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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />MARCH 21, 2017 <br />TITLE <br />PAYMENT AUTHORIZATION TO <br />PROCURE AMERICA FOR <br />ELECTRIC UTILITY COST <br />REDUCTION SERVICES <br />{STRATEGIC PLAN NO. 4,31)) <br />y� <br />CIT MANAGER <br />. f 0 • <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />❑ As Recommended <br />❑ As Amended <br />❑ Ordinance on I3' Reading <br />❑ Ordinance on 2nd Reading <br />❑ Implementing Resolution <br />❑ Set Public Hearing For <br />CONTINUED TO <br />FILE NUMBER <br />Authorize payment of Procure America Invoice in the amount of $74,839.81 as compensation for <br />generating electrical utility cost savings for various City departments. <br />DISCUSSION <br />On September 16, 2014, the City Council authorized staff to execute Agreement #A- 2014 -227 for <br />a three -year period with Procure America for utility cost reduction services. The agreement called <br />for Procure America to perform an operational review of the City's utility portfolio to identify cost <br />saving opportunities and implement an initiative to specifically reduce the City's natural gas and <br />electric utility bills. Since the initiative's implementation in June 2015, the City has generated a <br />total of $292,652.89 in electric bill savings to date for various City facilities (Exhibit 1). Procure <br />America's defined share of those savings is $160,027.49 which represents Procure America's <br />total compensation to date (Exhibit 2). <br />Procure America generates cost savings by identifying electric service accounts eligible for a rate <br />review and requesting Southern California Edison (SCE) to adjust rates as applicable. The cost <br />saving is the difference between the higher electric bill under the old rate and the lower electric <br />bill under the new rate. Based on an initial assessment, Procure America concluded that 120 <br />utility accounts required more in -depth analysis using detailed billing data from utility providers. <br />The operational review goals were to evaluate how much utility charges would cost under various <br />available rate schedules, assess whether billing errors had occurred, and identify cost - effective <br />alternatives to the existing metering and billing configurations. The operational review report <br />identified 43 electric accounts whose assigned rate schedules were suboptimal configurations <br />that resulted in billing overcharges. The report also recommended rate schedule changes, <br />explained the basis for each rate change, and estimated the amount of electric bill savings the <br />rate changes would generate. <br />29B -1 <br />