City Hall has negotiated a “reduction in electricity rates” with a Canadian company, allowing Santa Monica to potentially save some money over the course of an 18-month contract that is now valued at about $3 million. The contract modification was approved Tuesday as part of the consent calendar.
The City will purchase renewable electricity through May 31, 2014 from Toronto-based company Commerce Energy.
In the final 12 months of the 18 months contract, Santa Monica will also purchase renewable electricity for all accounts affected by Senate Bill 695, or the Ratepayer Protection Act. That bill was implemented in 2010 and allowed for “direct access” electricity purchases.
“(City) Staff has negotiated a reduction in electricity rates for renewable electricity with the City’s current energy provider,” a report to council members said. “The City would pay $0.0602 per kilowatt hour for electric accounts switched to direct access in 2001 and contracted from October 1, 2012 through May 31, 2014, and $0.0661 per kilowatt hour for accounts switched to direct access under SB 695 on April 16, 2010 and currently contracted from June 1, 2013 through May 31, 2014.”
According to city staff, this contract modification would save Santa Monica about $300,000 during the course of the agreement “compared to the cost of purchasing electricity from Southern California Edison.”
The modification comes almost two years after Santa Monica and Commerce Energy entered into an agreement to purchase 100 percent “renewable energy in the form of renewable energy certificates (RECS) for City electrical accounts.”
At that time, the agreed to prices were “$0.0665 per kilowatt hour from October 1, 2010 through September 30, 2012, and $0.0700 per kilowatt hour for accounts switched under SB 695 effective June 1, 2011 through May 30, 2013”
“A direct access customer since 2001, the City pays Commerce Energy approximately $2 million per year for the electricity commodity and Southern California Edison approximately $2.5 million per year for transmission and distribution through the electric grid,” city staff said. “The City purchases a ‘bundled’ product of electricity and renewable energy certificates (RECs) that allows the City to achieve its 100 percent renewable energy goals.”
City staff added that as natural gas has become cheaper in the past year, so has the cost for electricity generation in California.
Accordingly, City Hall “was able to negotiate a lower rate for electricity with Commerce Energy than (Santa Monica) is paying on its current contract.”
Meanwhile, two other big-money items on the Oct. 2 Consent Calendar included an agreement for Workers’ Compensation medical bill review services and a construction contract for a wastewater main replacement project.
California-based InterMed Cost Containment Services was awarded a five-year, $750,000 contract to review “medical bills for medical care provided to injured City workers.”
According to city staff, the medical bill review process saved Santa Monica more than $3.3 million for Fiscal Year 2011-2012.
Meanwhile, California-based Mike Prlich and Sons was awarded a contract worth more than $1.6 million for the Wastewater Main Replacement Project to take place south of the Santa Monica Freeway (I-10).
“The Wastewater Main Replacement Project would replace approximately 5,000 linear feet of sewer pipeline at various locations throughout the City within six-month duration,” city staff said. “Pipelines identified for replacement or upgrades are based on factors such as age, condition, and capacity demands.”
There were as many as nine firms bidding on this project, with proposals ranging from $1.4 million to $2.2 million. Mike Prlich and Sons was selected because it similarly performed “various utility projects for the cities of Los Angeles, Long Beach, and Santa Monica,” city staff said.
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