===== PDF PAGE 72 ===== [Extraction: embedded PDF text] CITY OF WEST CHICAGO INFRASTRUCTURE COMMITTEE AGENDA ITEM SUMMARY ITEM TITLE: AGENDA ITEM NUMBER: _4____,__~_·J=--- Resolution No. 25-R-0011 - Authorizing the City COMMITTEE AGENDA DATE: Feb 6, 2025Administrator to Enter into a Contract for the Supply of COUNCIL AGENDA DATE: Feb 17, 2025 Electricity for the City's Water Treatment Plant, all Well Stations, and all Sanitary Lift Stations STAFF REVIEW: Mehul T. Patel, P.E., Director of Public Works SIGNATURE. _________ _ APPROVED BY CITY ADMINISTRATOR: Michael L. Guttman SIGNATURE. _________ _ ITEM SUMMARY: Since January 2007, because of the electric utility deregulation law passed by the State of Illinois in 1997, the City of West Chicago has contracted for the supply of electricity from a third-party supplier for electric to be supplied to the City's Water Treatment Plant, all Well Stations, and all Sanitary Lift Stations. The distribution of electricity continues to be provided by ComEd. Working with David Hoover, who formed a collaborative known as NIMEC that represents multiple municipalities; alternative pricing is obtained via competitive bid from three third party electric suppliers. In the past, the competitive bids were then compared with ComEd's rates to determine which pricing yields the most significant savings for the City. Now, however, ComEd no longer offers fixed rates for medium and large accounts like ours. Therefore, the City is forced to seek competitive bids or pay ComEd's floating rate, which is not recommended, as the floating rates are inflated and change hourly. As a result of NIMEC's services: • In October 2006, the City executed a 17 month contract (January 2007 to May 2008) with Constellation NewEnergy. • In 2008, the City executed a three-year contract (June 2008 to May 2012) with Exelon Energy Company for a rate that varied between 0.0679 and 0.0864 $/kWh. • In 2012, the City executed a three-year contract (June 2012 to May 2015) with Exelon Energy Company for 0.04374 $/kWh. • In 2015, the City executed a two-year contract (June 2015 to May 2017) with Dynegy Energy Services, LLC for 0.05244 $/kWh. • In 2017, the City executed a three-year contract (June 2017 to May 2020) with Dynegy Energy Services, LLC 0.04834 $/kWh. • In 2020, the City executed a three-year contract (June 2020 to May 2023) with Constellation Energy Services, LLC 0.048 $/kWh. • In 2022, the City executed a two-year contract (June 2022 to May 2025) with Dynegy Energy Services, LLC 0.05809 $/kWh. The existing contract will expires on May 31, 2025. Again, NIMEC represents the interest of several municipalities and seeking alternative pricing from three third party electric suppliers. As electricity is now a commodity that is market driven, it can change from day to day and hour to hour. Therefore, once the competitive bid prices are received, the City will need to make an immediate decision and enter into an agreement with the lowest cost supplier on the day of the ===== PDF PAGE 73 ===== [Extraction: embedded PDF text] CITY OF WEST CHICAGO bid. What this means is that the City Council, like it did on the previous occasions, would need to authorize the City Administrator to sign a contract with the lowest cost supplier. The Infrastructure Committee would then subsequently review, and the City Council would then have to formally approve the low bid award afterwards (similar to an emergency purchase). In addition, this pricing would just be for electricity for the Water Treatment Plant, all Well Stations, and all Sanitary Lift Stations. JACOBS is now responsible for electric service at the West Chicago/Winfield Regional Wastewater Treatment Plant; however, it has also participated in the NIMEC bidding process. NIMEC has indicated that they will seek bids on Tuesday, March 4, 2025, as current market conditions are trending choppy. NIMEC will seek and receive bids from pre-qualified suppliers (i.e., Dynegy, Constellation, AEP and MC Squared); typically, one for twelve months, one for twenty-four months, and one for thirty-six