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Home My WebLink About2009-093THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON BY-LAW 2009-093 Being a By-law to authorize a contract between the Corporation of the Municipality of Clarington and Blackstone Energy Services Inc., Toronto, Ontario, to enter into agreement for the direct purchase of Natural Gas. THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON HEREBY ENACTS AS FOLLOWS: 1. THAT the Mayor and Clerk are hereby authorized to execute, on behalf of the Corporation of the Municipality of Clarington and seal with the Corporation Seal, a contract between, Blackstone Energy Services Inc. Toronto, Ontario, and said Corporation; and 2. THAT the contract attached hereto as Schedule "A" form part of this By-law. By-law read a first and second time this 29~' day of June, 2009. By-law read a third time and finally passed this 29th day of June, 2009. ~_!weyvF - Mli~iiLi `'ipal ~Lgrk INDEPENDENT CONSULTANT AGREEMENT THIS INDEPENDENT CONSULTANT AGREEMENT is made as of the first day of July, 2009. BETWEEN: THE CORPORATION OF THE MUNICIPALITY OF CLAR/NGTON (hereinafter called the "Municipality") OFTHE FIRST PART and - BLACKSTONE ENERGY SERVICES INC. (hereinafter called the "Consultant") OF THE SECOND PART WHEREAS The Regional Municipality of Durham and the Municipality of Clarington have called proposals for the provision of services: The Consultant has offered to supply such services and the Municipality and the Consultant have agreed upon the provision of the services upon the terms and conditions contained in this Agreement. IT IS AGREED 1.0 INTERPRETATIONS 1.1 In this Agreement unless the context otherwise requires: "Agreement" means this agreement and includes Schedules and any annexes or documents incorporated by reference; "Consultant" means the person or company so named in the Description of the Parties at the commencement of this document; "Consultant's Representative" means the person appointed by the Consultant to represent tFie Consultant for the purposes of this Agreement and so identifed in Schedule 1 or such person as may be appointed subsequently by the Consultant and notified to the Municipality in writing; "GST" means any tax imposed under GST legislation; "Project S@rvice" means the services described in Schedule 2 which are to be performed by the Consultant in accordance with this Agreement; "Request for Proposal" means the document issued by the Regional Municipality of Durham and the Municipality are seeking offers for the provision of the Project Services which document is incorporated into Schedule 2 to this Agreement. 1.2 A recital, schedule, annex or a description of the parties forms part of this Agreement. PAGE 1 INDEPENDENT CONSULTANT AGREEMENT 1.3 In this Agreement unless a contrary intention appears words imparting a gender include any other gender and words in the singular includes the plural and vice versa 1.4 Clause headings in this Agreement are for the convenience of reference only and have no effect in limiting or extending the language of the provisions to which they refer. 1.5 This Agreement shall be governed by the Laws of the Province of Ontario. 2.0 ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the Municipality and the Consultant in relation to the Project Services and any previous correspondence is expressly excluded. 3.0 TERMINATION If one party gives written notice to the other of a breach of this Agreement and the breaching party fails to cure said breach within 10 days, this Agreement may be terminated by the non- breaching party. 4.0 TERMS OF PAYMENT Payment will be made on a monthly basis upon submission of an invoice by the Consultant indicating the Agreement number and setting forth the charges in accordance with the rates detailed in Schedule 3, the Project Services in Schedule 2 and the work plan in Schedule 1. No payment shall be made in advance of work pertormed, except as specified in this Agreement. The Municipality's representative prior to payment shall certify all invoices for payment. No invoice shall be certified for payment unless the Project Services for which payment is sought has been satisfactorily completed. The Municipality will pay invoices that have been certified, within 30 days of receipt of the invoice. 5.0 ASSIGNMENT AND SUBCONTRACTING The Consultant mayj not assign or transfer this agreement, or any interest therein or claim thereunder, or subcontract any portion of the work, thereunder, without the prior written approval of the Municipality. 6.0 PATENTS Whenever any invention or discovery is made or conceived by the Consultant in the course of or in connection with this Agreement, the Consultant shall promptly furnish the Municipality complete information with respect thereto and the Municipality shall have sole power to determine whether and where a patent application shall be filed and to determine the disposition of the title to and all rights -under any application or patent that may result. The Consultant will at the Municipality's expense, execute all documents and do all things necessary or proper with respect to such patent applications. The Consultant is specifically subject to and obliged to assign all rights ,title and interest in any such patent rights to the Municipality as well as all right, title and interest in tangible research products embodying such invention whether the inventions are patentable or not. 7.0 COPYRIGHT The Municipality shall own, solely and exclusively, the copyright and all copyright rights to any written or otherwise copyrightable material deliverable under this Agreement. The Consultant warrants that all creators of copyrightable material delivered under this Agreement to the Municipality are, at the time of the material's creation, bona fide employees or subcontractors of the Consultant, and that such creation is within the course and scope of the creator's employment. 8.0 PROJECT SERVICES The Consultant shall provide the Project Services, which shall conform to the Performance Standards and meet all other requirements set out in Schedule 2. 9.0 FEE FOR PROJECT SERVICES The Municipality will pay the project fees to the Consultant as specified in Schedule 3 for the Project Services completed on a project or monthly basis. PAGE 2 INDEPENDENT CONSULTANT AGREEMENT 10.0 CONSULTANT'S LIABILITY The Consultant shall defend, indemnify, and hold the Municipality, its officers, employees, and agents harmless from and against any and all liability, loss, expense (including reasonable attorney's fees), or claims for injury or damages that are caused by or result from the negligent or intentional acts or omissions of the Consultant, its officers, agents or employees. 11.0 INSURANCE 11.1 The Consultant, at its sole cost and expense shall insure its activities in connection with the work under this Agreement and obtain, keep in force, and maintain insurance as follows: 11.1.1 The Consultant shall maintain and pay for Comprehensive General Liability Insurance including premises and all operations. This insurance coverage shall be subject to limits of not less than $ 3;000,000 inclusive per occurrence for third party Bodily Injury and Property Damage or such coverage or amount as may be requested. The policy shall include the Municipality as an additional insured in respect of all operations pertormed by or on behalf of the Consultant. A certified copy of such policy or certificate shall be provided to the Municipality prior to commencement of the work. 11.1.2 Business Automobile Liability Insurance for owned, scheduled, non-owned, or hired automobiles with a combined single limit not less than $ 1,000,000 per occurrence. REQUIRED ONLY IF THE CONSULTANT IS DRIVING ON MUNICIPAL PROPERTY IN THE COURSE OF PERFORMING WORK FOR THE MUNICIPALITY. 11.1.3 Professional Liability Insurance with a limit of $ 1,000,000 per occurrence. If this insurance is written on a claims-made form, it shall continue far three years following termination of this Agreement. The insurance shall have a retroactive date of placement prior to or coinciding with the effective date of this Agreement. 11.2 It shall be expressly understood that the Insurance coverage and limits referred to above shall not in any way limit the liability of the Consultant. The Consultant shall.furnish the Municipality with certificates of insurance evidencing the compliance with all requirements prior to commencement of work under this Agreement. Such certificates shall: • Provide 30 days advance notice to the Municipality of any modification, change, or cancellation of any of the above insurance coverage. • Indicate that the Municipality has been endorsed as an additional insured under the coverage referred to in section 11.1.1 • Include a provision that the coverage will be primary and will not participate with nor be excess over any valid and collectible insurance or program of self insurance carried or maintained by the Municipality. 12.0 CONFLICT OF INTEREST The Consultant shall not hire any officer or employee of the Municipality to perform any services covered by this Agreement. The Consultant affirms that to the best of his/her knowledge there exists no actual or potential conflict between the Consultant's family, business, or financial interests and the services provided under this Agreement,:. and in the event of change in either private interests or services under this Agreement, any question regarding possible conflict of interest which may arise as a result of such change will be raised with the Municipality The Consultant shall not be in a reporting relationship to a Municipal employee who is a near relative, nor shall the near relative be in a decision making position with respect to the Consultant. 13.0 CONFIDENTIALITY. All information provided to the Consultant by or on behalf of the Municipality, under this Agreement, shall be treated as confidential by the Consultant and such information shall not be disclosed tc a third party without prior written consent of the Municipality. No such information shall be used by the Consultant on any other project without the written approval of the Municipality. PAGE 3 INDEPENDENT CONSULTANT AGREEMENT 14.0 OWNERSHIP OF MATERIAL Any studies reports oh other material, graphic, software or otherwise, prepared by the Consultant for the Municipality unkler this Agreement shall belong to the Municipality and remain the property of the Municipality. The Consultant shall not disseminate this material to any third party, or represent in any way the ownership of the material without the prior written approval of the Municipality. 15.0 NON-WAIVER Waiver or non-enforcement by either party of a term or condition shall not constitute a waiver or a non-enforcement of any other term or condition or any subsequent breach of the same or similar term or condition. 16.0 NO THIRD PARTY RIGHTS Nothing in this Agreement is intended to make any person or entity who is not a signatory to the Agreement athird-party beneficiary of any right created by this Agreement or by operation of law. 17.0 TIME IS THE ESSENCE Time is of the essence in this Agreement. 18.0 STANDARD FOR PERFORMANCE The parties acknowledge that the Municipality, in selecting the Consultant to perform the services hereunder, is relying upon the Consultant's reputation for excellence in the performance of the services required hereunder. The Consultant shall perform the services in the manner of one who is a recognized specialist in the types of services to be performed. All deadlines set forth in the Agreement are binding and may be modified only by subsequent written agreement by the parties. The Consultant shall devote such time to performance of its, her, or his duties under this Agreement as is reasonably necessary for the satisfactory performance of such duties within the deadlines set forth herein. Nothing in the foregoing shall be construed to alter the requirement that time is of the essence in this Agreement. 19.0 CHANGES TO THIS AGREEMENT Changes to this Agreement will only be made by agreement in writing by both Parties 20.0 INDEPENDENT CONTRACTOR The services defined in this Agreement will be performed by the Consultant as an Independent Contractor at arms length from, and not as an employee of the Municipality. 21.0 PURCHASE ORDER OR STANDING AGREEMENT Prior to commencement of any service covered by this Agreement a Municipal Purchase Order Number or Standing Agreement Number must be granted by the Municipality's Purchasing Division. No contract exists without this Purchase Order or Standing Agreement Number. This number must be referred to on all correspondence and invoices. BLACKSTONE NERGY SERVICES INC. THE MUNICIPALITY OF CLARINGTON~,~,- ` - ' ,.. _ Sign to Dat Ji et ,Mae t3ate ~.C `~_ ,'/ ~. - -" r"if~r.N~~r1J"(s `~~(ZZ rJ-F~2 Title s~ ~ , ~~ - j Clerk Date..; _ PAGE 4 INDEPENDENT CONSULTANT AGREEMENT SCHEDULEI AGREEMENT 7.0 CONSULTANT NAME AND ADDRESS Blackstone Energy Services Inc. 330 Bay Street, Suite 304 Toronto, ON MSH 2S8 2.0 TERM OF AGREEMENT The period of pertormance for this agreement shall be from July 13, 2009 through December 31 2012 with two (2) optional one-year term extensions at the Municipality's sale discretion. 3.0 NOTIFICATION Any written notification required herein shall be personally served, mailed, or faxed to the following: For the Municipality: Jerry Barber, Manager Purchasing Services The Municipality of Clarington 40 Temperance Street Bowmanville, ON L1C 3A6 T: 905-623-3379, Extension 402, F: 905-623-3330 Iba rber(cilclarington. net For the Consultant Ryan Duffy, Managingpirector Blackstone Energy Services Inc. 330 Bay Street, Suite~04 Toronto, ON L1T 3A T:416-628-2828, F:416-840-9100 4.0 GST The Consultant is a GST registrant whose number is l.UU~~- ~}Z~ and invoices will clearly show the amount of tax as an additional item ~ ~ ~~ ~ PAGE 5 INDEPENDENT CONSULTANT AGREEMENT SCHEDULE 2 1.0 The consultant shall furnish to the Municipality the following services, reports and/or deliverables: • provide ongoing market intelligence, analysis, forecasting, supply chain information, pricing trends (risks and opportunities) and consultation on options and recommendations in order to optimize purchasing leverage and to meet the supply, risk tolerance and budget objectives of the Agencies; • establish appropriate financial and risk criteria in order to pre-qualify a roster of approved natural gas suppliers or distributors to bid competitively on futures contracts and gas balancing transactions; • act as an authorized agent on behalf of the Agencies in regards to Enbridge and Entrac account management and reporting, soliciting proposals from pre-qualified suppliers and executing buy-sell transactions; • ensure a secure and uninterrupted supply of natural gas to Enbridge under supply contracts, balance natural gas inventories to comply with Enbridge requirements to avoid penalties and losses, and, make timely payments to suppliers; • provide consultation and expert advice with respect to market condition, account administration, k3illing options, and legislative requirements or changes; • track price pertormance to budget, Enbridge rates and recognized industry benchmarks, • track actual consumption to Enbridge and budget forecasts, and supply contract volumes; • maintain the utmost financial integrity by providing detailed monthly statements of account (showing Transactions, consumption, billings, inventory balances, tracking variances etc), by providing certified copies of all Transactions, and through application of rigorous management practices, and established QA/OC programs. • Prior to November 1, 2009, the Consultant will provide services as appropriate to pre- qualify a Roster of Suppliers, offer advice and guidance with respect to the initial transaction terms and strategies, secure the initial supply Transactions, and shall work cooperatively with all parties to ensure a smooth transition. (The current consultant will also be providing services to the Agencies under their respective contracts, relating to Transactions and Enbridge account management effective to October 31, 2009). • After the final Transactions are completed, the Consultant will be required to provide a final monthly balance statement, continue to resolve any final issues or discrepancies related to any Transaction or Enbridge requirement, and work cooperatively with the Agencies to ensure a smooth transition in the event that a new Contract is awarded to another Consultant. 2.0 The Project Services are specified in the following documents, which documents are hereby incorporated into this agreement: 2.1 The Request for Proposals RFP 348-2009 for the provision of natural gas consulting and related services dated April 28, 2009, and, 2.2 The Consultant's Proposal dated May 26, 2009. PAGE6 1NDEPENDENTCONSULTANTAGREEMENT SCHEDULE3 COMPENSATION The Respondent shall perform the services for the fixed mark up price of $ 1.13 per 1000 m' of natural gas used by the Agencies throughout the Contract. (The fee will be incorporated in the Enbridge monthly bills). The proposed fixed mark up fee shall be held firm for the entire duration of the Contract, including the optional two years if these areawarded by the Municipality. PAGE 7 RFP348-2009 Consulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM REQUEST FOR PROPOSALS RFP348-2009 PURPOSE OF RFP: CONSULTING AND RELATED SERVICES FOR THE SUPPLY OF NATURAL GAS FOR THE REGION OF DURHAM AND THE MUNICIPALITY OF CLARINGTON CLOSING DATE AND TIME: PROPOSALS WILL BE RECEIVED BY MS. P. M. MADILL, REGIONAL CLERK, REGIONAL MUNICIPALITY OF DURHAM, MAIN LEVEL, 605 ROSSLAND ROAD, EAST, WHITBY, ONTARIO, L1N 6A3, UNTIL 2:00 P.M., LOCAL TIME, THURSDAY MAY 21ST, 2009, IN SEALED ENVELOPES CLEARLY MARKED AS TO CONTENTS. PUBLIC ANNOUNCEMENT: THE NAMES OF FIRMS SUBMITTING PROPOSALS WILL BE ANNOUNCED IN A PUBLIC MEETING TO BE HELD AT 2:15 P.M., LOCAL TIME, THURSDAY MAY 21ST, 2009, IN ROOM 1E, MAIN LEVEL AT 605 ROSSLAND ROAD, EAST, WHITBY, ONTARIO DATE OF ISSUE: Tuesday April 28, 2009 PRE-PROP05AL INFORMATION MEETING (Optional): None scheduled DEADLINE FOR INQUIRIES: Tuesday May 12, 2009 RFP348-2009 Cpnsulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Cpnsulting and Related Services for Supply of Natural Gas 3.1.3 Experience, Capabilities, Staffing Qualifications and Price Performance Track Record ...................................... 15 3.1.4 Financial Condition,:, Capacity and lntegrity ......................................................................................................... 16 3.1.5 Proposed Fees.........L ..........................................,.....................................:......,............................:....................... 16 3.1.6 Client Reference Feedback (conducted only for short listed Respondents)* ......................:................................. 