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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 06/02/2009 - RESOLUTION 2009-054 APPROVING AN EXEMPTION TO THE ITEM NUMBER: 25 AGENDA ITEM SUMMARY DATE: June 2, 2009 FORT COLLINS CITY COUNCIL STAFF: Jim O'Neill Patty Bigner SUBJECT Resolution 2009-054 Approving an Exemption to the Use of a Competitive Process for a Contract with Positive Energy for a Community Benchmarking Program to Reduce Energy Use. RECOMMENDATION Staff recommends adoption of the Resolution. FINANCIAL IMPACT This request is for an exception to the competitive process over $200,000 and requires Council approval. The City of Fort Collins Utilities requested purchase of a community benchmarking program for the purpose of reducing energy use. EXECUTIVE SUMMARY This program will be purchased directly from Positive Energy for a first year cost of$310,000. The program utilizes targeted, integrated communications with advanced software analytics and behavioral science principles to inform customers about their usage and motivate them to conserve. The money for the purchase of this program is budgeted and available in the Energy Efficiency budget of the Light and Power Fund. BACKGROUND The 2009 Energy Policy, adopted by City Council on January 6, 2009, provides strategic planning guidance for Fort Collins Utilities' Light and Power Service Unit, the Energy Services group and the entire City Government on electric system reliability,reduction of carbon emissions,renewable energy and the ongoing relationship with Platte River Power Authority. The second goal area outlines direction related to the reduction of carbon emissions related to energy use. The policy establishes a specific energy reduction goal: Achieve annual energy efficiency and conservation program savings of at least 1.5%of annual energy use (based on a three year average history). Staff researched the existing marketplace for similar energy efficiency programs and interviewed Utilities staff members currently using the program. Although several companies are exploring development of similar programs or were interested in developing a pilot program with the City, staff was unable to find an established program offered by other industry vendors. Some of the June 2, 2009 -2- Item No. 25 unique technical qualifications of the program include proprietary software that generates individualized reports,integration and data warehousing software,and capacity for data-mining and data collection used for analyzing historical energy use patterns. Current utility customers include Southern California Edison, Puget Sound Energy, Sacramento Municipal Utility District, Sempra and Commonwealth Edison. Conversations with staff from several of these utilities resulted in favorable recommendations and expressed overall satisfaction with both Positive Energy staff and program results. TRIPLE BOTTOM LINE FOR THE POSITIVE ENERGY PROGRAM Social Impact Fort Collins Utilities will be purchasing the Positive Energy community benchmarking program as an energy efficiency and conservation strategy. Positive Energy Home Energy Reporting System offers a new, innovative approach to informing customers and motivating behavior changes that result in reduced electricity use. A "benchmark" group of 25,000 households will receive home energy reports on an average of 6 times per year. 150,000 fully personalized reports will be delivered as part of this program. This group will also have free online access to the program's Energy Insider website,where customers can get more information on energy programs and tips and share information about what their efficient neighbors are doing to reduce consumption. This website can also act as customer education tool for community action and events. Energy reduction of the benchmark group will be measured against a control group of homes that are not receiving the reports. In addition to energy reduction due to behavioral changes(conserving energy),the program's home energy reports and online tools are expected to help improve Demand Side Management program participation. One of the key program elements provided by Positive Energy is a robust measurement and verification process that will provide a set of detailed program reports which will document the savings and effectiveness of the program. Energy reduction of the benchmark group will be measured against the control group. Financial Impact This program will be purchased directly from Positive Energy for a first year cost of$310,000. Program expense for the first year includes a one-time setup cost and expense for subsequent years will be approximately$252,000.Through an Intergovernmental Agreement with Platte River Power Authority,the cost of conserved energy(CCE)will be offset at$.02/kWh or approximately$90,000 by Platte River Demand-Side Management funding. Environmental Impact Anticipated energy savings from the program are estimated to be 4,500 MWh and 3,640 tons of carbon dioxide avoided annually.In addition to energy savings from behavioral changes,additional energy savings may result through suggestions for additional efficiency measures in each of the customized energy reports. For example,in addition to turning the thermostat down in cold weather and up in the warm weather, the report may suggest a programmable thermostat or air conditioner tune-up. RESOLUTION 2009-054 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROVING AN EXEMPTION TO THE USE OF A COMPETITIVE PROCESS FOR A CONTRACT WITH POSITIVE ENERGY FOR A COMMUNITY BENCHMARKING PROGRAM TO REDUCE ENERGY USE WHEREAS, the City's 2009 Energy Policy establishes specific energy reduction goals including annual energy efficiency and conservation program savings of a least 1.5% of annual energy use; and WHEREAS, the City of Fort Collins Utilities seeks to purchase a community benchmarking program for the purpose of reducing energy use; and WHEREAS, the Positive Energy Home Energy Reporting System (the "Program") offers a new, proven and innovative approach to informing customers and motivating behavior changes; and WHEREAS, other utilities have used the Program and favorably recommended it; and WHEREAS, staff researched other programs and while other companies are exploring development of this type of program, this is the only known established program with documented results; and WHEREAS, the Program includes proprietary software that generates individualized reports and provides for data-mining and data collection to allow for analyzing historical energy use patterns; and WHEREAS, Article IV, Section 8-161(d)(1)b. of the City Code authorizes the Purchasing Agent to contract for material or services where, although there exists more than one responsible source, a competitive process cannot reasonably be used or, if used, will result in a substantially higher cost to the City, will otherwise injure the City's financial interests or will substantially impede the City's administrative functions or the delivery of services to the public; and WHEREAS, the Purchasing Agent has determined that although there exists more than one responsible source, a competitive process cannot reasonably be used or, if used, will result in a substantially higher cost to the City, will otherwise injure the City's financial interests or will substantially impede the City's administrative functions or the delivery of services to the public; and WHEREAS, the Purchasing Agent has submitted the requisite justification for said determination to the City Manager for approval; and WHEREAS, the City Manager has reviewed and approved the justification for this procurement; and WHEREAS, Section 8-161(d)(3) requires the City Manager submit all procurements over Two Hundred Thousand Dollars ($200,000) to the City Council in an open meeting for final approval. NOW THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that the Purchasing Agent is hereby authorized to contract with Positive Energy for a community benchmarking program for the purpose of reducing energy use in the amount of $310,000 for the first year. Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 2nd day of June A.D. 2009. Mayor ATTEST: City Clerk