sr-061411-3fCity Council Meeting: June 14, 2011
Agenda Item: 3" ~
To: Mayor and City Council
From: Stephanie Negriff, Director of Transit. Services
Subject: Supply and Deliver LNG Fuel to the Big Blue Bus
Recommended Action
Staff recommends that City Council
1. Award Bid No. 3024 to Clean Energy, a California based company, for the
purchase and delivery of Liquefied Natural Gas (LNG) fuel.
2. Authorize the City Manager to negotiate and execute a contract with Clean
Energy in the amount of $12,500,000, for a term of one year with four additional
one year renewal options.
Executive Summary
The purchase of LNG fuel supports Santa Monica's Sustainable City Plan for reduced
emissions and sustaihability. Staff recommends that Clean Energy provide LNG fuel for
the Big Blue Bus (BBB) at specific unit prices plus applicable sales tax. The bid award is
for a one year period with four additional one year renewal options. The total
expenditure for the five year term would be $12,500,000.
Background
The BBB currently operates a fleet of 125 natural gas transit coaches which run 100%
on domestically produced natural gas. An additional 15 coaches powered by natural gas
will be added by December 2011: The BBB currently consumes approximately 270,000
gallons of LNG a month. As transit coaches are replaced, the BBB will continue to
expand its natural gas fleet, which requires a reliable supply of fuel from a proven and
qualified LNG provider.
Discussion
On March 9, 2011, the City published Notices Inviting Bids to supply and deliver. LNG
fuel for the Big Blue Bus in accordance with City specifications. Bids were received and
1
publicly opened and read on March 23, 2011, per Attachment A. Bids were evaluated
based on competitive pricing, bid response time, vendor experience and references.
Based upon these criteria Clean Energy is recommended as the best bidder.
Clean Energy has been delivering LNG fuel to the BBB since 2006. The fuel will be
produced locally in Boron, California and be delivered by LNG-powered tanker trucks.
Financial Impacts & Budget Actions
The contract amount to be awarded to Clean Energy for this five-year term is
$12,500,000. Funds in the amount of $2,500,000 have been included in the proposed
budget in account number 41654.522975 for FY 2011-13. Future funding for additional
years will be requested in future year's budgets and will be contingent upon Council's
approval. All monies expended for the purchase of LNG fuel will be from transit specific
funding sources.
Prepared by: Ralph Merced, Transit Maintenance Manager
Approved:
Forwarded to Council:
~S~°ianie Negriff
~r ctor of Transit Services
Rod Gould
City Manager
2
ATTACHMENT A
BID RESULTS
BID q: 3024 CLOSE DATE: March 21, 2011
BID TITLE: SUPPLY & DELIVER LIQUEFIED NATURAL GAS (LNG) AS REQUIRED BY THE BIG BLUE BUS
- General Physics Corporation !f
Escondido;CA . Clean Energy
Seal Bepch, CA ,
PRICING:
Southern CA Border Index Price plus: $ 0.58 $ 0.619
Not to exceed: $ 1.75 N/A
LNG (fxed price: $ 1 75 Term Period 1 Period 2 Period 3 Period 4 Period 5
Delivered Price 0.619 0.619 0.619 0.619 0.619
Hedged Gas Price 0.44 0.49 0.52 0.55 0.117
Sales Tax (9.75%) 0.103 0.108 0.111 0.114 0.117
Total Price Per LNG
Gallon
1.162
1.217
1.25
1.283
0.853
Tank Trailer Capacity 10,000 +/-gallons 10000 gallons
Delivery Fee: $ 2,000.00 $ -
Net bid based using December 5, 2010 as an example. $0.58 /LNG Gallon = $0.93 /LNG Gallon
Delivery Price = $200 /per delivery $.0974 plus applicable tax
PAYMENT TERMS
RENEWAL OPTIONS/SERVICE MAINTENANCE:
PERIOD 2: 5% INCREASE 3% INCREASE
PERIOD 3: 5% INCREASE 3% INCREASE
PERIOD 4: 5%INCREASE 3%INCREASE
PERIOD 5: 5% INCREASE 3% INCREASE
Page 1 of 1
Reference Contract No.
9381 (CCS)