16 3.1.7 Respondent Interviews (conducted only for short listed Respondents) ................................................................ 16 3.2 SUMMARY OF RATED EVALUATION CRITERIA WEIGHTING ........................................................ 16 3.3 SELECTION OF RESPONDENTS ....................................................................................................................... 17 4 BACKGROUND INFORMATION AND SCOPE OF WORK ..................................................................... 19 4.1 LOCATION ..................................................................................................................................................... 19 4.2 BACKGROUND .............................................................................................................................................. 19 4.3 SCOPE OFSERVICES......L .................................:............................................................................................ 19 4.3.1 Effective term of supply Transactions :.........................................................................:....................................... 20 4.3.2 Effective term of copsulting Contract .................................................................................................................. 20 4.3.3 Consulting Fees ................................................................................................................................................... 20 4.3.4 Natural Gas Purchasing Cooperative Service Model ............................................................................................ 21 FORM OF PROPOSAL SI~CTION .................................................................................................................22 5.1 SUBSECTION 1: FORIM OF PROPOSAL LISTENG OF SUBSECTIONS .................................................:........23 5.2 SUBSECTION 2: FEES ANI7 PROPOSED CONTRACT CHANGES ...........................................................................24 5.2.1 Proposed Fee..........{ .............................................................................................:...............................................24 5.2.2 Proposed Contract Qhanges ..................................................................................................................................24 S.3 SUBSECTION 3: RESPONIDENT CLIENT REFERENCES ........:..........................................................................25 5.4 sussecTlON 4: STAFF EXPERIENCE AND QUALIFICATIONS .............................................................26 5.5 sossECT1DN 5: FORM OF PROPOSAL SIGNATURE PAGE ....................................................................27 6 SUPPLEMENTAL CONTRACT PROVISIONS ...........................................................................................28 6.1 ADDITIONAL TERMS ANA CONDITIONS ................................................................................ .........................28 6.2 CONTRACT CHANGES -UNANTICIPATED AMENDMENTS ...................................................... .........................28 6.3 DEFAULT BY COMPANY ............................................................................................... .........................28 6.4 NON-PERFORMANCE ..................................................................................................... .........................29 6.5 DURHAM PURCHASING COOPERATIVE MEMBERS OPTION TO PARTICIPATE ......................... ...............:.........29 6.6 FoRCEMAIEURE ....................................................................................:............................ .........................29 6.6.1 Events of Force Majeure ........................................................................................................... ............................29 6.6.2 Effect of Force Majeure and Notice .......................................................................................... ............................29 7 IRREGULARITIES ..........................................................................................................................................30 8 INDEPENDENT CONSULTANT AGREEMENT 9 APPENDIX "A" AGENCIES' 2008 GAS CONSUMPTION .......................................................................40 10 CERTIFICATE OF INSURANCE ..............................................................................................................41 11 DIRECT DEPOSIT AUTHORIZATION FORM .......................................................................................42 Page II RFP348-2009 Consulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas Proposals must be subrinitted in the form and format specified in Section 2. The Calling Agency's Purchasing By-law, procedures, and/or policies will apply for the calling, receiving, and opening of Bids, as well as dealing with any Bid irregularities found. The Form of Proposal (Section 5) MUST be completed and submitted in accordance with the Bid Document instructions in order for the proposal to be considered. All Addenda issued should be acknowledged in the Form of Proposal. Proposals must be submitted in a sealed envelope and properly identified with the tender/proposal number and the Respondent's name and address in accordance with the labelling instructions in the Bid Document. Proposals must be signed by a designated signing officer of the bidding firm, and contain either a witness signature or affixed Corporate Seal. Proposals must not be restricted by a statement added to the bid form or by a covering letter, or by alterations to the bid form supplied unless otherwise provided in the Bid Document. If a joint Bid is submitted, it must be signed and addressed on behalf of each of the Respondents. Proposals must be legible, written in ink, or typewritten. The person signing on behalf of the Respondent must initial erasures, over-writing or strikeouts. Proposals received after the closing time specified in the Bid Document will not be considered and will be returned unopened. Where bonds or other forms of surety are required, the stipulated Bid Security (Agreement to Provide Renewable Performance Bond, Agreement to Provide Irrevocable Letter of Credit and/or Bid Bond, Irrevocable Letter of Credit, Certified Cheque, Bank Draft, Money Order, etc.) must be executed and submitted with the Bid in original forms. Each Respondent should .carefully review the Bid Document for errors, omissions, defects and questionable or objectionable matter. Comments concerning the foregoing must be made in writing and received by the Contact Person identified in the Bid Document by the deadline for inquiries. This will allow time to correct any defects through the issuance of a formal Addendum. Protests based on any errors, omissions, defects and questionable or objectionable matter will be disallowed if these faults have not been brought to the attention of the Contact Person, in writing, by the required deadline. In submitting a response, the Respondent acknowledges having read, completely understood, and accepted the Bid Document terms and conditions in full. Each Respondent is responsible for ensuring that he/she has all of the information necessary to respond to the Bid Document and for independently informing and satisfying themselves with respect to the information contained in the Bid Document and any conditions that may in any way affect its Bid Submission. The use of the mail or courier services or any third party for delivery of a Bid will be at the sole risk of the Respondent. (It is a common practice for Couriers to place the bid envelope within a separate Courier envelope. In these instances, the official bid envelope label would be hidden). The Region assumes no responsibility to deliver any Bid to the Regional Clerk or to the Purchasing Section (as applicable). even if received elsewhere at the premises prior to the closing date and time. 1.3 CONTACTS AND INQUIRIES DURING THE BID CALL All questions or inquiries must be made in writing and received by no later than 4:30 o.m. local time. Tuesday Mav 12. 2009. Faxed or emailed inquiries will be accepted. (If making inquiries by Page 2 RFP348-2009 Consulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas Bid or Bid Submission -The Bid submitted by a Bidder and received by the Region in response to the Bid Document. This may also refer to a Proposal submission. Calling Agency -The member Agency within the Durham Purchasing Co-operative responsible for issuing the Bid Document on behalf of the Agencies. For this RFP, the Calling Agency is the Region of Durham. Clarification - A clarification of any Bid Document term, condition or specification issued by the Region (usually in response to a request for clarification received during the bid call) that does not alter the Bid Document, or result in an Addendum. Such Clarifications do not require acknowledgement by the Bidder in the Bid Submission. Company, Contractor, Consultant -The person, firm or corporation (submitting a Bid in response to the Bid Documents) to whom the Region or any Agency has awarded the Contract or Purchase Order. Contact Person -The Region's contact person identified in the Bid Document for the purpose of communicating with the Region about the Bid Document or procurement processes. Contract or Purchase, Order -The executed agreement, purchase order or standing agreement including any attachments thereto, all subsequent duly authorized amendments in date order, Addenda in date orderc, the. Bid Document, the Company's Bid, the bonds, warranties or other required securities (if any). Durham Purchasing Co-operative - Is an assembly of Agencies operating within the Regional Municipality of Durham and supported by public funds. Extra Work -Work not provided for in the Contract as awarded but considered by the Region's Project Manager to be essential to the satisfactory completion of the Contract within its intended scope, including unanticipated work required to comply with legislation and regulations that affect the Work. Fee,- Shall mean a fixed mark up price (in Canadian funds) per 1000 m' of natural gas, excluding GST, in consideration of the services to be performed for the Agencies and all costs thereof, not subject to change throlAghout the term of the Contract. Group -One or more Mlembers of the Durham Purchasing Co-operative. Mandatory, Must or Shall -The terms "mandatory', "must" or "shall" identifies a mandatory requirement, item or factor (as opposed to "rated"). Failure to provide a mandatory submission requirement with the proposal, or meet a mandatory item or factor shall result in the rejection of the Bidder's proposal Master Agreement - An agreement (written contract between the Agency and a natural gas supplier) in the form of NAESB Documentation, together with all relevant addenda and schedules, that sets out the general terms and conditions that are to apply to any Transaction that may be entered into between the Agency and a supplier. Member -Any publicly funded Agency with membership in the Durham Purchasing Co-operative. MFIPPA -The Province of Ontario "Municipal Freedom of Information and Protection of Privacy Act" Page 4 RFP348-2009 Consulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas Proposals shall be irrevocable for one hundred and twenty (120) days after the official closing time. 1.8 EVALUATION OF PROPOSALS The Procurement Officer and an evaluation committee made up of the Procurement Officer and employees from the Region and the Municipality of Clarington will evaluate Proposals. The evaluations will be based solely on the evaluation criteria and factors set out in Section 3. 1.9 CONTRACT TERMS AND CONDITIONS The Independent Consulting Agreement contained in Section 8 and any Supplemental Contract Provisions contained iri Section 6 shall form the basis for any Contract awarded from this RFP; unless otherwise modified or amended through negotiation between the parties. These terms and conditions may be modified by the Region and each Agency to reflect the specific requirements of this Bid Document throy~gh negotiation with the recommended Respondent. By submitting a Proposal the Respondent is agreeing to the Bid Document terms and conditions, unless the Proposal contains proposed minor changes in the applicable response section of the Proposal that, in the Region's sole opinion, do not materially conflict with, or diminish the Agencies rights. The Region, in its sole and absolute discretion, may eliminate any Proposal from further consideration that contains proposed changes to the Bid Document terms and conditions which would materially conflict with, or diminish the Agencies' rights, and/or where negotiations. between the Region and the Respondent fail to eliminate or modify the proposed changes to the Region's satisfaction. Where there may be a difference between the terms and. conditions contained in this Bid Document and those in the Region's Standard Terms and Conditions, those in this Bid Document will prevail The Region will not consider any changes to the Bid Document terms and conditions proposed by the Respondent that were not contained in the Respondent's Proposal. 1.10 NEGOTIATIONS The Region may elect to initiate negotiations with the highest ranked Respondent(s) prior to award. The option of whether or not to initiate negotiations rests solely with the Region. Respondents will be responsible for any of their own expenses incurred to attend any such negotiations. The Region reserves the right to add terms and conditions during negotiations. These terms and conditions will be within the scope of the Bid Document and will not affect the Proposal evaluations. 1.11 FAILURE TO NEGOTIATE The Region may terminate negotiations.with the Respondent and commence negotiations with the next highest ranked Respondent if the highest ranked Respondent: • Fails to provide information required to begin negotiations in a timely manner; • Fails to negotiate in good faith; • Indicates they cannot perform the Work within the funds available for the Project; or • Cannot come to terms with the Region, after a good faith effort. Upward price negotiation will not be permitted. Page 6 RFP348-2009 Consulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas i. a financial analysis determining the actual cost of the Proposal when considering factor's including quality, service, price and transition costs arising from the delivery of the required services; ii. information provided by references; iii. the Respondent's past performance on previous contracts awarded by the Region; iv. the information provided by a Respondent pursuant to the Region exercising its clarification rights under this RFP process; or v. other relevant information that arises during the RFP process; d) waive formalities and accept Proposals which substantially comply with the requirements of this Bid Document; e) verffy with any Bidder or with a third party any information set out in a Bid Submission; f) check references other than those provided by any Bidder; g) disqualify any Bidder whose Bid contains misrepresentations or any other inaccurate or misleading information, or any qualifications; h) disqualify any Bidder or the Bid Submission of any Bidder whc has engaged in conduct prohibited by this Bid Document; i) make changes, including substantial changes, to this Bid Document provided that those changes are issued by way of Addenda in the manner set out in this Bid Document; j) select the Respondent other than the Respondent whose Proposal reflects the lowest cost to the Region or the highest overall score; k) cancel this Bid process at any stage; I) cancel this Bid process at any stage and issue a new Bid Document for the same or similar deliverables; m) accept or reject any or atl Proposals in whole or in part; n) discuss with any Respondent different or additional terms to those contemplated in this Bid Document or in any Respondent's Proposal; o) if a single Bid'.. is received, reject the Bid of the sole Bidder and cancel this Bid process or enter into direct negotiations with the sole Bidder. These reserved rights are in addition to any other expressed rights or any other rights which may be implied in the circumstances. The Region may reject] any Bid that: • Is incomplete, obscure, or does not comply with all of the material and substantial terms, conditions, and performance requirements of the Bid Document; • Proposes an off-site working relationship or service that may cause or be perceived to cause a Conflict of Interest; • Does not comply with all applicable Municipal, Provincial, and Federal laws, codes, and regulations, which may be applicable to the Work performed subsequent to the award of this bid opportunity; or The Region may waive minor informalities that: • Do not affect responsiveness; • Are merely a matter of format; • Do not change the relative standing or otherwise prejudice other Proposals; • Do not change the meaning or scope of the Bid Document; • Are trivial, negligible, or immaterial in nature; • Do not reflect a material change in the Work; or, • Do not constitute a substantial reservation against a requirement or provision. The Region shall not be liable for any expenses, costs or losses suffered by any Respondent or any third party resulting from the Region exercising any of its express or implied rights under this Bid Document. Page 8 RFP348-2009 Consulting and Related Services for•Suooly of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas 1.19.3 Addenda During the period prior to submission of Proposals, any required changes or alterations to the Bid Document will be issued to invited firms and/or registered document takers only as written Addenda. The Respondent shall acknowledge in its Proposal all Addenda that were considered when its Proposal was prepared, as clarified further on in this Section. If, in the opinion of the Region, the Addendum issued affects the price of the Proposal, and the Addendum is not returned or acknowledged in the Form of Proposal, then the Proposal submitted will be deemed non-compliant and rejected. If, in the opinion of the Region, the Addendum does not affect the Proposal price and it is not submitted with the Proposal or acknowledged in the applicable Proposal Submission form, the Respondent will be allowed two working days to submit the missing signed Addendum to the Region of Durham Purchasing Section. The submission of a Proposal within the time frame established by an Addendum issued solely for the purpose of extending a Bid closing date and time shall be considered as fully satisfying the requirements of that Addendum.. The Region reserves the right, at its sole and absolute discretion, to extend the Bid Submission deadline. Should the Bid Submission deadline be extended, an Addendum will be issued confirming the new closing date, time and location. Under no circumstances shall the Respondent rely upon any information or instructions from the Region, its employees, or agents unless provided in writing by the Region's Contact Person. The Region, its employees,'or agents shall not be responsible for any information or instructions given to the Respondent, with the exception of information or instructions provided by the Region's Contact Person, or issued through formal written Addenda to the Bid Document. 