Title
Contract for Liquefied Natural Gas (LNG) - IFB PTD18-004 (Ordinance S-44402)
Description
Request to authorize the City Manager, or his designee, to enter into a contract with Clean Energy Fuels for the provision of liquefied natural gas (LNG) to the Public Transit Department. Further request authorization for the City Controller to disburse funds in an amount not to exceed $37,224,852.
Report
Summary
The Contractor will supply LNG to the Public Transit Department's three fueling facilities: North Transit Facility, South Transit Facility and West Transit Facility. The Department currently operates a heavy duty transit fleet consisting of 490 buses. Of that amount, 330 are fueled by LNG or liquefied compressed natural gas (LCNG). As part of the Department's long-term planning, the fueling of natural gas vehicles continues to transition from the use of LNG to LCNG at the Department's three service garages. The Department has a contingent of LNG vehicles which will require being fueled for the remainder of their programmed life.
Procurement Information
IFB PTD18-004 was conducted in accordance with City of Phoenix Administrative Regulation 3.10. On Feb. 2, 2018, one bid was received from Clean Energy Fuels:
Fixed Cost per Gallon: $0.148
Transportation Cost: $1,330.00
The contract includes three cost elements:
- A fixed cost for the manufacturing/liquefaction/profit of producing LNG.
- A fixed cost for the transport (per load) of LNG to Department facilities.
- The So Cal Gas index (average natural gas price per MMBtu for the Southern California Gas Company) for the month during which the LNG is delivered to a Department storage facility.
Based on confirmation with Clean Energy references, review of market conditions and comparison with the current contract, the pricing has been determined to be fair and reasonable and Clean Energy's bid is determined to be responsive and responsible.
Contract Term
The contract term shall begin on or about July 1, 2018 and end on June 30, 2021. Provisions of the agreement include options to extend the contract up to two additional years in increments of up to one year, which may be exercised by the Public Transit Director if it is in the City's best interest to do so.
Financial Impact
The aggregate contract value if the City exercises all options shall not exceed $37,224,852. Funds are available in the Transportation 2050 fund.
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Public Transit Department.