HomeMy WebLinkAboutFCS-10-009 - E10-101 - Cons Serv - Natural Gas SupplyREPORT TO:Committee of the Whole
DATE OF MEETING:
2010-12-20
SUBMITTED BY: Larry Gordon, Director of Supply Services, 2214
PREPARED BY:
Larry Gordon, Director of Supply Services, 2214
WARD(S) INVOLVED: All
DATE OF REPORT: 2010-12-10
REPORT NO.:
FCS-10-009
SUBJECT:
E10-101 - Consultant Services - Advisory Services for the
Procurement and Management of Natural Gas Supply
RECOMMENDATION:
That Expression of Interest E10-101, Consultant Services – Advisory Services for the
Procurement and Management of Natural Gas Supply, be awarded to ECNG Energy L.P.,
Chatham, Ontario at their estimated fee of $114,000., plus H.S.T. of $14,820., and Aegent
Energy Advisors Inc., Toronto, Ontario, at their estimated fee of $33,600., plus H.S.T. of
$4,368., for an annual combined total of $166,788., for a three (3) year term, based on a
satisfactory contract being negotiated and an upset fee being established, and further that the
Mayor and City Clerk be authorized to execute agreements satisfactory to the City Solicitor.
BACKGROUND:
The City of Kitchener, Utilities Division (Kitchener Utilities), offers its’ 60,000 customers the
choice of direct purchase for their natural gas volumes. Currently, approximately sixty (60)
contracts are administered under bundled transportation agreements between the customer or
Agent and the City of Kitchener. Kitchener Utilities manages all of the City’s gas purchase
arrangements under a Carriage Services (T-3) Contract with Union Gas.
Customers who have not chosen a direct purchase supplier buy “system” gas. Kitchener
Utilities provides a cost-based program to purchase system gas for its’ customers.
Kitchener Utilities requires the services of a Consultant(s) to assist with the administration of its’
storage and transportation contracts with Union Gas and provide advisory services related to
direct purchase options, transportation and asset optimization. Advisory services are required
regarding current and long term market trends, directpurchase issues and opportunities, gas
supply issues and transportation arrangements.
REPORT:
In accordance with Chapter 170 of the Municipal Code pertaining to the Selection of
Professional Services/Consultants, a Consultant’s Review Committee was established
consisting of J. Gruenbauer, Manager Regulatory Affairs and Supply, W. Malcolm, Director of
Utilities, L. Baillargeon, Manager Asset Optimization, D. Chapman, Deputy CAO Finance and
Corporate Services, and L. Gordon, Director of Supply Services.
Expressions of interest were advertised in The Record, on the City of Kitchener website and on
the internet through the Ontario Public Buyers Association Electronic Tendering Information
System relative to this project. Documents were downloaded by seventeen (17) interested
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parties, and by the closing date of Wednesday August 18, 2010, six (6) responses had been
received.
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The Review Committee met on Wednesday September 1, 2010 to review the submissions and
a shortlist of three candidates was selected for further interviews. The Committee met on
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Thursday September 30, 2010 to interview the shortlisted candidates. The Committee elected
to split the award of the project to ECNG Energy L.P. and Aegent Energy Advisors Inc.
A listing of the responding parties follows for your reference:
ECNG Energy L.P. Chatham ON
Aegent Energy Advisors Inc. Toronto ON
Energy Advantage Inc. Burlington ON
VIP Energy Services Inc. Waterloo ON
Comsatec Inc. Callander ON
Elenchus Toronto ON
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
Theme: Financial Management
Strategic Direction: Ensure responsible use of public funds within a supportive policy
framework.
The City of Kitchener’s purchasing policies and practices ensure openness, fairness and
transparency in the procurement of goods and services.
FINANCIAL IMPLICATIONS:
Funding will be provided from Account Numbers – 5018185 – Gas Delivery and 5018545 – Gas
Supply
Financial Report is attached.
* Balance of $20,000. will be retained for contingencies.
COMMUNITY ENGAGEMENT:
Not Applicable
ACKNOWLEDGED BY: Dan Chapman, Deputy CA0 & City Treasurer, Finance and Corporate
Services
E10-101 Professional Services Consultation - Natural Gas Advisory Services
2010
5018185 - Gas Delivery
5018545 - Gas Supply
Cost CentreTOTAL
Gas-DeliveryGas- Supply
Funding sources:
2011 Budget61,300 106,300
1 67,600
Projected Expenditures:
ECNG 62,70051,300
Feb 2011 - Jan 2012
1 14,000
Aegent
Feb 2011 - Jan 2012
-33,600 3 3,600
51,300 96,300
1 47,600
Remaining surplus (deficit) 10,000 10,000
2 0,000
Note: All amounts above are net of HST rebates.
*Balance of $20,000 will be retained for contigencies