Title
Authorization to Issue Request for Pricing and Contract with Energy Firms
Description
Request to authorize the City Manager, or his designee, to enter into a contract, or contracts, to procure electricity through qualified energy firm(s). This action is required to facilitate City of Phoenix participation in an energy program that allows large customers of regulated utilities to enter into the electric generation market and arrange for an alternative source of generation. There will be no cost to the City for these third party energy contracts, but the City will be able to procure electricity from APS at reduced rates because of the contracts.
Report
Summary
The Aviation Department has over 190 active electric accounts consuming more than 150 million kWh of power and expending more than $14 million annually for energy, which is provided by Arizona Public Service (APS). As part of an APS rate case settlement in August 2017, large customers can qualify for an energy program called Schedule AG-X: Buy-through Generation. As one of APS's largest customers, the Aviation Department was selected by lottery to take advantage of the opportunity offered by this rate settlement to procure electricity from qualified third party energy firms.
The Aviation Department will use an energy consultant under an existing contract to obtain price quotes from qualified firms using an industry standard competitive process. The Department will contract with the firm(s) that provides the best value to the City. The contracts with the third party energy firm(s) are required by APS as part of the program. The City will make no payments to the contracted energy firms. The Aviation Department will still pay APS for the electricity, but at reduced rates based on the contract rates for the alternative generation sources.
These activities will allow the City to test and identify opportunities to reduce energy expenses. Anticipated energy cost savings can range between five percent and 20 percent annually.
Contract Term
The contract term will last for the period that the energy program with APS is in effect, estimated to be approximately five years.
Location
Phoenix Sky Harbor International Airport, 3400 E. Sky Harbor Blvd.
Council District: 8
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Aviation Department.