1.19.4 Requests for Clarifications of Proposals by the Region after Bid Close The Region reserves the right in its sole discretion to seek clarification of any Proposal after closing date and time from that Respondent without becoming obligated to clarify or seek further information from any or all other Respondents. Respondents are cautioned that any clarifications of .Proposals sought by the Region after the closing date and time. will not be an opportunity either to correct errors or to change their Proposals in any substantive manner unless specifically permitted under Tender Irregularities. 7.20 REQUESTS FOR WITHDRAWAL 1.20.1 Withdrawal Requests Received Prior to the Closing Date and Time Respondents may withdraw a Proposal which has already been submitted, provided the withdrawal request is received and authenticated by the Region prior to the closing date and time. Withdrawal requests must be submitted in writing by fax, registered mail, or courier. It is the Respondent's responsibility to ensure that the withdrawal request is received before the closing date and time. The Region reserves the right to request confirmation of the authenticity of the withdrawal request from a responsible official of the Respondent; by phone, fax, or a-mail. The withdrawal of a Proposal does not disqualffy a Respondent from submitting another Proposal in response to the same Proposal call, provided it is submitted in the manner stipulated in the Bid Document and received before the closing date and time. Page 10 RFP348-2009 Consulting and Related Services for Suoglv of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas 1.25 MUNICIPAL FREEDOM OF INFORMATION AND PROTECTION OF PRIVACY ACT (MFIPPA) All Proposals, documentation and information provided to the Region by Respondents or the Company in connection with, or arising from the Proposal and/or Contract shall become the property of the Region, and as such are subject to requests under the Municipal Freedom of Information and Protection of Privacy Act. Accordingly, Respondents are requested to identify any information in their Proposal that, if disclosed, could cause them injury. The Region will make every effort to maintain the confidentiality of such'. information, but Respondents must be aware that the information may become public through a request for information under the MFIPPA. The Region shall not be liable if any such confidential information becomes public or is disclosed. Respondents may not identify their entire Proposal as `Confidential". Such a notation may be considered as grounds for disqualification. 1.26 MEANING, INTENT OR AMBIGUITY OF BID DOCUMENT OR CONTRACT Should a dispute or diisagreement arise from the terms and conditions of any part of the Bid Document or Contract,',regarding meaning, intent or ambiguity, the decision of the Region shall be final 1.27 CONTRACT APPROVAL This Bid Document ddes not, by itself, obligate the Region. The Region's obligation will commence upon written notice of award to the Respondent by the Procurement Officer and issuance of the Contract by way of a standing agreement. Upon written notice to the Company, the Region may set a different starting date for the Contract. The Region will not be responsible for any work done by the Company, even work done in good faith, if it occurs prior to the contract start date set by the Region. 1.28 AWARD OF CONTRACT 1.28.1 NotfceofAward The successful Resporjdent will be advised in writing of each Agency's acceptance of its Proposal and shall be allowed teh (10) business days from the date of the acceptance notice to provide the required insurance certificate(s), Workplace Safety and Insurance Board Certificate of Clearance, as well as execute and/or furnish any other required contracts or documents identified in the Bid Document. The placing in the mail or delivery to the Respondent's shown address identified in the Proposal of a notice of award to a Respondent by the Agency shall constitute notice of acceptance of the Proposal by the Agency to the extent described in the notice of Award. 1.28.2 Failure to Comply Failure by the successful Respondent to comply with the above requirement shall make the Award of the Contract by the Agency (ies) subject to withdrawal and entitle the Agency (ies) to recover loss, damage or expense incurred as a result of the successful Respondent's default including, but not limited to, the additional cost associated with selecting another Respondent. The Agency (ies) may then award the Contract to one of the other Respondents or take such other action as it chooses. Page 12 RFP348-2009 Consulting and Related Services for~Suooly of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas • The proposed methodology, management plan, financial controls and criteria to be used to accomplish the objectives of the RFP; Include sample documentation and reports that demonstrate financial management and commodity market information and analysis; • Explain how the proposed service model, management practices, and any established QA/QC programs will accomplish the objectives of the RFP; Provide an organizational chart of the personnel assigned to accomplish the work called for in this RFP, the lines of authority, and the individuals responsible and accountable for the performance of the RFP; • Explain the proposed transportation and distribution pricing strategies; • Explain other value added services 2.3.3 Experience, Staffing Qualifications and Price Performance Track Record Provide an overview of your firm's experience in performing agency and consulting services, Enbridge and En~rac account management and reporting, soliciting natural gas proposals and executing futures Transactions; Provide a minimum of 3 relevant client references administered within the last 3 years; • Provide historical price performance data for the previous 3 years using Enbridge as a pricing benchmark for comparison; Provide the following information for each individual assigned responsibility: (These should relate to individuals identified in Form of Proposal Subsection 4) a. title, b. resume, c. specific responsibilities assigned to each person. 2.3.4 Financial Condition,' Capacity and Integrity Provide evidence of sufficient financial condition and capacity to manage these requirements. (Note that the Region reserves the right to obtain and consider credit reports from established Credit Reporting Agencies) Provide information about your established financial controls to ensure the utmost financial integrity 2.3.5 Fees The Respondent shall propose a Fee, excluding GST, in consideration of the services to be performed and all costs thereof, based on a fixed mark up price (in Canadian funds) per 1000 m' of natural gas used by the Agencies throughout the Contract. (The fee will be incorporated in the Enbridge monthly bills). The Fee shall be held firm for the entire duration of the Contract, including the optional two years if these are awarded. Page 14 RFP348-2009 Consulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas • the ability to provide consultation and expert advise with respect to account administration, billing options, and legislative requirements or changes; • suitable qualifications and proven experience of the proposed key staff in relation to managing all aspects of the required services; • a successful price performance track record (The Region reserves the right to consider past performance on Region projects when rating the responses against this subsection). 3.1.4 Financial Condition,:, Capacity and Integrity Does the Proposal response and sample documentation demonstrate: sufficient financial capacity and condition to meet the financial obligations of the RFP, as demonstrated through supplied documentation and credit reports (Note that the Region reserves the rightto obtain and consider credit reports and ratings.) the utmost financial integrity, as evidenced through established financial management and controls, and the sample documentation and reports; 3.1.5 Proposed Fees The proposed fixed mark up fee will be assigned a score in relation to the fees offered in other Proposals. 3.1.6 Client Reference Feedback (conducted only for short listed Respondents)' The feedback from references offered by short listed Respondents demonstrates that: • the project reference information provided by the Respondent is generally accurate and relevant to the requirements of the RFP; • the Respondent materially met all performance requirements under a similar contract, and/or was not terminated due to failure to perform its obligations under the contract 'The Region reserved the right to consider its own experiences with the Respondent, or any other reference of its dhoosing. 3.1.7 Respondent Interviews (conducted only for short listed Respondents) The Respondent should demonstrate during the interview: • the ability to provide a brief and insightful overview of the Proposal, and to respond clearly and completely to clarification requests raised by the Region, referring as applicable to the Proposal sections or to other information sources available at the time of the Proposal submission; • the ability to cover the required presentation information within presentation timeframe (90 minutes) 3.2 SUMMARY OF RATED EVALUATION CRITERIA WEIGHTING Subsection Rated Criteria Total Points Available 3.1.1 Understanding of RFP Requirements 10 3.1.2 Methodology and Management Plan 2b Page 16 RFP348-2009 Consulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas Proposals that passed the Reference Checks (Step Three) will be required to participate in an interview which will be evaluated and scored out of a possible 5 points. The scores awarded for the interviews will be added to their previous Proposal scores for Subsections 3.1.1 through 3.1.5, resulting in a final score out of 100. Step Five Final selection and optional negotiations The evaluation committee may recommend an award to the Respondent with the higtrest ranked Proposal, or may initiate negotiations with that Respondent. The Region will attempt to eliminate or modify any unacceptable proposed changes s~:the Bid Document terms and conditions through negotiation, failing which, that Proposal will be eliminated and the Region will consider the next highest ranked Proposa6. ibis process will proceed until a Proposal is recommended, or all Proposals that passed Step Four are eliminated. The highest ranked Respondent that passed Step One but was not initially short listed may be considered in the event that all short listed Proposals are eliminated (subject to successfully completing .the remaining evaluation steps). The Region's decision in this regard is final. Step Six Award and Contract Execution Subject to the Region's and other Agencies' rights under Sections 1.1, 1.14 and 1.15, and the Agency's (ies') acceptance of the Contract terms and conditions, all Respondents will be notified of the results and Contracts will be executed with the successful Respondent and the Agencies. Note that the Award by any individual Agency may be subject to approval by its respective council. In the event that any Agency elects not to make an Award against this RFP, or fails to obtain its council approval to Award to the recommended Respondent, the remaining Agencies may continue to proceed with the Award as recommended by the evaluation committee under the same Contract terms. Page 18 RFP348-2009 Consulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas in order to optimize purchasing leverage and to meet thesupply, risk tolerance and budget objectives of the Agencies; • establish appropriate financial and risk criteria in order to pre-qualify a roster of approved natural gas suppliers or distributors to bid competitively on futures contracts and gas balancing transactions; • act as an authorized agent on behalf of the Agencies in regards to Enbridge and Entrac account management and reporting, soliciting proposals from pre-qualified suppliers and executing buy-sell transactions; • ensure a secure and uninterrupted supply of natural gas to Enbridge under supply contracts, balance natural gas inventories to comply with Enbridge requirements to avoid penalties and losses, and, make timely payments to suppliers; • provide consultation and expert advise with respect to market condition, account administration, billing options, and legislative requirements or changes; • track price performance to budget, Enbridge rates and recognized industry benchmarks, • track actual consumption to Enbridge and budget forecasts, and supply contract volumes; • maintain the utmost financial integrity by providing detailed monthly statements of account (showing Transactions, consumption, billings, inventory balances, tracking variances etc), by providing certified copies of all Transactions, and through application of rigorous management practices, and established QA/OC programs. • Pricr to November 1, 2009, the Consultant will provide services as appropriate. to pre- qualify aRoster of Suppliers, offer advice and guidance with respect to the initial transaction terms and strategies, secure the initial supply Transactions, and shall work cooperatively with all parties to ensure a smooth transition. (The current consultant will also be providing services to the Agencies under their respective contracts, relating to Transactions and Enbridge account management effective to October 31, 2009). • After the final Transactions are completed, the Consultant will be required to provide a final monthly balance statement, continue to resolve any final issues or discrepancies related to any Transaction or Enbridge requirement, and work cooperatively with the Agencies to ensure a smooth transition in the event that a new Contract is awarded to another Consultant. 4.3.1 Effective term of supply Transactions: The natural gas Transactions will begin on November 1, 2009. Transactions during the term of the Contract shall not exceed October 31, 2012 unless the term of the consulting Contract is extended by the Agencies. 4.3.2 Effective term of consulting Contract: The effective term of the consulting Contract will begin upon the Award and execution of Contracts by the Agencies (approximately July, 2009) and will continue until a final reconciliation of Transactions is received and accepted by the Agencies (approximately 2 months following October 31 n of the final year of the Contract). 4.3.3 Consulting Fees Consulting fees shall be based on a fixed brokerage fee applied to the actual volume of natural gas consumed by the Agencies throughout the terms of the Transactions. The fees shall be in consideration of all of the Consultants obligations under the Contract. No other fees may be charged, unless specialized consulting services beyond the scope of the Contract are requested by an Agency. (This might include, for example, value added services relating to specific locations, energy conservation, conducting a detailed billing account compliance audit, etc.) Page 20 RFP348-2009 Consulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas 5 FORM OF PROPOSAL SECTION NATURAL GAS SUPPLYAND RELATED SERVICES FOR THE REGION OF DURHAM AND THE MUNICIPALITY OF CLARINGTON PLEASE Name of Company USE INK OR PRINTER Address/CitylTown Postal Code Telephone Number Number E-Mail Address Name of Person Signing for Company Position of Person Signing for Company Name of Contact Person PROPOSALS RECEIVED BY: Ms. P.M. Madill, Regional Clerk The Regional Municipality of Durham, 605 Rossland Road, East, Main Level, Whitby, Ontario. L1 N 6A3 UNTIL 2:00 PM, LOCAL TIME, THURSDAY MAY 21, 2009 Note: Respondents shall include. this form with the Proposal Submission Page 22 RFP348-2009 Consulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas 5.2 SUBSECTION 2: FEES AND PROPOSED CONTRACT CHANGES 5.2.1 Proposed Fee The Respondent shall propose a Fee in the space below excluding GST, in consideration of the services to be performed and all costs thereof, based on a fixed mark up price (in Canadian Funds). per 1000 m' of natural gas used by the Agencies throughout the Contract term. (The Fee will be incorporated in the Enbridge monthly bills). $ per 1000 Cubic Meters 5.2.2 Proposed Contract Changes Respondents shall attach any proposed changes to the Bid Document terms and conditions this Subsection, if applicable. Note that the Proposal fees will not be publicly announced at the Proposal opening meeting. Name of Bidder: Page 24 RFP348-2009 Consulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas 5.4 SUBSECTION 4: ' STAFF EXPERIENCE AND QUALIFICATIONS Provide names of key personnel to be used in performing the services of this RFP and attach details of their qualifications and education with the Proposal. References provided in the previous subsection should be for work completed by the key personnel listed below. The Respondent may attach pages in lieu of using this form. RESPONDENT'S KEY PERSONNEL: NAME I JOB TITLE QUALIFICATONS Name of Bidder: Page 26 RFP348-2009 Consulting and Related Services for the Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for the Supply of Natural Gas 6 SUPPLEMENTAL CONTRACT PROVISIONS 6.1 ADDITIONAL TERMS AND CONDITIONS The Region reserves the right to add terms and conditions during contract renewal periods or during subsequent negotiations. These terms and conditions will be within the scope of the Bid Document and will not affect the proposal evaluations completed previously. 6.2 CONTRACT CHANGES -UNANTICIPATED AMENDMENTS During the course of the Contract, the Company may be required to perform additional Work. That Work will be within the general scope of the initial Contract. When additional Work is required, the Project Manager or Designate will provide the Company a written description of the additional Work and request the Company to submit a firm time schedule for accomplishing the additional Work and a time and materials price. for the additional Work. The Company will not commence additional Work until the Project Manager or Designate has secured any required Region approvals necessary for the amendment and has authorized a written contract change order. The prices of the additional Work will be done in accordance with the agreed upon time and materials rates, unless a lump sum firm price has been requested and accepted. 