months. The City will then be able to choose the best deal. ACTIONS PROPOSED: Approve Resolution No. 25-R-0011 authorizing the City Administrator to Enter into a Contract for the Supply of Electricity for the City's Water Treatment Plant, all Well Stations, and all Sanitary Lift Stations COMMITTEE RECOMMENDATION: ===== PDF PAGE 74 ===== [Extraction: embedded PDF text] RESOLUTION NO. 25-R-0011 A RESOLUTION AUTHORIZING THE PARTICIPATION IN THE NORTHERN ILLINOIS MUNICPAL ELECTRIC COLLABORATIVE (NIMEC) AND AUTHORIZING THE CITY ADMINISTRATOR TO APPROVE A CONTRACT WITH THE LOWEST COST ELECTRICITY PROVIDER FOR THE SUPPLY OF ELECTRICITY FOR THE CITY'S WATER TREATMENT PLANT, ALL WELL STATIONS, AND ALL SANITARY LIFT STATIONS WHEREAS the City of West Chicago ("The City") is a municipality in accordance with the Constitution of the State of Illinois of 1970; and, WHEREAS, on January 2, 2007, the State of Illinois implemented a plan to deregulate Commonwealth Edison; and, WHEREAS, as a result of this deregulation, electricity may be purchased based on market price and Commonwealth Edison will no longer be the sole supplier of electricity in Northern Illinois, resulting in new electricity suppliers being able to compete against Commonwealth Edison, and competitive market forces dictating the price of electricity; and, WHEREAS, the City of West Chicago has selected the Northern Illinois Municipal Electric Collaborative (NIMEC) to serve as the City's broker relative to the acquisition of electrical energy for City facilities, due to NIMEC's municipal experience and the fact that NIMEC is the largest municipal Collaborative in northern Illinois which will be aggregating the energy needs of 150 government members of the Collaborative in order to secure more competitive pricing based in higher volumes than can be provided individually to a single municipality; and, WHEREAS, there is no cost to join NIMEC, with the amount of compensation that NIMEC receives, if the City chooses the NIMEC electricity supplier, being built into the prices bid by the electricity, so there will be no direct payment made to NIMEC by the City; and, WHEREAS the City has been working with NIMEC since 2008, and the City has enjoyed a good working relationship with NIMEC; and WHEREAS, Commonwealth Edison will no longer offer a fixed energy rate for large or medium sized commercial accounts and would instead charge based on a floating hourly rate and the City desires to enter the market to secure a fixed rate, up to 36 months in term. Resolution 25-R-0011 Page 1 of2 ===== PDF PAGE 75 ===== [Extraction: embedded PDF text] NOW, THEREFORE, BE IT RESOLVED BY THE PRESIDENT AND BOARD OF TRUSTEES FOR THE CITY OF WEST CHICAGO, DUPAGE COUNTY, ILLINOIS, AS FOLLOWS: Section 1. That NIMEC is hereby appointed as the City's broker for purposes of obtaining a supply of electricity for the City's needs, and the City Administrator is hereby directed to take all actions necessary to establish said broker relationship. Section 2. That NIMEC, as broker for the City, is authorized to discuss and negotiate energy rates directly with suppliers in an effort to secure the lowest energy cost for the City of West Chicago. Section 3. That in light of the time constraints applicable to the acceptance of a competitive bid for a supply of electricity, once the bids are received by NIMEC, the City Administrator is hereby authorized to sign the contract with the lowest bidder. Section 4. That, if the criterion in Section 3 is met, the City Administrator shall place said contract on the Consent Agenda at the first available Infrastructure Committee and subsequent City Council meeting following his execution of the documents, so that the City Council can then officially approve the contract. Section 5: The Resolution shall be in full force and effect from and after its passage, approval, and publication in pamphlet form, as provided by law. APPROVED this 17th day of February 2025. AYES: NAYES: ABSTAIN: ABSENT: Mayor Ruben Pineda ATTEST: Executive Office Manager, Valeria Perez Resolution 25-R-0011 Page 2 of2