HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 12/04/2007 - RESOLUTION 2007-105 APPROVING THE PURCHASE OF DIGI ITEM NUMBER: 16
AGENDA ITEM SUMMARY DATE: December4, 2007
FORT COLLINS CITY COUNCIL STAFF: Jim O'Neill
Kraig Bader
Gary Schroeder
Patty Bigner
SUBJECT
Resolution 2007-105 Approving the Purchase of Digital Control Units for Residential Air
Conditioning Electrical Load Control as an Exemption to the Competitive Process.
RECOMMENDATION
Staff recommends adoption of the Resolution to assure that Utilities can continue progress towards
meeting the requirements of the Fort Collins Utilities Energy Supply Policy.
FINANCIAL IMPACT
Utilities would like to purchase 1,000 digital control units used in an electric load control program
for a total purchase price of $106,250. Comverge, Inc. is offering a $9.00/unit discount for
committing to a purchase of 1,000 units. By agreeing to purchase 1,000 units from Comverge,
Utilities is receiving a discount that will save$9,000 over the cost if staff continued with the normal
purchase quantities.
To meet the financial and technical needs of the demand side management program,we must sole-
source Comverge as the manufacturer of the DCUs (Digital Control Units) for the "Hot Shot" air
conditioning program. There are other load control companies, each with their own proprietary
systems, but none of them are compatible with the City's existing system. To implement another
system would be exceedingly expensive as it would necessitate the removal of the transmitting and
control infrastructure as well as the removal and replacement of the installed base of 2000 DCUs
that currently control electric water heaters.
Because the Hot Shot program offers a means to reducing electric demand during times of peak
energy use, the program helps reduce coincident peak purchase power costs, the savings of which
are passed on to rate payers.
EXECUTIVE SUMMARY
In 1982, Utilities Light and Power began offering customers with electric water heaters a way to
reduce their contribution to the distribution system electric demand during system peak usage times.
Light and Power selected a system from Scientific Atlanta, Inc as the best option for needs at that
time and dubbed the program Hot Shot. Today, Fort Collins Utilities has about 2,000 customers
December 4, 2007 -2- Item No. 16
who have a Hot Shot Digital Control Unit(DCU) on their electric water heaters. The original Hot
Shot load control devices operate on a proprietary communications protocol that assured accurate
communications and avoided false operations from other radio frequency signals that could reach
the customer premises. The technology developed and sold by Scientific Atlanta has since become
the property of Comverge,Inc,and it continues to support the City's existing installed base of water
heater DCUs.
As residential air conditioning (AC) market saturation in Northern Colorado grew from less than
10% in the early 1980's to today's number of nearly 70%, according to Platte River Power
Authority, summer peak electric demand has steadily increased with residential AC purchases.
While population has increased about 60%in the last 10 years, electric peak demand has increased
over 100%, largely as a result of air conditioning. In response to this trend, it is evident that
controlling summer-season electric loads is necessary to move toward the City's Electric Energy
Supply Policy goals.
In 2007, a Utilities team recommended expansion of the water heater program to include air
conditioning control. An air conditioning pilot study of 100 DCUs during the summer of 2007
proved the effectiveness of the air conditioning controllers as a method of reducing summer-season
peak demands. Staff plans to add 500 units per year for the next two years.
To implement an air conditioning load control program that also incorporates existing installed base
of water heater DCUs,it will be necessary to use the Comverge system.The air conditioning control
system will operate on the same Comverge control system as the Hot Shot water heater control
program. The backbone of the control system is the recently-upgraded LMS (Load Management
Software)program, which is a proprietary software program used to control the DCUs. Comverge
hardware also controls the transmitters in the electric substations, which send the signal to the
DCUs.
RESOLUTION 2007-105
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROVING THE PURCHASE OF DIGITAL CONTROL UNITS
FOR RESIDENTIAL AIR CONDITIONING ELECTRICAL LOAD CONTROL
AS AN EXEMPTION TO THE COMPETITIVE PROCESS
WHEREAS, the Fort Collins Utilities Electric Department is pursuing electric demand
reduction goals set forth in the Energy Supply Policy and has installed Digital Control Units
manufactured and supported by Comverge, Inc to implement demand-side load reduction at
residential water heaters; and
WHEREAS, the Fort Collins Utilities Electric Department plans to expand the demand-
side load reduction program to include residential air conditioning units as 25 years of
experience with the current load control technology suggests additional electrical savings would
result; and
WHEREAS, staff has determined that the existing communications infrastructure and
Digital Control Units already in service has substantial value and would be expensive to replace;
and
WHEREAS, staff has researched options available in the market and has found that no
other manufacturer makes or supports a system that could cost-effectively augment or replace
the current load control system to maintain existing functions and still integrate air conditioning
electric load reduction controls; and
WHEREAS, funds have been budgeted and approved in the Utility budget for 2007; and
WHEREAS, Section 8-161(d)(I)b of the Code of the City of Fort Collins authorizes the
Purchasing Agent to negotiate the purchase of supplies and services without utilizing a
competitive bidding process where the Purchasing Agent determines 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
interest, 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 the additional purchase of Digital
Control Units from Comverge, Inc. as an exemption to competitive bidding process is in the best
interests of the City due to the demonstrated effectiveness of the units already in service and the
additional cost of replacing the installed infrastructure; and
WHEREAS, the Purchasing Agent has submitted the requisite justification to the City
Manager for approval; and
WHEREAS, the City Manager has reviewed and concurred in that determination for this
acquisition; and
WHEREAS, Section 8-161(d)(3) required approval of this purchasing method by the City
Council for items costing more than One Hundred Thousand Dollars ($100,000) prior to
acquisition.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF
FORT COLLINS that the purchase of One Thousand (1,000) digital control units in the amount
of One Hundred Six Thousand Two Hundred Fifty Dollars ($106,250), as an exemption to the
City's competitive Purchasing requirements is hereby approved:
Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 4th
day of December, A.D. 2007.
Mayor
ATTEST:
City Clerk