6.3 DEFAULT BY COMPANY a. If the Company: commits any act of bankruptcy; or if a receiver is appointed on account of its insolvency or in respegt of any of its property; or if the Company makes a general assignment for the benefit of its creditors; then, in anysuch case, the Agency may, without notice: terminate the Contract. b. If the Company: fails to comply with any request, instruction or order of the Agency; or fails to pay its accounts; or fails to comply with or persistently disregard statutes, regulations, by-laws or directives of relevant authorities relating to the Work; or fails to prosecute the Work with skill and diligence; or assigns or sublets the Contract or any portion thereof without the Agency's prior written consent; or refuses to correct defective Work; or is otherwise in default in carrying out its part of any of the terms, conditions and obligations of the Contract, then, in any such case, the Agency may, upon a*piration of ten days from the date of written notice to the Company, terminate the Contract) c. Any termination of the Contract by the Agency, as aforesaid, shall be without prejudice to any other rights or remedies the Agency may have. d. If the Agency terminates the Contract, it is entitled to: take possession of all Work in progress, materials and construction equipment then at the project site (at no additional charge for the retention or use of the construction equipment), and finish the Work by whatever means the Agency may deem appropriate under the circumstances; ii) withhold any further payments to the Company until the completion of the Work and the expiry of all obligations under the Correction of Defects section; iii) recover from the Company loss, damage and expense incurred by the Agency by .reason of the Company's default (which may be deducted from any monies due or becoming due to the Company, any balance to be paid by the Company to the Agency). Page 28 RFP348-2009 Consulting and Related Services for the Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for the Supply of Natural Gas 7 IRREGULARITIES Irregularities will be dealt with as specified below (APPENDIX "A" TO BY-LAW 68-2000). Requests for Proposals and Quotations shall also be subject to these provisions where Bids are received by the Regional Clerk, and where a specific situation is applicable to the Bid Document. Irresaularity Response • Late bids ' Late bids will not be accepted and will be returned unopened. Bids will be deemed to have been received when the envelope has been stamped with the time and date of recei t b the Clerk. • Specified tender envelope, or label, not used • Automatic rejection • Tender envelope not sealed • Unsealed bids will not be accepted for deposit in the tender box. • Bids not completed in ink • Automatic rejection • Original ink signature missing from signature • Automatic rejection a e • Qualified bids (bids qualifi d or restricted by • Automatic rejection an attached or added statement • Bids received on documents other than those Automatic rejection, unless allowed for in the rovided in the re uest re uest • Bid security a) signature of Bidder and/or bonding company • Automatic rejection missing when bid bond requested b) not provided or not in the form and amount specked • Automatic rejection c) not sufficient • Where security is required and amount of security is expressed as a percentage of the total tender sum, automatic rejection unless insufficiency is de minimus (trivial or insignificant) • Where security is required and the amount of security is specified in respect, automatic rejection • -Agreement to provide performance securities • Automatic rejection is not rovided or is not in the forms ecified • Part bids (all items not bid) • Automatic rejection, unless allowed for in the re uest • Bids containing minor clerical errors • Two working days to correct and initial errors. The Region reserves the right to waive initialin and acce t tender. • Uninitiated changes to the bid documents • Two working days to correct. The Region which are minor (e.g. tenderer's address is reserves the right to waive initialing and amended b over-writin but not initialed acce t tender. Page 30 RFP348-2009 Consulting and Related Services for the Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for the Supply of Natural Gas 8 INDEPENDENT CONSULTANT AGREEMENT This Agreement made and entered into by and between the Regional Municipality of Durham (hereinafter called "the Region") and (hereinafter called `the Consultant" ) WHEREAS The Region has called proposals for the provision of services: The Consultant has offered to supply such services and the Region and the Consultant have agreed upon the provision df the services upon the terms and conditions contained in this Agreement. IT IS AGREED 1.0 INTERPRETATIONS 1.1 In this Agreement unless the context otherwise requires: "Agreement" means this agreement and includes Schedules and any annexes or documents incorporated by reference; "Consultant" means the person or company so named in the Description of the Parties at the commencement of this document; "Consultant's Representative" means the person appointed by the Consultant to represent the Consultant for the purposes of this Agreement and so identified in Schedule 1 or such person as may be appointed subsequently by the Consultant and notified to the Region in writing; "GST" means any tax imposed under GST legislation; "Project Service" means the services described in Schedule 2 which are to be performed by the Consultant in accordance with this Agreement; "Request for (Proposal" means the document issued by the Region seeking offers for the provision of the Project Services which document is incorporated into Schedule 2 to this Agreement. 1.2 A recital, schedule, annex or a description of the parties forms part of this Agreement. 1.3 In this Agreement unless a contrary intention appears words imparting a gender include any other gender and words in the singular includes the plural and vice versa. 1.4 Clause headings in this Agreement are for the convenience of reference only and have no effect in limiting or extending the language of the provisions to which they refer. 1.5 This Agreement shall be governed by the Laws of the Province of Ontario. Page 32 RFP348-2009 Consulting and Related Services for the Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for the Supply of Natural Gas The Consultant shall provide the Project Services, which shall conform to the Performance Standards and meet all other requirements set out in Schedule 2. 9.0 FEE FOR PROJECT SERVICES The Region will pay tf,e project fees to the Consultant as specified in Schedule 3 for the Project Services completed orl a project or monthly basis. 10.0 CONSULTANT'S LIABILITY The Consultant shall defend, indemnify, and hold the Region, its officers, employees, and agents harmless from and against any and all liability, loss, expense (including reasonable attorney's fees), or claims for injury or damages that are caused by or result from the negligent or intentional acts or omissions of the Consultant, its officers, agents or employees. 11.0 INSURANCE 11.1 The Consultaht, at its sole cost and expense shall insure its activities in connection with the work under this Agreement and obtain, keep in force, and maintain insurance as follows: 11.1.1 The Consultant shall maintain and pay for Comprehensive General Liability Insurance including premises and all operations. This insurance coverage shall be subject to limits of not less than $ 3,000,000 inclusive per occurrence for third party Bodily Injury and Property Damage or such coverage or amount as may be requested. The policy shall include the Region as an additional insured in respect of all operations performed by or on behalf of the Consultant. A certified copy of such policy or certificate shall be provided to the Region prior to commencement of the work. 11.1.2 Business Automobile Liability Insurance for owned, scheduled, non-owned, or hired automobiles with a combined single limit not less than $ 1,000,000 per occurrence. REQUIRED ONLY IF THE CONSULTANT IS DRIVING ON REGIONAL PROPERTY IN THE COURSE OF PERFORMING WORK FOR THE REGION. 11.1.3 Professional Liability Insurance with a limit of $ 1,000,000 per occurrence. If this insurance is written on a claims-made form, it shall continue for three years following termination of this Agreement. The insurance shall have a retroactive date of placement prior to or coinciding with the effective date of this Agreement. 11.2 It shall be expressly understood that the Insurance coverage and limits referred to above shall not in any way limit the liability of the Consultant. The Consultant shall furnish the Region with certificates of insurance evidencing the compliance with all requirements prior to commencement of work under this Agreement. Such certificates shall • Provide 30 days advance notice to the Region of any modification, change, or cancellation of any of the above insurance coverage. • Indicate that the Region has been endorsed as an additional insured under the coverage referred to in section 11.1.1 • Include a provision that the coverage will be primary and will not participate with nor be excess over any valid and collectible insurance or program of self insurance carried or maintained by the Region. Page 34 RFP348-2009 Consulting and Related Services for the Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for the Supply of Natural Gas 19.0 CHANGES TO THIS AiGREEMENT Changes to this Agreement will only be made by agreement in writing by both Parties 20.0 INDEPENDENT CONTRACTOR The services defined in this Agreement will be performed by the Consultant as an Independent Contractor at arms length from, and not as an employee of the Region. 21.0 PURCHASE ORDER OR STANDING AGREEMENT Prior to commencement of any service covered by this Agreement a Regional Purchase Drder Number or Standing Agreement Number must be granted by the Region's Purchasing Section. No contract exists without this Purchase Order or Standing Agreement Number. This number must be referred to on all correspondence and invoices. CONSULTANT Signature Date THE REGIONAL MUNICIPALITY OF DURHAM Signature Date Commissioner of Finance and Treasurer Title Page 36 RFP348-2009 Consulting and Related Services for the Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for the Supply of Natural Gas SCHEDULE2 PROJECT SERVICES (Project Services may be described in detail or referred to as those services set out in the Request for Proposals including the projecfbrief and the Proposal, which documents should be incorporated into this schedule. It is recommended that at least the Project Brief be incorporated and the documents may be incorporated by reference.) 1.0 The consultant shall furnish to the Region the following services: 2.0 The Project Servicesjare specified in the following documents, which documents are hereby incorporated into this agreement: 2.1 The Request fior Proposals { }for{ }dated { } 2.2 The Consultants Proposal dated { } 2.3 The following documents which modify the original specifications: {insert the applicable documents} 3.0 REPORTS/DELIVERABLES The Consultant shall provide the reports described below: {List the reports to be,provided as well as the schedule} 4.0 WORK PLAN {Set out the delivery dates or milestones to be achieved} Page 38 RFP348-2009 Consulting and Related Services for the Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for the Supply of Natural Gas 9 APPENDIX "A" AGENCIES' 2008 GAS CONSUMPTION Aaencv: DPA #~ Consumption* Delivery Point: End of Term: (Cubic Meters): Mun. of Clarington: xxxxxx 1,043,887 CDA Oct 31, 2009 Durham Region: xxxxxx 2,321,938 Empress Oct 31, 2009 Durham Region: xxxxxx 5,442,811 CDA Oct 31, 2009 Totals: 8,808,836 Page 40 RFP346-2009 Consulting and Related Services for the Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP346-2009 Consulting and Related Services for the Supply of Natural Gas 77 DIRECT DEPOSIT AUTHORIZATION FORM Number fiat Company Contact Information. Company Name PresidenUOwner Address GST Registration # Accounting Contact Name Title/Position Phone # Fax # E-mail pngarm~ap ~ - 6~e~ ~r ant m~tt~O~ltuotu def~uis. Effective Date Ban king information Financial Institution Name Financial Institution Address Bank Number O "" l~~lE A~"1o-i01°9 ~a ~d~~D'° C(r91ia~~C~s Transit Number Account# ~~~~~~~a~~~~ 1 hereby authorize The Reoional tvlunicioality of Durham to confirm my banking information by contacting the aforementioned financial institution. I also authorize them through the Royal Bank of Canada, to make deposits to my bank account. This authorization will remain in effect until cancelled or changed in writing. Vendor Signing Officer Vendor Signing Officer Date (mmlddlyy) (Print Name) (Signature) (11!05) F25 Company information is collected under the authority of the Municipal Freedom of Information and Proteclion of Privacy Act and will be used to authorize the direct deposit of your payment. Questions about this information should be addressed to: Expenditure Management, Finance Dept., The RegionalMunicipaliry of Durham, PO Box 710, 605 Rossland Road, East, Whitby, Ontario, Li N OAa. Page 42 RFP348-2009 Consulting and Related Services for the Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for the Supply of Natural Gas Curront month day, year Vendor Name Vendor Address Line 2 LEne 3 Attention: Accounts Receivable Dept. Dear Vendor, As part of our continuing efforts to increase the efficiency in processing vendor payments The Regional Municipality of Durham has implemented a direct deposit payment system for its vendors. As a Regional vendor enrolled on this system you will benefit by faster receipt of funds and reduce your processing time for bank deposits. Enrolment in the Region's direct deposit program can be easily accomplished by supplying us with your company's designated bank account information. Please complete and have an authorized representative of your company sign the attached direct deposit application form. A voided company cheque must also be attached to the application. Please mail the originals to the address listed below. Should you require assistance in completing this form you may contact our office or speak with your designated bank representative. The Region of Durham c/o Expenditure Management,', Finance Dept. PO Box 710 ', 605 Rossland Road, E. Whitby ON L1N OA9 After Expenditure Management receives your application, we will be in touch with you to validate your information. After validation, it will take approximately five business days to process your application before payments can be made to your company's designated bank account. Under the direct deposit program, you will receive a payment advice by mail from the Region of Durham for each payment that is deposited into your company's bank account. These advices will be clearly labeled `Direct Deposit. To ensure timely processing of your payments, it is critical that you forward all original invoices, in a timely manner direct/ to Expenditure Management, to the address listed above. All invoices presented to the Region of Durham must display a valid Purchase Order number, identify locations to which the goods were shipped or where services were provided and list the name (if applicable) and department of the Regional employee with whom the transaction was completed. For further assistance please call Expenditure Management at (905) 668-7711 ext 2497. All company banking information collected by the Region, under the provisions of the Municipal Freedom of Information and Protection of Privacy Act will only be used to make direct deposit payments to your company's bank account in payment of amounts owing. Sincerely, ............................................ Dan Dzikewicz Manager, Accounting 001(12/08) Page 44 Regional Municipality of Durham Request for Proposals RFP 348-2009 CONSULTING AND RELATED SERVICES FOR THE SUPPLY OF NATURAL GAS FOR THE REGION OF DURHAM AND THE MUNICIPALITY OF CLARINGTON ADDENDUM NO. 1 -MAY 20, 2008 This addendum will form a part of the Documents for the above-noted RFP and shall be read in conjunction therewith. This addendum will take precedence over all requirements of the original RFP Documents and any addenda issued previously. Bidders shall acknowledge receipt of this addendum number on Subsection 5 of the "Form of Proposal" and also sign and return it with the completed RFP submitted. If, in the opinion of the Region, the addendum issued effects the price of the RFP and the addendum is not returned dr acknowledged in the "Form of Proposal" then the RFP submitted will be deemed non-compliant and rejected. If, in the opinion of the Region, the addendum does not effect the RFP price and it is not submitted with the RFP or acknowledged in the "Form of Proposal" the bidder will be allowed two working days to submit the missing signed addendum to the Region of Durham Purchasing Section. The following Sections or Subsections are amended to read as follows: 2.3.5 Fees The Respondent shall propose a Fee, excluding GST, in consideration of the services to be performed and all costs thereof, based on a fixed mark up price (in Canadian funds) per 1000 m' of natural gas used by the Agencies throughout the Contract. (The fee will be incorporated in the Enbridge monthly bills). The Fee shall be held firm for the entire duration of the Contract, including the optional two years if these are awarded. If the Respondent has already retained asub-consultant to provide the services, then the current applicable fees that would be charged directly to the to Agencies under that agreement, expressed per 1,000 M3 of natural gas consumption, must also be provided in the applicable space in Revised Subsection 5.2.1.2 'Subsection 2.3.5 Revised per Addendum 1 RFP348-2009 Consulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas 5.2 SUBSECTION 2: FEES AND PROPOSED CONTRACT CHANGES* 5.2.1 Proposed Fee Respondents shall complete Subsection 5.2.1.1, and Subsection 5.2.1.2 if applicable 5.2.1.1 Respondent's Proposed Fee The Respondent shall propose a Fee in the space below excluding GST, in consideration of the services to be performed and all costs thereof, based on a fixed mark up price (in Canadian Funds) per 1000 m' of natural gas used by the Agencies throughout the Contract term. (The Fee will be incorporated in the Enbridge monthly bills and shall exclude applicable sub-consultant's fees that would be charged directly to the Agencies under Subsection 5.2.1.2, unless both fees are incorporated with the Respondent's proposed fixed Fee below). $ per 1000 Cubic Meters 5.2.1.2 Applicable Sub-consultant's Fee Where the Respondent has already retained a natural gas consultant to provide the services required under this RFP, and a portion of the cost of those services would be charged directly to the Agencies (on Enbridge invoices or otherwise) and .not incorporated with the Respondent's proposed Fee under Subsection 5.2.1.1, calculate and enter the current applicable