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Council Meeting January 13, 1998 Santa Monica, California JAN 1 3 1998
TO Mayor and City Council
FROM CIty Staff
SUBJECT: Recommendation to Authorize the City Manager to Negotiate and
Execute a Contract with Henwood Energy Services, Inc , for
Consulting Services In the Development of an Energy
Management Plan
INTRODUCTION
This report recommends that the City Council authorize the City Manager to negotiate
and execute an agreement with Henwood Energy SerVIces, Ine I for consultIng
services to develop an energy management plan In an amount not to exceed $88,000
BACKGROUND
The deregulation of the electnc Industry, scheduled to begin on January 1, 1998 will
eventually create a competitive marketplace for the purchase of energy and energy
servIces Over the past several years, the CIty has monItored the potential Impacts of
the Impending deregulation, and worked with other cities through the Aspen Accord to
develop comprehensive energy resource management strategies to adopt In response
to deregulatIon
The Task Force on the EnVironment proposed the following gUIding pnnclples In the
1996 Sustainable CIty Progress Report presented to Council on March 18, 1997
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JAN 1 3 1998
for the purpose of gUiding energy management and procurement deCISions
Energy Resources Guiding Principles
. Ensure energy supply reliability and pnce stability
. Optimize cost-effective energy effiCiency Investments In all sectors of the
community
. Reduce the environmental and public health Impacts created by energy
generation and consumption both locally and globally
. Increase the use of renewable resources
. Ensure eqUitable dlstnbutlon of the costs and benefits created by the
restructuring of the electnc utility Industry
. Use innovative approaches to gain greater control of the City's energy future
and retain more fInancial Investment within the community
DISCUSSION
Staff Issued a Request for Proposals In October to over thirty firms for technical
consulting services to assist In analyzing the options available to the City as a result of
the restructuring of the electnc Industry Eight firms submitted proposals and three
prospective firms were Interviewed by a committee comprised of CIty staff representing
the City Manager's Office, and the Finance and Environmental and Public Works
Management Departments Henwood Energy Services was selected to be the project
consultant based on thelf expenence prepanng effective energy management analysIs
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for other Callforma municipalities
It IS anticipated that the restructuring of the electnc Industry may create Imtlal volat[lIty
and uncertainty In the marketplace To ensure that the CIty adopts an energy
management plan which IS responsive to ItS needs and provides flexibIlity, [t IS
recommended that the project proceed In two phases The follOWing tasks Will be
completed by the project consultant
Phase One
. Analyze current energy consumption and energy use patterns for City faclllt[es and
the reSidential, Institutional, commerc[al and Industnal sectors of the communIty
. Analyze options available to the City that WIll emerge In a competitive
marketplace, such as aggregation, direct access, power exchange purchase, load
management, and the availability of other energy sources, Includ[ng self-generation
and power dlstnbut[on
. Assist In the Identification of potential aggregation partners In Santa Monica and
nelghbonng cOmmUnities, and analyze the costs and benefits of establ[shlng an
aggregation group for the purchase of energy
. Keep the City abreast of State rulings and Federal legislation which might
Impact the City's response to electnc Industry restructunng
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Phase Two
. Assist staff In the development of a Request for Proposals for the selection of an
energy provider for an aggregation group and In the evaluation of responses to the
Request for Proposals
. Assist City staff In ascertaining the community's needs regarding the purchase of
energy and energy services
. Prepare a report With final recommendations
BUDGET/FISCAL IMPACT
Funding IS currently available from Environmental Programs DiviSion account number
31-500-662-OO000~5506-00000
RECOMMENDATION
Staff recommends that the City Council authOrize the City Manager to negotiate and
execute an agreement With Henwood Energy Services, Inc , for consulting services In
the development of an energy management plan In an amount not to exceed $88,000
Prepared by Craig Perkins, Director of Environmental and Public Works
Management
Susan Munves, Conservation Coordinator
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