CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Approve the award of the second two-year extension to Contract 14-174, Natural Gas Broker, to Center Point Energy Services for an amount not to exceed $486,026
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DEPARTMENT: Department of Public Works
SUBMITTED BY: Richard Dublinski, Director
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
The Department of Public Works (DPW) assists in coordinating the purchase and delivery of utility natural gas to select City facilities. Contract 14-174, Natural Gas Broker, was awarded by the City Council on May 6, 2014 for a two-year term, with two, two-year options to extend. The awarded vendor, Center Point Energy Services, provides gas requirements and gas contract administration to the City for select sites. Specifically, Center Point Energy is responsible for buying, scheduling and transporting the natural gas to the City of Naperville.
Sites that are included with this contract are chosen based on gas usage. Utility regulations establish tariffs for different size users. Users are defined by the meter location with each building considered an individual user. The buildings not included in this award are either too small and fall under the residential tariff, or in the case of some of our largest non-utility fund buildings, receive free natural gas under the City's ranchise agreement with Nicor.
Center Point provides a "Build and Drain" program for securing natural gas for the City. The Build and Drain program purchases pre-determined amounts of incremental gas in non-winter months to be injected into storage for use when gas often costs less than in winter months (dollar cost averaging). This strategy is used to offset volatility during the winter months and take advantage of the historically lower prices in the summer/early fall months.
DISCUSSION:
Center Point Energy has performed well during the initial contract term and first two-year extension. Since natural gas prices have stabilized, and staff was...
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