fees or costs below (excluding GST, in Canadian funds), expressed per 1000 m' of natural gas consumed. $ per 1000 Cubic Meters 5.2.2 Proposed Contract Changes Respondents shall attach any proposed changes to the Bid Document terms and conditions to this Subsection, if applicable. Note that the Proposal fees wilt not be publicly announced at the Proposal opening meeting. * Section 5.2 Revised per Addendum 1 Name of Bidder: Page 24 (R) Mav26, 2009 Proposal Response RFP348-2009 Consulting and Related Services for the Supply of Natural Gas Prepared for: The Regional Municipality of Durham and the Municipality of Clarington Prepared By: BLACKSTONE 1 ENERGY S E R Y I C E S I N C .Table of Contents 1 BACKGROUND 1 1.1 Proposal Description 2 UNDERSTANDING OF REQUIREMENTS SECTION 2.3.1 of RFP) 2 Objectives, Scope, Tasks, Services, Deliverables, and Reporting Requirements 2 Understanding the Needs of the Municipal and Public Sector (Procurement, Budget Management, Risk Management, Administration) 3 Ulnderstanding of Enbridge and ENTRAC Billing and Distribution Systems, Ontario Sector Naturat Gas Delivery and Distribution Models and Related Governing Legislation 4 Ontario Sector Natural Gas Delivery and Distribution Models 6 Related Government Legislation 6 Understanding of Natural Gas Commodity Market Fundamen tals, Distribution and Supply Chain Future Contracts Portfolio Management; and NAESB Documentation 7 Distribution and Supply Chain 7 .Futures Contracts Portfolio Management 7 NAESB Documentation 8 3 METHODOLOGYAND MANAGEMENT PLAN 9 Proposed Service Model 9 Methodology and Management Plan 9 Initial Account Profiling 10 Provide Liaison Services with Natural Gas Suppliers 10 Proposal Solicitation and Qualification 11 Transaction Execution 12 Documentation and Reports to Demonstrate Financial Management and Commodity Market Information and Analysis 12 Liaison Services with Enbridge Gas 14 An Explanation on How the Above Service Model, Methodology and Management Plan will Accomplish the Objectives of the RFP14 Organizational Chart of Personnel Assigned 16 Value-Added Services 16 4 EXPERIENCE, STAFFING, QUALIFICATIONS AND PRICE PERFORMANCE TRACK RECORD (SECTION 2.3.3 of RFP) 18 Blackstone's Advisory 8 Brokering Model -Truly Unique) 18 References 19 Price Performance Track Record and Overall Track Record 20 Price Performance Compared to Enbridge 20 Staffing Qualifications 20 5 FINANCIAL CONDITION, CAPACITY, AND INTEGRITY 24 6APPENDICES 25 Appendix I: Ontario Sector Natural Gas Delivery & Distribution 25 Appendix II: Distribution and Supply Chain 26 Appendix III: Personnel Assignment for Regional Municipality of Durham and Municipality of Clarington 27 Appendix IV: Energy Management Platform (EMP) 28 7 FORM OF PROPOSAL 29 BLACKSTONE BLACKSTONE 6tEt6Y SERVICES Itt 1 Background Background 1.1 Proposal Description The purpose of this proposal is to provide details on how Blackstone Energy Services Inc. ("Blackstone") can assist the Region of Durham and the Municipality of clarington (the "Agencies`) in managing their natural gas portfolio. Blackstone hopes to demonstrate that it is more than qualified to meet the Submission Requirements as outlined in Section 2.3 and the Smpe of Services as outlined in Section 4.3 of the RFP. In addition, Blackstone will provide background on unique elemen# of our business model that would benefit the Agencies' management of natural gas in the future. Blackstone appreciates the opportunity that is provided in Section 2.3.2 (Methodology and Management Plan) whereby the Agencies allow for explanation of other value added services. We intend to provide ideas and strategies that more traditional offerings in the marketplace would not necessarily provide (consultants and buying groups included). It is our intention to demonstrate that these ideas will bring both financial return and Intangible value to the Agencies. In summary, Blackstone feels that our unique consulting model combined with low risk strategies and ideas not readily available elsewhere will deliver a compelling response to this RFP. Note: section 2.1 of the RFP reques# we cleorfy identify our web address. Pleose see below; www.b lackstoneenergy.com BLACKSTONE BLACKSTONE EMEg6Y SEBYI GES IMS i ~, UNDERSTANDING OF REQUIREMENTS [Section 2.3.1 of RFP) UNDERSTANDING OF REQUIREMENTS (Section 2.3.1 of RFP) Objectives, Scope, Tasks, Services, Deliverables, and Reporting Requirements It is understood that the Agencies are in search of a professional, unbiased and impartial entity to assist in managing their respective natural gas portfolios. Management of the portfolio must include expertise in natural gas market fundamentals (supply, demand, global economic factors, relationship to other commodities, currencies, weather, etc) and market participants (suppliers and utilities). The Agencies have come together to maximize purchasing power. However, it is recognized that while procurement exercises will achieve this, it is still prudent and beneficial to deliver a service model that respects the autonomy of each Agency (as it pertains to budgets, risk tolerance, reporting requirements and various administrative functions). The services provided will be all encompassing as it pertains to the daily management of a large, public sector natural gas portfolio with multiple locations. Blackstone recognizes that procurement, transaction execution, supplier screening, market intelligence, and hedging recommendations will be important elements in managing the Agencies' portfolio. In addition, compliance with the Local Distribution Company (Enbridge) and its requirements will be needed to ensure delivery of supply, avoid penalties and fulfill any balancing obligations. The Agencies also expect to gain financially by participating in the deregulated markets. Tracking performance to Enbridge rates will be as important as tracking performance to budget. Deregulated gas markets bring opportunity. However, there is also risk involved with such a volatile commodity. For this reason, the proper reporting functions are essential. Especially those that offer timely information to better plan and proactively take action to meet annual objectives. These objectives could include not exceeding budgets, outperforming Enbridge rates, and minimizing the impact of balancing transactions. Access to well structured reports will have many advantages: assurance of financial integrity of all activities, expenditures, and transactions; an advantageous resource to plan ahead and avoid volatility in cash flows or costly balancing transactions; lastly, they are able to provide valuable information to isolate unexpected consumption outcomes that may impact budgets and forecasts. 2 BLACKSTONE BLACKSTONE EYEA6A SEAy1CE4 INC UNDERSTANDING OF REQUIREMENTS (Section 2.3.1 of RFP) Understanding the Needs of the Municipal and Public Sector (Procurement, Budget Management, Risk Management, Administration) Blackstone has been providing advice and services to clients in the Public Sector since our inception. In fact, references provided include organizations from the Public Sector. We feel our experience in working with the Region of Durham and the Municipality of Clarington is also noteworthy. We strongly believe all parties have gained from working together, ourselves included. Blackstone recognizes the needs of Public Sector clients can be different from the Private Sector. Procurement initiatives must balance competitive pricing with credit worthy suppliers. Supplier diversity is important to ensure gas is uninterrupted. And, a suppliers capability and willingness to accommodate the administrative requirements of the Agencies (ie. ABC Billing) is relevant and necessary. Budget Management poses the challenge of balancing market risks and fundamentals that look forward up to five years with the annual budget reality that governs most public sector entities. Most consider budget management as the need to focus on the price of the commodity. Blackstone recognizes that both price and actual consumption must be considered to understand how best to manage the budgets of the Agencies. This is especially more crucial when conservation projects are prevalent as any success in conservation can easily be mitigated by over hedging supply in the market place (leading to costly and unnecessary balancing transactions). The main components of risk for the Agencies are market risk (price volatility), supply risk (supplier's ability to deliver), balancing risk (Agencies' obligation to deliver the gas they consumed) and budget risk. All four components are linked. The research, analysis, management and reporting functions must be structured to best mitigate these risks on behalf of each Agency. Administrative duties must take into account all contract and transaction details (consultants, suppliers, utilities inclusive). Proper backup of any hedging, balancing or rate plan decisions is necessary. The reasoning, justification and background of decisions made between advisor/consultant and each Agency must be well documented. Procedures for collection, verification and distribution of relevant documents and statements must ensure that administrative functions are performed in a timely, accurate and well organized manner. lastly, it is imperative that financial integrity is maintained in all reporting. Money flows must be well documented and reports must be accurate and useful to minimize any cash flow volatility that is possible in an ABC billing format. 3 BLACKSTONE BLAGKSTONE ENEN6Y SENYICES INC UNDERSTANDING OF REQUIREMENTS (Section 2.3.1 of RFP) Understanding of Enbridge and ENTRAC Billing and Distribution Systems, Ontario Sector Natural Gas Delivery and Distribution Models and Related Governing Legislation EnTRAC and Enbridge Billing Systems Blackstone has been a registered user of EnTRAC since 2004. In fad, Blackstone participated in the initial steering committee efforts to design and integrate the functionality required by industry participants to better serve end users (such as the Agencies). EnTRAC is essential in managing client accounts and ensuring cohesion amongst the Client, Advisor and Utility. Managing the flow of gas (nominations), remittances, pool balances, load balancing, checkpoints and account changes are all necessary elements of managing client portfolios. EnTRAC offers the capabilities to handle these tasks in a tiMely and productive manner. The Agencies' accounts are under the "ABC"billing arrangement offered by Enbridge. This billing arrangement is very convenient for the Agencies as it allows for each location to be billed directly for gas consumed. However, the nature of ABC billing is spmewhat complex in managing financial and volumetric variances. As such, Entrac is a useful tool that helps analyze monthly data for reporting purposes. A, detailed report on ABC biling and how EnTRAC is used to understand the details had been provided to each Agency in January, 2009. A summary of that explanation is provided below ABC is defined as Agency, Billing and Collection. The customer is billed for actual usage in each month at the rate agreed upon between the supplier and customer (Price on Bill). The utility also invoices for other services (transportation, delivery, miscellaneous) on the same invoice. From the customer's perspective, ABC Billing offers simplicity in terms of one single invoice, paid to the utility directly, at a rate agreed upon between supplier and customer. In addition, customers with multiple locations enjoy the added benefit of receiving separate invoices for each location based on actual consumption. The visuals below illustrate the ABC model: BLACKSTONE BLAC KSTO N E ENEN6i $EN$ICE3 INC UNDERSTANDING OF REQUIREMENTS (Section 2.3.1 of RFP) ABC Billing Mechanics ContractAmt$ Delivery Process Illustrated Forecast Consumption / Withdrawal Daily Volume Actual Consumption / Injection ` + ~/ `~, Understanding the Tracking Complexities of ABC Biging On the surface, ABC Billing is fairly easy to understand as described above. However, the actual analysis and ongoing tracking required to accurately understand the customer's financial and volumetric variances is cumbersome and complex. The reasons are as follows: - Price on 8il! is typirolly not the Actual Price of the Commodity - as such, the financial variance that may result will need to be tracked to ensure the underlying supplier receives all funds owed for the gas delivered. Volume of gos controlled may not be Actual volume consumed -the general consensus among customers is these balancing transactions are costly and generate financial losses. In most cases this is correct because the customer is 5 Contract Amt $ ContraR Amt $ + unary t7~aige, 11 BLACKSTONE BLACKSTONE ENEMY S E N Y I C E 5 I N C UNDERSTANDING OF REQUIREMENTS (Section 2.3.1 of RFPJ not receiving proactive advice or assistance from their supplier to manage the. volumetric variance between aMual consumption and contracted supply. Billing Adjustments and Utility Contract Reconciliations must be tracked separately-The utility has specific rules that it must follow in terms of credits and billing adjustments. These items impact the financial variance and therefore must be tracked to calculate the customer's ultimate financial position. Connecting the dots with Entrac EnTRAC is the database for all Enbridge client information (both past and present). The data available in EnTRAC is used to build and customize useful reports that help clients understand their financial and volumetric positions and obligations. Blackstone will provide further detail on these reports when addressing the "Methodology and Management Plan". Ontario Sector Natural Gas Delivery and Distribution Models PLEASE SEE APPENDIX 1 FOR INFORMATION THIS SECTfON. Related Government Legislation The Ontario natural gas market has been deregulated since 1985. The markets are regulated by the Ontario Energy Board (as mandated by the Ontario Energy Board Act is9s/. The Ontario Energy Board's functions with respect to natural gas are threefold: - to enforce the rules governing the natural gas markets policy development - ensure all participants comply with all decisions, rules and legislation As a participant in the natural gas markets, the Agencies are in a sense served by the Ontario Energy Board. Ongoing activities include ensuring there is a competitive marketplace for supply, reliability of transmission and distribution systems, and protecting the interests of end users. The Local Distribution Companies (such as Enbridge Gas) and natural gas suppliers must comply with the Ontario Energy Board's rules and regulations. 6 tiLACKSTONE BLACKSTONE ENERGY SERVICES INC UNDERSTANDING OF REQUIREMENTS (Sect/on 2.3.! of RFP) Understanding of Natural Gas Commodity Market Fundamentals, Distribution and Supply Chain Future Contracts Portfolio Management; and NAESB Documentation There are a number of factors that drive natural gas prices. Drivers can be broken down into two distinct categories. They are Underlying Fundamentals and Technical/Correlation Data. Fundamentals represent the longer term outlook for natural gas. However, it is also important to understand technical data and other data points that are highly correlated to natural gas prices. These data points can help explain the potential direction and velocity of shorter term and medium term price movements. The following items represent natural gas fundamentals: Supply Storage Levels Weather Rig Activity Electricity Demand The Economy Industrial Demand Production New Discoveries Liquid Natural Gas (LNG-imports, liquefaction capacity, shipping capacity) The following items represent technical/correlation data that help understand direction and potential velocity of direction of natural gas prices: Correlation to Crude Oil Prices Foreign Exchange Geopolitical Events The Cooling Season in Texas and Florida The Heating Season in the Midwest Distribution and Supply Chain A thorough explanation of the natural gas supply chain is provided in the Methodology and Management Plan Section. PLEASE REFER 70 APPENDIX II FOR ADDITIONAL INFORMATION ON SUPPLY CHAIN. Futures Contracts Portfolio Management The natural gas markets are priced on a rolling 5 year curve. Also known as the "natural gas futures market", the 5 year curve is broken down into 60 monthly contracts. 