids for power and related services on behalf of interested public agencies, and that SANDAG serve as the administering agent for a regional power pool, if one is formed; and WHEREAS, up to $80,000 of consultant assistance will be needed to assist SANDAG in carrying out the work recommended by the Ad Hoc Committee; NOW THEREFORE BE IT RESOLVED by the Board of Directors of the San Diego Association of Governments that the Fiscal Year 1998 Overall Work Program be amended by increasing Work Element #lo505 by $80,000, and transferring $8O,OOO from Work Elements in the Regional Growth and Environmental Management Planning Area for the purposes of assisting SANDAG in negotiating bids for power and in developing an administrative structure for a regional power pool; and BE IT FURTHER RESOLVED that the Executive Director is hereby authorized to contract with consultants in amounts not to exceed a total of $80,000 to provide this assistance. PASSED AND ADOPTED this 25th day of July, 1997. ATTEST CHAIRPERSON SECRETARY Nattonal CW, Oceanside, Poway, San Diego, San Marcos, Santee, Solana Beach, Vtsta, and County of San Diego. ADVlSORYlLlAlSON MEMBERS California Department of Transportation, U S Department of Defense, S D. Unified Port District, MEMBER AGENCIES Cities of Carlsbad. Chula Vista, Coronado, Del Mar, El Cajon, Enctnitas, Escondido, Imperial Beach, La Mesa, Lemon Gr S+D, County Water Authonty, and TijuanalBaja California. n1 lnLn 0 71 Working Group Participants Local Government School Districfs City of Carlsbad City of Chula Vista City of Coronado City of Del Mar City of El Cajon City of Encinitas City of Escondido City of Imperial Beach City of La Mesa City of Lemon Grove City of National City City of Oceanside City of San Diego City of San Marcos City of Santee Grossmont UHSD City of Solana Beach City of Vista County of San Diego Water & Sewer Districts County Water Au.Jlori:y* Descanso Water District Encina Wastewater Authority Oceanside USD Fallbrook Public Utility District Helix Water District Leucadia Water District Padre Dam Municipal Water District Rainbow Municipal Water District Ramona Municipal Water District San Dieguito Imgation District San Elijo Joint Powers Authority Sweetwater Authority Tia Juana Valley County Water District Valley Center Municipal Water District Vista Imgation District Yuima Municipal Water District Alpine Union School District Bonsall Union School District Borrego Springs Unified School District Cajon Valley School District Cardiff School District Carlsbad Unified School District Chula Vista Elementary School District Coronado Unified School District Dehesa School District Del Mar Union School District Encinitas Union School District Escondido Union High School District Fallbrook High School District Fallbrook Union Elementary School District Jamul-Dulzura USD Julian Union School District Julian High School District La Mesa-Spring Valley School District Lakeside Union School District Lemon Grove School District Mountain Empire Unified School District National School District Pauma School District Poway Unifed School District Ramona Unified School District Santee School District San Diego City School District Fan Diego County Office of Education San Dieguito Union High School District San Marcos Unified San Pasqual Union School District San Ysidro School District Solana Beach School District South Bay Union School District Spencer Valley School District Vallecitos School District Valley Center School Distict Vista Unifed School District Warner Unified School District City of Poway Escondido Union School District Otay Municipal Water District Rancho Santa Fe School District (0 VER) 'Representing all of the region's County Water Authority Member agencies e 7 Colleges and Universities Transportation Grossmont-Cuyamaca Community Colleges CALTRANS Mira Costa College MTDB Palomar College NCTD San Diego State University Southwestern College University of California, San Diego Fire Districts Alpine Fire Protection District Bonita Fire Department Borrego Springs Fire Protection District East County Fire Protection District Lakeside Fire Protection District North County Dispatch PA Rancho Santa Fe Fire Department Rural Fire Protection District San Miguel Fire Protection District Vista Fire Protection District San Diego Transit Corporation Other Department of the Navy Port of San Diego ATTACHh 0 0 PRINCIPLES AND REQUIREMENTS FOR ADMINISTERING A PUBLIC AGENCY POWER POOL IN THE SAN DIEGO REGION General 0 No new bureaucracy should be created, a power pool should be located in an existing organization. The organization should have the ability to create a decision making structure which includes all of the agencies involved in the power pool. 0 Administrative 0 The organization should have the capability to staff and administer the power purchase decision process, and manage (through consultant services) the technical and financial aspects of power purchases and related services. The organization should minimize administrative effort and cost. 0 The organization should maintain flexibility and minimize long term financial commitments by using consultant assistance where feasible and cost effective, instead of increasing staff. Legal All participant members must be protected against financial liabilities of other members. All participants should be protected against all potential liabilities that could arise as a result of actions by the electricity supply and service providers. Contractual Contracts with electricity supply and service providers should require the demonstration of technical and financial capabilities that will assure reliable, high quality performance. Contracts with electricity supply and service providers should include provisions to ensure that all products and services are cost-competitive with available alternatives. September 2, 1997 Mr. Kenneth E. Sulzer Executive Director San Diego Association of Governments 401 B Street, Suite 800 San Diego, CA 92101-4231 &! Dear Mr. ulzer: The City of Carlsbad is a member of the San Diego Association of Governments' (SANDAG) electric restructuring working group which is evaluating alternative electric power supply options. The City of Carlsbad expresses its strong interest in the SANDAG regional power pool option and wishes to continue with the next steps of this project. As part of the next step, SANDAG is authorized to include the City of Carlsbad's electrical load and billing data in the Request for Qualifications and Request for Proposals to potential competitive bidders for power supplies and other energy services. The City of Carlsbad will consider participation in the SANDAG regional power pool, given that adhtional competitive benefits for its agency can be achieved. We look forward to continued progress towards establishing a successful regional power pool. S Mayor jch:pgk 1200 Carlsbad Village Drive - Carlsbad, California 92008-1 989 Q (61 9) 434-283C