7 1 BLAGKSTONE It BLAGKSTONE EAEAAt SEAMItF5 IAC UNDERSTANDING OF REQUIREMENTS (Section 2.3.1 of RFP) The futures market drives the prices that individual suppliers will offer to end users. It is important to note that the futures market is one component that makes up the final price suppliers will offer (other factors include the supplier's exposure and position in the market for various terms, their credit rating, quality of supply, margins, production/distribution network and credit assessment of the client). As pertains to portfolio management, the Agencies have the following options to consider when buying supply: Enter a fixed price arrangement (from 1 to 60 months or anything in between) "Float" the market on index gas (the cost of gas is based on the average price for the month the gas was used) Utilize a combination of the above for different percentages of annual consumption Proper portfolio management will combine the following elements: Understanding the short, medium and longer term objectives of the Agencies is necessary. items such as budget projections, consumption patterns, risk tolerance and conservation initiatives will all play a role in how much supply to buy, which supplier to use, and the term of any forward or fixed price contras . NAESB Documentation There are two NAESB (North American Energy Standards Board) agreements that are relevant to the Agencies: Contras for Purchase and Sale of Natural Gas and the Canadian Addendum. The Contras for Purchase and Sale of Natural Gas was established in early 2002. It is a revision from a standard natural gas contras approved by the Gas Industry's Standards Board (GSIB). The GSIB is NAESB's predecessor. This contract was developed to meet the needs of the natural gas industry for documentation that can be used for various transactions between Buyers and Sellers. The Canadian Addendum allows companies that do business in Canada and the United States to use the NAESB contras for transactions. NAESB was formed in December, 2001. It is a requirement for all Buyers and Sellers to execute NAESB contracts when transasing for natural gas. Blackstone has had experience with these documents since their development. We have helped facilitate contract execution and adjustments between our clients and natural gas sellers. As participants in the natural gas industry since the mid 80's, Blackstone's Management has worked with both NAESB and GSIB documentation and is very familiar with both. 8 ~ B L A C K S T O N E METHODOLOGYAND MANAGEMENT PLAN ~BLACKSTONE . E M E t 6 Y S E R V I C E S I M C 3METHUDOLOGY ~ AND MANAGEMENT PLAN METHODOLOGYAND MANAGEMENT PLAN Proposed Service Model Blackstone is proposing Option 1 (Consultant/Agent Service Model). We believe this is the most appropriate model for the Agencies as it best fulfills the requirements and expectations outlined in the RFP. Blackstone can offer a level of individual service that frankly is not possible with the other service models considered in the RFP. We ask the Agencies to carefully consider the detailed and customized approach we take in managing client energy portfolios as described in this section. In the Methodology and Management Plan Section, we will also articulate some reasons why we believe the other Options requested are not sufficient to achieve the objectives of the Agencies as described in the RFP. In addition, Blackstone wishes to express with conviction that the value added services explained in this section will offer significant financial and intangible benefit to the Agencies. As the existing Advisor for Durham and Clarington, we have not had the opportunity to explore value added services in detail. We ask that the Agencies Seriously consider the additional benefits these services can bring. Methodology and Management Plan (Blackstone will perform the following services in order to accomplish the objectives of tjhe RFP (a detailed description for each service is also provided). Some of the services explained here are already in place for Durham and Clarington. The detail given should satisfy the requests made in Section 4.3 (Scope of Services) and Section 2.3.2 (Methodology and Management Plan). Services 1. Initial Account Profiling 2. Liaison with Natural Gas Suppliers a. Background on Supply Chain b. Proposal Solicitation and Qualification c. Transaction Execution 3. Reporting a. Market Intelligence Report b. Pricing Updates and Account Specific Analysis c. Financial & Volumetric Variance Summary d. YTD Actual/Forecasted Detailed Variance Summary e. Semi-Annual and Annual Portfolio Report 4. Liaison with Enbridge Gas 9 BLACKSTONE BLACKSTONE ENER6t SEl VICES IMC METHODOLOGYAND MANAGEMENT PLAN METHODOLOGYAND MANAGEMENT PLAN Initial Account Profiling Blackstone had completed initial profiling for Durham and Clarington in September, 2008. However, the profiling completed in 2008 was heavily weighted to a short term agreement that was to expire in 2009. Some of the items in this stage are already complete. However, Blackstone believes it will be prudent and necessary to reassess the Profiling stage with the new multi-year time horizon that will be in place post award. Initial Profiling will be conducted as follows: - Meet with key individuals responsible for procurement and energy management to understand existing policies, hedges, supply agreements, and strategies that are in place gain an understanding of the Agencies' natural gas risk and procurement profile; review and discuss individual Agency risk tolerance and budget objectives. All of the above must be reassessed in the context of a new, multi-year Consultant/Agent service model. Provide Liaison Services with Natural Gas Suppliers Background on Supply Chain Blackstone is confident that no other Advisor/Consultant in the Canadian market provides the level of supplier access, diversity, credit and pricing transparency that Blackstone is known for. 1vVith access to dozens of suppliers across North America, Blackstone can gain valuable information on price movements, trends, financial status of suppliers and industry insight that will help determine the most appropriate strategies for the Agencies. There are a multitude of factors that determine prices in the North American natural Qas market. Many of the factors are not immediately recognizable to end customers. Supplier pricing is based on many factors including (but not limited to): suppliers own hedges in their trading book, the strength of their balance sheet, cash flows, their credit rating, the end customer profile and soon. The spread on pricing available to end users on any given day can range from $0.20/GJ (approx. $0.01/m3) to over $0.80/G1 (approx. $0.03/m3). In fact, some suppliers have strengths and weaknesses at various delivery points and even for certain sized customers. All of these factors impact the wide range of pricing noted here. This means the Agencies, without proper access to the market can be exposed to a potential additional spend of 588,000 to $264,000 annually for natural gas (based on consumption data provided in the RFP). 10 ~ttLACFtSTONE ~BLACKSTONE E M E A 6 T S E A M I C E S I M C METHODOLOGYAND MANAGEMENT PLAN METHODOLOGYAND MANAGEMENT PLAN Proposal Solicitation and Qualification Blackstone is constantly gauging the marketplace for the best available prices, terms and credit ratings of the suppliers. In the long run, we will provide a level of competition, transparency and financial integrity that will not be available from other Vendors. Our model has become even more relevant to the procurement community given the recent financial crisis and the threats imposed across all industries due to lack of credit and mismanagement of risk. A number of factors are considered when Blackstone makes a recommendation to a client. They include: - Matching the client profile with supplier reputation and profile (for example, the Agencies required a credible, well recognized supplier in 2008 based on Sem Canada's bankruptcy- BP Canada fit the criteria the Agencies required at the time. - Supplier pricing and delivery capabilities at different Delivery Points Supplier credit ratings - Accuracy and timeliness of contracts (NAESB documentation),transaction confirmations and credit approvals - Accuracy and timeliness of indicative quotations - Other services that maybe relevant to a specific client (ie. Transportation fuels, electricity hedges, etc) The following suppliers are a good sample of who Blackstone is working with today on behalf of its clients: BP Canada Shell Canada RBC Dominion TD Energy Gibson Energy Transaka Superior Energy Integrys SocGen AltaGas Husky Energy Nexen Suncor Energy Talisman Energy ETNA Energy Emera Energy Active Energy MF Global Blackstone strongly believes the Agencies will benefit through better prices, secure supply, supplier diversity and less overall risk. 11 ~BLACKSTONE ~BLACKSTONE . EpEp6T SERVICES Ipf: METHODOLOGY AND MANAGEMENT PLAN METHODOLOGY AND MANAGEMENT PLAN Transaction Execution Blackstone will execute all supply transactions on behalf of the Agencies. Both Durham and Clarington have been privy to Blackstone's rigorous trade execution and confirmation procedures. A detailed summary of our procedure is provided below: Ensure the Agencies and Suppliers have executed and approved relevant trading authorization documentation - Receive indicative pricing via email and/or instant messaging platforms - Communicate prices and receive approvals from the Agencies (in writing) to proceed with the transactions - Execute the trade, confirm in writing final prices, terms, delivery points, etc with supplier and communicate via email to the respective Agency Receive and verify transaction confirmation from Suppliers, authorize internally via Management and the respective Portfolio Manager - Input transaction details into Onyx (Blackstone's internal portfolio management engine) - Distribute final transaction confirmation to the respective Agency Documentation and Reports to Demonstrate Financial Management and Commodity Market Information and Analysis One of Blackstone's key strengths is it ability to complement advice, recommendations and procurement strategies with reports that are relevant to the customer. Both Durham and Clarington have been privy to these reports in the last few months. Blackstone's reporting tools are tailored to the client's billing, consumption and account structure profile. For example, with respect to the Agencies"'ABC" billing format, Blackstone has created a report that clearly shows any financial or volumetric variances on a monthly basis. This monthly snapshot will help minimize significant (and usually costly) balancing transactions that occur at the end of each gas year. The Agencies will have the ability to think about balancing well ahead of traditional timelines and act when it is in the Agencies' favour as opposed to when the industry dictates. These reporting tools will also help minimize the volatility of cash flows and Price on Bill adjustments. The items listed below will be provided for Reporting and Analysis purposes. An explanation of each item and frequency of delivery is also provided. Blackstone is confident the suggested items meet the needs of the Agencies based on the request made in the Smpe of Services. Please see below: 12 BtACKSTONE BtACKSTONE ERER6r SERVICES IRC METHODOLOGYAND MANAGEMENT PLAN METHODOLOGYAND MANAGEMENT PLAN glackstone's Market Intelligence Report (weekly) SAMPLE PROVIDED • Review of the week's events specific to natural gas, electricity, oil transportation fuels and the economy Pricing Updates and Account Specific Analysis (as requested) • Blackstone's unmatched access to natural gas trading desks in Toronto, Calgary, New York and Houston can offer live quotes from dozens of suppliers on request Financial & Volumetric Variance Summary (monthly) SAMPLE PROVIDED • Tracks financial variance (Price on Bill) and it's forecasted impact on end of gas year balancing and cash flows • Tracks volumetric variance (actual consumption vs. contracted MDV) and iYs forecasted impact on end of gas year balancing • Easy to follow detail on Price on Bill adjustments and Balancing transactions • Excellent source for monitoring budgets and consumption • Eliminates year end surprises in terms of cash flow and buying/selling to balance pools -Blackstone and the Agencies have more visibility on forecasted variances and can act anytime during the gas year when ,markets favour the Agencies YTD Actual/Forecasted Detailed Variance Summary (monthly) SAMPLE PROVIDED • More detailed tracking of all aspects of contracted supply, actual consumption, utility remittances, credits, adjustments, etc • An easy to understand resource to manage the complexities of ABC Billing • Excellent resource for auditing purposes • Complete transparency and visibility into your financial, volumetric and utility account status within each gas year Market Trend Review & Recommendations (semi-annual or as needed) • Blackstone monitors the markets daily for price and supply strategy opportunities- asemi-annual address will be provided; however, Blackstone 13 ~BL AC K S T O N E ~BL AC K S T O N E E M E R 6 Y $ E R Y I C E S I R C METHODOLOGYAND MANAGEMENT PLAN METHODOLOGYAND MANAGEMENT PLAN may offer solutions more frequently if deemed to be in the best interest of the Agencies Blackstone's Special Reports and Market Commentary (as published) • Covers trends and influences on energy procurement • General economic analysis on inflation, currencies, commodities and the relationship to energy prices • Industry news and updates from energy conferences attended by Blackstone Liaison Services with Enbridge Gas Another important aspect of Blackstone's offering is our expertise in working with the utilities. Blackstone has always strived to understand the inter workings of the utility to maximize any benefits available to our customers. There are numerous rules, regulations, rate plans and account management details that require eMensive knowledge of the utility's operation. Blackstone feels more than capable on managing this relationship on behalf of the Agencies. This is a quote from a Manager at one of Ontario's Utilities "8lackstone has reinvented the traditional energy management approach. 8lackstone Energy's business model has set o new standard for energy commodities management" Michael Cadotte, Manager, Supply & Transportation Group, Union Gas Limited This following is a list of daily items we handle on behalf of our clients through Entrac and/or Unionline (Union Gas EnTRAC equivalent): Nominations, Account and Site Deletions/Additions, Managing Pools, Balancing, Invoice Verification, Consumption Analysis, Remittances, and Rate Analysis. NOTE: 8lackstone has provided additional information on our experience and expertise with Enbridge and EnTRAC in Section 4 of this Proposal (Experience, Staffing Qualifications, Price Performance). Methodology and Management Plan will Accomplish the Objectives of the RFP An Explanation on How the Above Service Model, The description of services provided above provides the Agencies with detailed information on how Blackstone intends to manage the Agencies' portfolio. Blackstone 14 BLACKSTONE BLACKSTONE ENEN6t SENy1CE5 INC METHODOLOGYAND MANAGEMENT PLAN METHODOLOGYAND MANAGEMENT PLAN believes we are best equipped to manage the objectives of the RFP using this proven method (as described above). The objectives established in the RFP will be met as follows: 8lackstone's impartiality in the marketplace will not create bias towards any supplier, hedges, terms, conditions or prices Our ability to match client profiles with creative portfolio strategies (with respect to supply, utility rate plans, delivery points and balancing) will bring financial benefit Our stringent and active procedures for scrutinizing suppliers (with respect to prices, credit ratings, services, responsiveness, etc) will ensure reliable supply at competitive prices As experienced by Durham and Clarington since January, 2009, reporting functions will provide the financial integrity, accuracy and detail required to track financial and volumetric performance, performance to budgets and Enbridge rates. The reporting structure in place will also help proactively manage remittances, pool balances and balancing transactions. A NOTE ON THE OTHER MODE15 REQUESTED fN TH15 RFP Blackstone believes that the other models requested will not meet all of the objectives and requirements of this RFP. Our reasoning is provided below: Purchasing cooperative models may offer some account management activities but not to the level of detail required to provide optimum portfolio management strategies. These models spend a majority of time and effort focused on managing a large pool of gas and therefore do not have the dedicated resources to understand each client's profile, risk tolerance and budget goals. They do not have the organizational structure to have face to face meetings or provide dedicated support to manage all aspects of your portfolio (Procurement, Management and even Conservation). Account services are basic and generic at best. It may be difficult for the Agencies to achieve specific objectives (ie proactive analysis of financial and volumetric variances to minimize balancing transactions) with this model. In another example, conservation efforts are becoming more and more prevalent. It is not prudent to make general assumptions on conservation efforts across clients with multiple use locations (such as Durham and Clarington). Understanding individual accounts as opposed to pools becomes extremely important to ensure balancing costs are minimized. Cooperative models will have difficulty performing to this level of detail. As stated above, they do not have the organizational structure or methodology to manage client accounts in this format. In summary, they most likely will not provide the detailed analysis necessary to uncover these types of risks. Their focus is mostly on pooled contracts, which are difficult to manage in conjunction with client specific and location specific requirements. 15 ~ B L A C K S T O N E 1 ~ B L A C K S T O N E E I E l 6 t 3 E W Y I C E 3 I I C METHODOLOGYAND MANAGEMENT PLAN METHODOLOGYAND MANAGEMENT PLAN Lastly, we believe that the Agencies will not receive maximum value as representatives of these companies may not be able to offer ideas and solutions on other aspects of client portfolios. These may include advice on contracts, strategies to minimize balancing transactions, ideas on supply diversity, delivery point diversity or access to energy conservation information. Organizational Chart of Personnel Assigned Please see Appendix III Value-Added Services Blackstone has been at the forefront of innovation since our inception. We have a number of complementary services that we believe would bring additional value to the Agencies. The descriptions and information offered is fairly basic by design. Each service would require more detailed follow up discussions to better understand how the Agencies could benefit from them. In fact, Blackstone is very confident that the savings incurred from these services would more than cover the fees Blackstone is proposing in this RFP to manage the Agencies' natural gas portfolio. RATE300/315 FROM ENBRIDGE Enbridge has introduced a new rate plan that offers significant savings on utility costs that were historically deemed untouchable. This new plan, known as Rate300, requires mlore hands on management compared to traditional rate plans. However, the cost savings more than justify the time and resources required to implement this new plan. Blackstone estimates that the Agencies can reduce Delivery charges 10%fo 20% by ilmplementing this rate plan. As stated above, this is the first time since the markets wrere deregulated that end users have the ability to save on Delivery charges. There are a number of locations in Durham and Clarington's portfolio that would qualify for this service. Blackstone is eager to present this model in more detail at the Agencies' convenience. BLACKSTONE'S ENERGY MANAGEMENT PLATFORM (EMP) It is a common theme in the marketplace to see organizations managing energy in three silos: Procurement, Management and Conservation. Organizations find it difficult to link the three silos to effectively manage all aspects of their energy footprint. The main reason is the difficulty in compiling and analyzing all relevant data (conservation targets, projects, utilities information, market prices, etc) into a single platform. Blackstone's EMP is the solution to providing an all encompassing energy management structure that delivers the following benefits: 16 R I D ~, K S T O N E METHODOLOGYANDMANAGEMENTPLAN B L A C K S T O N E METHODOLOGYAND MANAGEMENT PLAN EM EE6 i SERV IC ES INC '~ - audit trails for verifying energy conservation projects - ability to manage all energy uses in one platform including natural gas, electricity, water, compressed air, steam and green house gas emissions - historical analysis to understand demand profiles for each location waste detection capabilities and support for making longer term decisions -i analytical and professional expertise to understand what is happening and how to deal with it Please see Appendix IV for a visual and more details on what is possible with EMP. ADVICE & CONSULTING ON TRANSPORATION FUELS .Blackstone has developed relationships in the transportation fuel industry to help end users manage their exposure to Diesel Fuel and Gasoline. ',Although similar principals (cost certainty, reduced risk to price volatility, simplicity of internal costing, etc) of natural gas portfolio management apply, the ability to achieve '..these objectives is not the same. Physical supply in North America cannot be hedged in the same manner as natural gas. The products and methods available are also different. Blackstone's offering can help the Agencies gain access to market services that are typically unavailable to smaller users. Our knowledge of market participants and portfolio size ($930million under management) helps end users such as Durham and Clarington gain access to services typically available to very large users. 17 Rt Af:KSTONE BtACKSTONE EREt6t SERVICES IRS 4EXPERIENCE, STAFFINGS QUALIFICATIONS AND PRICE PERFORMANCE TRACK RECORD [Section 2.3.3 of RFP) EXPERIENCE, STAFFING, QUALIFICATIONS AND PR1CE PERFORMANCE EXPERIENCE, STAFFING, QUALIFICATIONS AND PR1CE PERFORMANCE ', TRACK RECORD (Section 2.3.3 of RFP) Blackstone's Advisory & Brokering Model - Truly Unique) Blackstone Energy Services was established in 2003. The 3 Managing Partners have a combined 70 years international experience in the Natural Gas industry. Their ,experience includesthe ownership, operation and investment in energycommodities .companies. Based on their track record, they have established a formidable network that includes producers, suppliers, investment dealers and brokerages. ..Blackstone currently manages over $930 million in energy commodities on behalf of .our clients. Our clients represent the Industrial, M.A.S. H., Telecommunications, Food Manufacturing, Real Estate, Commercial and Bio Fuels industries. This leverage and experience in the marketplace will help the Agencies in many ways including: Access to large, credible suppliers who would not deal directly with the Agencies - Pricing that reflects Blackstone's portfolio, helping the Agencies minimize cast through our negotiating leverage - Strategies and solutions that are not available with traditional natural gas market participants Key individuals assigned to your account including: o Your Blackstone Advisor o Portfolio Manager o Analyst Blackstone's Management has established Unparalleled Access to the Industry's Suppliers-there are more participants competing in the natural gas space than most end users are aware of. Our procurement approach will provide the best combination of market transparency, liquidity and pricing, leading to more competitive bids with better terms and better pricing for natural gas. i8 Ri A('.KSTONE BLAGKSTONE ERf RCt Sf RyIEES IRE i~ EXPERIENCE, STAFFING, QUALIFICATIONS AND PRICE PERFORMANCE EXPERIENCE, STAFFING, QUALIFICATIONS AND PRICE PERFORMANCE TRACK RECORD (Section 2.3.3 of RFP) Blackstone's Executive Team is the sole reason we can bring this type of versatility and competitiveness toour clients. Their industry knowledge, expertise and reputation have helped create the most attractive procurement environment in North America for end users. Industry Leading Solutions on Account and Portfolio Management -our strategies have delivered lower prices and lower costs for our customers in areas typically not focused on by other consultants or marketers in the industry. Blackstone will demonstrate strategies that avoid risky outcomes and protect the supply requirements of the Agencies (ie supplier diversity and financial strength). Blackstone feels this outside the box approach will provide significant financial value to the Agencies. Morket performance- purchasing natural gas in the competitive marketplace provides the Agencies an opportunity to hedge and gain financially when procuring natural gas. However, it also exposes the Agencies to the risks of poorly executed hedges and volatility that impose undue costs. Blackstone will provide details on our track record that prove we have the experience to outperform in the long run while managing one of the top three most volatile commodities in the world. Recognized by the Utilities as Experienced and Competent -Blackstone prides itself on paying attention to detail. Navigating the utilities requires is not easy. It takes research, efficient systems and reporting functions, solid understanding of the regulatory environment and constant monitoring of account information and program changes. Blackstone feels more than confident that we can fulfill the Agencies' requirement of performing when it comes to Enbridge and EnTRAC related items. !n fad, we are happy to provide a reference of Enbridge to give the Agencies the comfort that we have the expertise and capabilities to meet and exceed this requirement. We ask the Agencies to feel free to contact the following individual at Enbridge at your convenience: Ian B. Macpherson, P.Eng. Manager, Direct Purchase Enbridge Gas Distribution Inc. Telephone: (416)-495-6535 References Please refer to Form of Proposal of this response for a list of client references 19 RIACKSTONE BLACKSTONE ENESCt SENYICES INC EXPERIENCE, STAFFING, QUALIFICATIONS AND PRICE PERFORMANCE EXPERIENCE, STAFFING, QUALIFICATIONS AND PRICE PERFORMANCE TRACK RECORD (Section 2.3.3 of RFPJ ~ Price Performance Track Record and Overall Track Record . Blackstone is always focused on bring value to our clients. Our goal is far our . customers to view our fee as an investment, not a cost. For this reason, we take great lengths to monitor our performance in terms of financial benefit and overall service. . We hope the following statistic will give the Agencies confidence in our abilities: . - 97% of our clients have met or beat their budgets in each of the past 5 years • - 98% of Blackstone's wstomers have received financial benefit from a portfolio strategy they were not previously aware of - Since inception, Blackstone has retained over 99% of our client base ~ Price Performance Compared to Enbridge Our portfolio has outperformed Enbridge rates since 2004.Ourtrack record can be attributed to the knowledge of our Executive Team, the diligence employed in our research efforts and the market acumen of our Analytical Team. Performance for the last 3 years is detailed below: ® 2006: 5.4% 2007: 6.1% . 2008: 9.4% ~ Staffing Qualifications • BRUCE CHANDLER, EXECUTIVE DIRECTOR • Bruce has considerable experience in the deregulated natural gas and electricity markets in Canada. Bruce has been instrumental in establishing the unparalleled . access to North America's suppliers for Blackstone's clients. His knowledge, . experience and understanding of the North American natural gas supply chain is exemplary. He is often retained by institutional and financial organizations to provide advice on the North American energy markets, including business development . opportunities and regulatory implications. Bruce also works closely with Blackstone's outside legal council to stay on top of the . constantly changing regulatory and legislative environment. He also frequent 20 I R I A C K S T Il N F EXPERIENCE, STAFFING, QUALIFlCATlONS AND PRICE PERFORMANCE I ~ . B L A C K S T O N E EXPERIENCE, STAFFING, QUALIFlCATlONS AND PRICE PERFORMANCE ) E Y E R 6 t S E t M I C E E I M I; TRACK RECORD (Section 2.3.3 of RFP) interaction with industry governing bodies (National Energy Board, Ontario Energy Board, Independent Electricity System Operator). Bruce's has been the founder ofand/or executive of numerous companies in the energy industry including Great West Energy Ltd., Chandler Energy, Novagas Clearinghouse and Consumers Gas Curtis Chandler, Executive Director Curtis has a solid understanding of how the North American supply chain and the deregulated markets can provide opportunities for end users. His experience and ability to develop business models and strategies for clients to succeed in this space is second to npne. Curtis has held senior positions with Dynegy Canada Inc. and Intercontinental Energy Brokers (Derivatives) Inc. During his tenure at Dynegy Canada Inc. Curtis was responsible for setting daily natural gas prices for all delivery points in Canada (over l.SBillion Cubic Feet of Supply). H,is role on behalf of clients is assessing industry participants, their strengths and weaknesses and how best to maximize the supply chain to most effectively manage the energy portfolios of Blackstone's clients. He is constantly in contact at the executive level of the industry's major suppliers to ensure he is on top of industry trends, and market opportunities. RYAN DUFFY, MANAGING DIRECTOR Ryan brings over 13 years experience in the natural gas and electricity markets. Prior to co-founding Blackstone, Ryan had held management positions at Engage Energy LP and Superior Energy Management Services Inc. Ryan has extensive knowledge of energy commodities in Canada and the US North East. Prior to the deregulation of the electricity market in Ontario Ryan had successfully co-launched Engage Canada's first entrance into the Electricity market in 2002. Ryan has a BA in Political Science from the University of Western Ontario. Ryan's responsibilities include advisory services, business development, interaction with local utilities and industry suppliers. DAMIEN DUFOUR, DIRECTOR, ENERGY MARKETS Damien and his team manage the daily needs of Blackstone's commodity portfolio. Damien is constantly monitoring commodities market fundamentals and working with the trading desks of industry suppliers to maximize portfolio opportunities on behalf of Blackstone's clients. 21 RI ecKCTf1NF BLACKSTflNE EYEH6Y SERYICEf INC EXPERIENCE, STAFFING, QUALIFICATIONS AND PRICE PERFORMANCE EXPERIENCE, STAFFING, QUALIFICATIONS AND PRICE PERFORMANCE TRACK RECORD (Section 2.3.3 of RFP) Damien has held senior positions with Engage Energy Canada, L.P., Pervin & Gertz Inc., and ZIFF Energy Group. Damien qualifications include a Business Commerce degree-from Laval University, completion of the Canadian Futures Exam, completion of various derivatives courses including commodity derivatives and weather derivatives. Damien's responsibilities include: Overall management of the commodities portfolios General hedging recommendations - Research and analysis on global commodities markets - Reports and commentary WETER STRATAKOS, SENIOR ADVISOR Peter has over ten years experience in Canada's two largest deregulated markets, telecommunications and energy. Peter earned his Economics degree at the University of ~lestern Ontario. While at Western, Peter was also the recipient of the Robert G. Siskind Ontrepreneurial Award (1991. With a keen interest in global economics and commodities markets, Peter has continued to expand his knowledge base by attending rjumerous courses at the Canadian Securities Institute. In addition, Peter has attended courses and training seminar relating to commodities markets, futures markets and I#s Senior Advisor, Peter's responsibilities include: • management of client portfolios - interact with management, administration and operations to meet client objectives - provide guidance and advise on client commodity, utility rate plans, and budgets - attend relevant industry seminars, conferences and training sessions as it pertains to managing client needs DAVID ALICANDRI, PORTFOLIO MANAGER Since 2005, David has been active in portfolio management duties. He received his Bachelor of Business Management Degree (Honours Program) from Vork University in 1999. David has almost 10 year experience in analytical and portfolio management functions. 22 Rj erucT(1NF BLACKSTONE EMEICY SERY3CES IMC EXPERIENCE, STAFF/NG, QUALlFfCAT10NS AND PRICE PERFORMANCE EXPERIENCE, STAFF/NG, QUALlFfCAT10NS AND PRICE PERFORMANCE TRACK RECORD (Section 2.3.3 of RFP) His responsibilities include: - Client specific portfolio management strategies and recommendations - Active involvement with utilities for nominations and remittances Portfolio strategy and planning Research, analysis and market reports on natural gas and electricity markets s i~ SHANE XU, ANALYST Shane has recently joined Blackstone in 2008. Shane had held positions as a researcher and an analyst at the Office of the Ontario Minister of Finance and the Independent Electricity System Operator (LE.S.O.). Shanes' responsibilities include: - Reporting - Research and analysis Customer service functions including managing client pools and general account management Q'AMILLA ARNOLD, ADMINISTRATION ~amilla has been with Blackstone since 2006. She works closely with Blackstone Advisors end Portfolio Managers to handle customer needs including: - Transaction entry and verification - Customer service and operations functions - Billing verification Client file preparation 23 R( erKC7f1NF BLACKSTONE EMERSY SEAYICES INC 5 FINANCIAL CONDITION, CAPACITY, AND INTEGRITY FINANCIAL CONDITION, CAPACITY, AND INTEGRITY FINANCIAL CONDITION, CAPACITY, AND INTEGRITY As a consulting services firm, Blackstone is not in the business of trading commodities or taking on any direct market positions. It is important to note that while we do execute transactions in the market, these transactions are facilitated on behalf of our customers (we are never the Counterparty). As such, we do not have any market exposure that should concern the Agencies about our ability to deliver services (as we can neverimpactyouractualsupplyfornaturalgas). However, we are also respectful of the request in 2.3.4 to provide as much evidence as possible around our financial condition and financial controls. Blackstone has 3 locations in North America (Toronto, Calgary and Florida) and annual revenues of over CDN$26,000,000. We are not overly exposed to any particular industry (ie auto sector). Our client base is composed of companies and organizations in the Industrial, M.A.S.H., Commercial, Telecommunications, Food Manufacturing, Biofuels and Real Estate industries. We are very focused on our internal controls. Internal audits are conducted each year to ensure our procedures, tracking systems and account management infrastructure comply with industry, government and regulatory requirements. All transactions, reports and accounting related items must be entered into our systems with proper management approvals. In summary, we believe we have the financial capacity to manage the needs of the Agencies. We hope that our brief history in working together has also provided some comfort around this matter. 24 t5 LHi.n~ ~ ~Ir~ BLACKSTONE EYE!!Y SElYIGES INC APPENDIX I: ONTARIO SECTOR NATURAL GAS DELIVERY AND DISTIBUTION Simplified Diagram to illustrate Agency Delivery & Distribution Model SPECIFIC TO DURHAM Durham has two delivery points: Empress and CDA Empress physically lands at the CDA (Central Delivery Point) before Enbridge delivers gas. Although Empress gas physically lands at CDA before delivered to Durham, it is still prices as landed at the Empress Delivery Point at the Alberta/Saskatchewan border. All other associated charges to deliver gas are invoiced under separate line items on Durham's Enbridge invoices. SPECIFIC TO CLARINGTON Clarington has one delivery point: CDA Enbridge delivers gas to Clarington from this delivery point. CDA prices are "landed" prices, meaning all charges associated with the commodity (except distribution) are built into the price. For this reason, CDA prices will always seem higher than Empress prices. 25 r- W ~ ~- oW ~~ ~~ ~W ~~ u /J~ W W W Z U r.7 a a 0 Z r.i W a r.i A 0 Z W a ,o ~. gg g Y Q ' ~ 4 ~~ ca r i ~ -~ i ~ ' o ~ _,~ r ~ ~ f ~f , ~- il1,~s ~~~~~ I~~~~~~~, (JJ/ ~i9faltate ~ j.~ g~ ;~ ~ e ~~~ f ~~~ <' ~ !e®e®r ---__,~ ill Jf~f .~ r S f~ „-„ ~Eo. f ~si~fi~fe~~~ !~~ (~~IlJl~~}~ 1 t ~~~ ~Ifllll~ ;~o. E 0 A v m c m U N C A 3 'o N v L Y Q Y d m .m v l0 Y t `w a n v L 01 .Q L1 3 N 0 .~ a 'v A C U 7 0 L 0 L .. 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L ~ p V 7 N ~a Y y ~ > X >~ a y c O c ~ m u ¢ ~ ~ ~ ~ o ~ '° a ~¢ c F-a$ ~o w ~ ¢~ u as ~a~acarcsieun~ BIACKSTONE llf rrl S[r IIC[f Irg Market Intelligence, an energy market update al Gas Market knowy rM OrNNnAroolplnt oinafuml pas wallptls IMa tlecnaaetl by as muM u ]0 parcanf slnn f998 Me fo aWaneetl tltlllhp bchnolagy, wfrkh b vtremely uaehl fg /n senaHlre area. gas pncu plummetetl /olbwing the announcement d alarger-Uanaxpadetl iixxeasa in U.S, invenbnea. Pmmpl NYMEX future mnbact poem for Jurm tlelivsryfeN 36.] cents, 3rcent, to setae et $3.803 USD per MMBW, Ne biggest meEey tleclbe snm Aug. 20, Z00]. After 21 out of 22 analyst aurveyatl by Bloomberg pretlidetl a gas inJecBm o/ less Bci, 8ie natural gee sbrege report releeaetl by the EIA mia moming showetl a net inJedpn o/ 103 Bd. Thb b 32.1 percent higher Than storage busts a year ego, entl 22.4 higher Lien the five-year average. insh stoage report le eccompanietl by more tlbmel news an the tlemantl front-the U.S. Energy Departrnent forerJSabtl ntluatrial gee mnaumpllon b fall B percent in 1009. nore, motlerate temperature forecasts mn8nm b tlampen near-[ann heeling antl coding loetls, especially coming oB the mitl temperatures tlunng Iha peat week playing part in >9 atmage inledion. W 8haut a breeeeabb resurgence in intluslnal tlemantl, Uie mmnl prim increases last week has ul8matey proveE untenade. ttatUrat GiY;FOfW2118 CYM( V4 Parkway)M 6rFMyr lS.2gM a0WetrlMtl ~Empwp Pnn MPdkwry Phu NCm _ _. ` .. _. _._ ,: Mp ;:= -AIi. f @M jq Mso B .'.yJi: um si:w few >~ faA /~ d'~ W ~ 1I'g r~ :.. _..'. ,~$ A~ of f~ ,~'r ~e • ~ ~ a ~P t. a y, i ,.. , ; fi d' ap of 1F ~ ea" f tr .~ >+`^ f >B` ,f d` ~r of`~ ..~ t$eVelntfar Cs08 YNI CO$P(Me~ _;~-NOWB Gee Vew -NOWT Gas Yeer -NwOe (ISe Yew -NOVOB Gas Year $1g.gg __ __ __. ____ _._~_.. __.__. __... .. $1700'.. - $10.~Ik ~.,~ .. 1 $B.m $e0p A ^~ r6.Db. $0.88 . ~ ~ ~ y ~ ~ ~ ~ ~:3 ~ '~fe g¢ Sa !y} j{ b '3f gas 6p~ @ yq qp qy fp{ qy °. d ~ G ~ ~. 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The system Ms Na a611i1y ro remotNy fain poweron preNro a ausromer, read usage M/ormaHOn from • meror, dtect a ewv/u ovbgs, dabct fM utuuNartietlase of NecMClry, char,pe the maalmum amount of abcblchy Net a watomercan demantl of any Umq and remobly Mange Ne meren bfNMp pbn The OMeno IegisleNre pesaetl the Green Energy Ad Nia past week. whits Ne Libaml government promaetl woultl create 50,000 crew lobs antl make more room iv renewebb energy. Key wmponeMS d Ne Ad indutle a feetl-in tantl Pnarrement program, a nrore atreamlinetl renewade energy prged approval process, the etloption of smart gritl techrologim, antl inwnbve progrems fa tlbtdbNbn eyelem upgretles. The act came uMa Bre after Premier Oeftan McGWny warned Viet the prwinw wont lolerete any obfecliws b new wits wibines w edar farina Ihet erenY Msetl w safey a envlmnmgntal cancems. EnNronmentalbts also wmplalnatl Nal Ne plan still relietl tw huvily w nudeer power. TCIa wines after Ne awinw backetl away from a key wmpwanl of the IepisbCOn Net woWtl have tilted homoo5vnere W pay ror en energy autl8 Defore a hand wuM M adtl. 2008 AVp -200]AV9 Z9a1 AVg eaeo a.os 56m sae nee 6.ep 0108 4.11 aew a.ep 0].18 4 R ST 30 SD 25] 4 )8 3120 S.t2 Oe e) a.e] de Oil Market ou know)TM Nubbwt puk Hreory was ibOC modN estlmatu Iwecaat IMf pbl drp ma/or Menges In the UfearyPe oiha Iran tlroppec iv Ne tlay sax r~Ming a per Mmel, after Wetlnestleys setUStl prk ea U.S Labor Oeparlment reporac Nat i W 6.fifi millbn (Ne 1ah wnaewCve wN ae 58P 500 was town 1.68%) arts a gak 3wwar'N 6269 6.2s re9a.rvae so.as xa Merdr[a 59.x1 592 Ap'iW9 5101 5.10 Mry-O9 36.31 3 a5 3,arra 6z.za 9.2s JulyL9 6229 e23 AuputlM SO.m S.w SplenMrL9 S2.xa 523 ~ -0e SI.M 3.39 DecamMr-09 M.39 0 N May 20, 20081 Market Intelligence, an energy market upc May 20, aew n.ea ]4 ad are 1983 1.~ b prat used M 1958 ro accunbty predkt NM IlnMd Smbs oU pmducHOn would pert between )985 arts 19]0. Cumnf M producfbn WU bpM by SUM w lamr, eM auume ma/or Mvasfinenb M aham>pres wlU ocwr Mfore a cdab, wlNOUt nauming natlonx high Ne previous tracing se5siw. NVMFJ( Ight sweet wtle wnbacls br Juty tlelivery fell 99 cents, Ur 1.8%, to seNe a[ $81.05 0 USO per Carrel merketl tM HgheM setllemeM sMU Nov. 10, 2008. A news ilam Nat playetl a paH b Ne paw r3eueese ions Nan erryedetl NM deima br unemDloymenl ineurenw lest week, wiN 1M tdel number of people collectingbene8ls i. Pries movements may also have Oeen affedatl Cy Na sMCk market, u meow Mtliwe tltoppetl (the Oow was tlown 1.56°6 olar Nal ume o8 d 1EgM-loeafety purtNeees N U.S. treasures (fdlawing a S8P repad Nal loweretl its oueodc on Odtain's in pcras b Ne past week has letl OPEC ofidals b strengNen intiutiom that Ne organi2etbn will keaP soppy brgeh smetlY when Il meets na# week. Triis i5 paces are sCll lower Nan Ne $TO$]5 a barrel Nel several OPEC wunMes, indutlinp Seutli AraGe, eeitl ware neecetl N keep up intluatry invesMent antl avoic a Hall ww Ne gloMl economy arc tlwnentl recwen. -.. - HYMEX Crude OII HlataieN. Prompt Se{Ns (U&fl sfm . Et99 1+q U811' S+ak it1M1 Suer' 39D 890 ii0 90: 3 'A 3 k9 33 0.. . lin , g .1' ,~v!' it ~~f~~.P ~+l!. ~.9' f f c~ Y A ~W' sT Y ~•f ~19' a'~~~cA Y ~ii' ~f ~J o~~d' ~~~~F Y Technluls In U9D HeMln dl 93 fIBOe N a5 ee.6e t ~.n 9z.9a lame 1.RB1 1 Tre] e1 s1 )p.3s x sTm a6.e5 3eDe 1Sr5) vne ax )e )113 3 55.50 6).9t pe 15KB 1T509 NE Mav 20. 20081 BLACK $ T O N E Market Inteuigence, an errergy market update EA[BBY AE AYIC E$ IEt - May 20, 2008 330 Bey St., Sulta 304, Toronto, Onlarlo, CtlnaOe MSH 288 Tel: 410629.2828 Fex:478640-9100 bd kslo Gasoline and Diesel Markets OM you Mrow) m rxcflon ro the 1873 M cdsrs, m. Btazillen p0wrrumnt impemenMd a wry larye pr0(ecf calkd'Pro4ke01•lPro'ekono0 a eewbp eManW-0Iended mek. rnk pmJect /0cusetl on pmduGnp elMral /tom super cerw, k etll/ onpolrq and Ma retlviced Me oN mrpodstlon neaea x waN ss tlw pdca o/pasolina /n the country. Gesdine futures tratlatl below fresR seven-month hghe, es Vatlere booked same pmfN, with prices having surgetl more Man 15 oand so far Mie week. NYMEX June RBOB was up 2.25 tend, or 1.24 percent, et $1.8350 U9D per gelbn, bntlmg from $1.8270 b $1 8]24, the highest since prces hit $1.8985 on Oct. 15.2008. Gasoline stocks tlroppetl 4.3 million benek to 204 rtdllion Bartels, far greadr Nan Me foreoeal fora 1.2anilllm-barrel tledine. Distilled afocka, which irlduee Reeling dl antl eiesel, rasa 600.000 Bartels [0148.7 mAllon bemis. That was taxer Man Me forecast for a t.p+niAion-Bartel increase. (Raudre) MYME)C Futures Prompt 01Ah8Ct Pdtas -NYME%NUYy at Pnre -NYMEX RBOB Pn[e -NYMEII GWe Prcs ~r T V. _._ .~_.:._~ ._ ~.. ~_ w ~_._ _;:_........ .. j ` r W$ i , Rk g{ x V' ~ }. lm. . gi ,¢ ~p ,p ¢ ¢ y g~ .$ j~ q~ ~¢ ~t ~1 y~ a g ,p yy ~d ~P ~y ¢ ,p~ ,p p $.. ~Y ~f. ">~v~ia° r ~ir' Y14~ Y W .Y^ aT ~~J" fPF Jy ~~~W iP' $ f v+^ ~®P ~~~F. IA ..yvn„Pfe'TBx Ret9H PN i -CaruGeRyllerGnaline Average PM1x -Cenxllan oeW Rwre9. Pha -113 RepuW Gaedire averepePMe -US Oinx AVarape PM1re ~, In 1rP y! n J ', n W {( P: n ,. y/ ~ }r C Y .P / T f f I d ~ ~. ~ A Y N Y ,. ~i~ Q F 'vruesr.mn Other Key Markets wIA e.zm.t3 nz9atl nsal estaes eza.m sate oT +cAO= 1.0900 o3Tee aa3zo s4P 500 BaB 3a itstal IL601 900.43 axe41 900.43 1US0= 41?et te000 extBJ NMSDRG CI La85.2s W2.591 11.891 1.T19.5a tBPP 1]re.N 1EUR= 1.59?I 13908 10000 saPR3%CI 998T.a5 26a s9 2.59 t0are.56 9935.3) 10 aa0.59 1GBP= 1BWC 15054 1.1901 ,.~ wu gym, s4P aa0 o.aoo NeapMa ,.,ate SaP xa .moo i z. _ ,_ ~ a~~ ~~35938}}€14§tiS8f39l4itS&f1 ~983t3334i~~P&1~33391SSfPY, ~g9~33t3439~338153311iiS€i& ~34E383t19&E4f81&849;93114 wu..,,,.,w uol. dlTxua rausanelm BLAIif\J I UIYt f FFaat Sit Flt [i Iat May 20.20091 Market Intelligence, an energy market Npdate BLACK $ T 0 N E May 20'2009 setttF ste Flt [i nt 730 Bay St.. SuOe 304, Toronto, Ontario, Ganatla M5N 238 Tel: 418-028-2828 Fea:418.8/0A100 's°b Weathef U.S. MbwaetRpbn- U.S. NOtlIMart Rplon Narmel Warm tamperebres are expecbtl b stick erountl in N¢ Midwest through shout Tuesday of ne# week, wiM readings then turnip Delow normal for Ne rest of ne# week Matlereb levels of rein are foreceetetl for the raglan for Ne ne# few days, /ollowetl 0Y several days Of dry vreetlrer again br blx ne# wmk Tha NoMeast U.S. and Canatla are boN kxlklrg ahead to moderate spring temperebres, accwnpenietl M a felt level of predpitagon all along Ne cOasL I, -- N-- ,~ FaawYdN Welty ForeeaeYtN CeYlw FmuebtlN M CMelw Cl,kay 28 21 Barre 28 19 LoMOn 18 19 31 30 R oma VbueNn 31 21 Lantlon 2B 21 Waxe 28 18 I el,anpW 25 2L • Yl i9 Lp Arpyye WwYeM1 31 28 Tomnb b 21 aNyo 21 M glly,la 23 28 W'iMaor 29 23 Bon ewe 30 29 Heating Degree Days (Ontario) ^zaoa ^zoos ^zoos ^zoos ^zoos 900 _ _ _. _ __ _ _ _ 800 ' 700 600 500 400 300 200 100 0 Opree gm Pcl -oN.do Nav-OB 151.6 0 My-09 533A 0 JuWe Ow~00 2]0.9 0 Fe609 5215 0 Jun-09 9ep-00 59.5 28i Jende 830T 0 Yey-0I (1.201 119.1 3.1 A 8 12.1 Bl OeaOB 051.8 0 -03 3[69 t2 FwMn°M ~Nw aXT,l1 Fvllattli199 BLACKSTONE EIf1iI IE111{Ef IIC Account Summary Sample ABC Account Nov 1, 2008 -Oct 37, 2009 Legend '. • '. I . 'I i, • i . 'I • • • • • I• tpba,gab t,zoo.bo6 t,6ob.bbb E ~~ E a 600.000 a abb,bao zb6.oro 0 Nov 7, 2008 -Oat 31, 2009 Monthry MDV Delivery vs. Actual Consumption Nov Y10 Dx'pa Jan D9 Feb'O9 MarM'09 Apd1119 Mey G9 Jurb'09 Juy'09 Aug'09 Bapt'09 Oct'09 Nov'OB I Actual iorecaal - -- i _ i r - I i _' ; _ __ NaW 1. Actual number In black, brerasted numbers in blue 2. Utility CoMred over6ps Into a poMm d November 20119 3. Derember'OBNorDelivery Remitterwea to Supplier ir~tludes FIS setllamani from previous year (overmlactlm by Enbritlga in 200]-2008( 4. All foreraatetl mneump9on vdumeabeeetl on lest years volume S. FOrerasted FIB Credit (Deb61b DB eppNetl agalns[remitlence [o Buppller in December 2009 6. Pries on BIII is weighted average bapveeri Weatem eM CDA Pods ]. All figures incWtlea GST 6. Previous Year Unsettled Fnancial Amuads Include unapplietl Belarwing antl Penalty Amaunp Hedges _ ~ ~~ Egg i~- ,8 F ~o~ g~s 8 e~;_ i`s. '8 ~~++~ a3~ R~- S N = N = C .( Gf d Z (A w 2 ~ ~ d ~ ~ YI roDa inn p o Om c ~~» W y J 3 o w ~ P3 _.1 ]~TIIff~$1 g@ P t ffa~ ~' ~ $ .- ff p ~~ yyl!gt r~ ~~i@9~ . {p 9t $8ii ~ ~3 ~ ~i~ gg a$E~~ P yY ! C~3 ~~~8~g 83~ ~a~ 's m'saa "agy `~ 88~@°. ~~~ks~ 3 q ~"e ~~} 0 _~.. ~~ ~~ £~~ titiN (S 3 aass8. s a g kaaaa k a @ sa$~aa a~s~s~E N s ~tr ~ IX 5l'SES_ TYT Y, g` N ~ YI ~ C ~ ~ d Z Z ~ C < 'p m ~ A ~ NDtl~i W ~C'1n ~ n O 0 N C w ~ 7 w .r w y r _ m RFP348-2009 Consulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas 5 FORM OF PROPOSAL SECTION NATURAL GAS SUPPLY AND RELATED SERVICES FOR THE REGION OF DURHAM AND THE MUNICIPALITY OF CLARINGTON Blackstone Enerav Services Inc PLEASE Name of Company USE INK OR PRINTER _ _.. --_.. _,._ (4161628-2828 (4161840-9100 Telephone Number Fax Number rduffi~ blackstoneenergv com E-Mail Address Ryan Duffv Name of Person Signing for Company Managing Director Position of Person Signing for Company Peter Stratakos Name of Contact Person PROPOSALS RECEIVED BY: Ms. P. M. Madill, Regional Clerk The Regional Municipality of Durham, 605 Rossland Road, East, Main Level, Whitby, Ontario. L1 N 6A3 UNTIL 2:00 PM, LOCAL TIME, THURSDAY MAY 21, 2009 Note: Respondents shall include this form with the Proposal Submission Page 22 I~ RFP348-2009 Consulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas 5.1 SUBSECTION 1: FORM OF PROPOSAL LISTING OF SUBSECTIONS Description: Subsection: ® Service Fees and Proposed Contract Changes 2 ® Respondent Client References 3 ® Staff Experience and Qualifications 4 ® Signature Page and Acknowledgement of Addenda 5 A complete listing of all mandatory submission requirements is identified in Section 2.2. Page 23 ocr_~nuer uuWIMPAI ITV AF Il11RMGM REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas 5.2 SUBSECTION 2: FEES AND PROPOSED CONTRACT CHANGES` 5.2.1 Proposed Fee Respondents shall complete Subsection 5.2.1.1, and Subsection 5.2.1.2 if applicable 5.2.1.1 Respondent's Proposed Fee The Respondent shall propose a Fee in the space below excluding GST, in consideration of the .services to be performed and all costs thereof, based on a fixed mark up price (in Canadian Funds) per 1000 m' of natural. gas used by the Agences throughout the Contract term. (The Fee will be incorporated in the Enbridge monthly bills and shall exclude applicable sub-consultant's fees that would be charged directly to the Agencies under Subsection 5.2.1.2, unless both fees are incorporated with the Respondent's proposed fixed Fee below). $ 1.1 ~ per 1000 Cubic Meters 5.2.1.2 Applicable Sub-cotrsukan!'s Fee Where the Respondent has already retained a natural gas consultant to provide the services required under this RFP, and a portion of the cost of those services would be charged directly to the Agencies (on Enbridge invoices or otherwise) and not incorporated with the Respondent's proDOSed Fee under Subsection 5.2.1.1, calculate and enter the current applicable fees or costs below (excluding GST, in Canadian funds), expressed per 1000 m' of natural gas consumed. $ per 1000 Cubic Meters 5.2.2 Proposed Contract Changes Respondents shall attach any proposed changes to the Bid Document terms and conditions to this Subsection, if applicable. Note that the Proposal fees will not be publicly announced at the Proposal opening meeting. `Section 5.2 Revised per Addendum 1 Name of Bidder: 61,.PC.~GS'~ ~jl~P1l~ Page 24 (R) ~Rv~LES ~r> L. RFP348-2009 Consulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas 5.3 SUBSECTION 3: RESPONDENT CLIENT REFERENCES Respondents are to provide three references for projects of similar size and scope to the RFP requirements. These should include involvement by the key staff resources identified in Subsection 4. The Region reserves the right to contact the references provided to determine if the Respondent's experience is satisfactory for this RFP. The Respondent may attach pages in lieu of this form. Company Name: St Joseph's'Heathcare Hamilton Contact Name: Chris Chovaz Telephone Number: f905) 522-1155 x33009 Fax Number: (905) 521-6008 Description of ConVact: Natural Gas Consulting and Advisory Role- managing portfolio valued at approx $2 million per vear Total Value: Confidential Start Date: Nov 1.2007 End c. Company Name: St Mary's C ment Contact Name: Edilson Chimlovski Telephone Number: (416) 696436 Fax Number: (416) 6963435 Description of Contract: Natural Gas Consulting and Advisory Role- managing portfolio valued at approx 5550 000 per year Approx Total Value Confidential Start Date: Nov 1.2007 End Date:. Nov 1.2010 ~ Company Name: Neil Clarke Contact Name: Lakeridge Health Comoration Telephone Number: (905) 576-8711 x 3614 Fax Number: (905) 721-4750 Description of Contract: Natural Gas Consulting and Advisory Role- manaoinq portfolic valued at approx $1 3 million per vear Total Value: Start Date: End Date: Name of Bidder: (~1.PLtGSTotJC ~r~d:CdrY Page 25 5~2v~(,4,5 \tJG. RFP348-2009 Consulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas 5.4 SUBSECTION 4: STAFF EXPERIENCE AND QUALIFICATIONS Provide names of key personnel to be used in pertorming the services of this RFP and attach details of their qualifications and education with the Proposal. References provided in the previous subsection should be for work completed by the key personnel listed below. The Respondent may attach pages in lieu of using this form. RESPONDENT'S KEY PERSONNEL: NAME JOB TITLE QUALIFICATIONS EXPERIENCE BRUCE CHANDLER, EXECUTIVE DIRECTOR Bruce has considerable experience in the deregulated natural gas and electricity markets in Canada. Bruce has been instrumental in establishing the unparalleled access to North America's suppliers for Blackstone's clients. His knowledge, experience and understanding of the North American natural gas supply chain is exemplary. He is often retained by institutional and financial organizations to provide advice on the North American energy markets, including business development opportunities and regulatory implications. Bruce also works closely with Blackstone's outside legal council to stay on top of the constantly changing regulatory and legislative environment. He also frequent interaction with industry governing bodies (National Energy Board, Ontario Energy Board, Independent Electricity System Operator). Bruce's has been the founder of andlor executive of numerous companies in the energy industry including Great West Energy Ltd., Chandler Energy, Novagas Clearinghouse and Consumers Gas Curtis Chandler, Executive Director Curtis has a solid understanding of how the North American supply chain and the deregulated markets can provide opportunities for end users. His experience and ability to develop business models and strategies for clients to succeed in this space is second to none. Curtis has held senior positions with Dynegy Canada Inc. and Intercontinental Energy Brokers (Derivatives) Inc. During his tenure at Dynegy Canada Inc. Curtis was responsible for setting daily natural gas prices for all delivery points in Canada (over 1.5Billion Cubic Feet of Supply). His role on behalf of clients is assessing industry participants, their strengths and weaknesses and how best to maximize the supply chain to most effectively manage the energy portfolios of Blackstone's clients. He is constantly in contact at the executive level of the industry's major suppliers to ensure he is on top of industry trends, and market opportunities. RYAN DUFFY, MANAGING DIRECTOR Ryan brings over 13 years experience in the natural gas and electricity markets. Prior to co- founding Blackstone, Ryan had held management positions at Engage Energy LP and Superior Energy Management Services Inc. Ryan has extensive knowledge of energy commodities in Canada and the US North East. Prior to the deregulation of the electricity market in Ontario Ryan had successfully co-launched Engage Canada's first entrance into the Electricity market in 2002. Ryan has a BA in Political Science from the University of Western Ontario. Ryan's responsibilities include advisory services, business development, interaction with local utilities and industry suppliers. DAMIEN DUFOUR, DIRECTOR, ENERGY MARKETS Damien and his team manage the daily needs of Blackstone's commodity portfolio. Damien is constantly monitoring commodities market fundamentals and working with the trading desks of industry suppliers to maximize portfolio opportunities on behalf of Blackstone's clients. Damien has held senior positions with Engage Energy Canada, L.P., Pervin & Gertz fnc., and Page 26 ~~ RFP348-2009 Consulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas ZIFF Energy Group. Damien qualifications include a Business Commerce degree from Laval University, completion of the Canadian Futures Exam, completion of various derivatives courses including commodity derivatives and weather derivatives. Damien's responsibilities include: - Overall management of the commodities portfolios - General hedging recommendations - Research and analysis on global commodities markets - Reports and commentary PETER STRATAKOS, SENIOR ADVISOR Peter has over ten years experience in Canada's two largest deregulated markets, telecommunications and energy. Peter earned his Economics degree at the University of Westem Ontario. While at Western, Peter was also the recipient of the Robert G. Siskind Entrepreneurial Award (1991). With a keen interest in global economics and commodities markets, Peter has continued to expand his knowledge base by attending numerous courses at the Canadian Securities Institute. In addition, Peter has attended courses and training seminar relating to commodities markets, futures markets and derivatives. As Senior Advisor, Peter's responsibilities include: management of client portfolios interact with management, administration and operations to meet client objectives provide guidance and advise on client commodity, utility rate plans, and budgets attend relevant industry seminars, conferences and Vaining sessions as it pertains to managing client needs DAVID ALICANDRI, PORTFOLIO MANAGER Since 2005, David has been active in portfolio management duties. He received his Bachelor of Business Management Dlegree (Honours Program) from York University in 1999. David has almost 10 yeart experience in analytical and portfolio management functions. His responsibilities includee: Client specific portfolio management strategies and recommendations Active involvement with utilities for nominations and remittances Portfolio strategy and planning Research, analysis and market reports on natural gas and electricity markets SHANE XU, ANALYST Shane has recently joined Blackstone in 2008. Shane had held positions as a researcher and an analyst at the Office of the Ontario Minister of Finance and the Independent Elecricity System Operator (I.E.S.O.). Shanes' responsibilities include: Reporting Page 27 RFP348-2009 Consulting and Related Services for Supply of Natural Gas REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas - Research and analysis - Customer service functions including managing client pools and general account management CAMILLA ARNOLD, ADMINISTRATION Camilla has been with Blackstone since 2006. She works closely with Blackstone Advisors and Portfolio Managers to harodle customer needs including: Transaction entryand verification Customer service and operations functions Billing verification Client file preparation Page 28 L ADDENDUM #1, RFP 348-2009, PAGE TWO 3.f.5 ProposedFees* The proposed fixed mark up fee will be assigned a score in relation to the fees offered in other Proposals as calculated using the following steps: to One: The annual value of each Proposal will be calculated by extending the proposed fees bid in revised Subsection 5.2.1.1 by the 2008 actual consumption of natural gas (8.8 million cubic meters). Note that this will include both the Respondent's fees and any applicable subcontracted fees to be charged directly to the Agencies provided under revised Subsection 5.2.1.2. Steo Two: A 'Value per point" will be determined based on 20% of the previous 5 year average price paid for natural gas consulting services by the Agencies (annual price to be calculated against 8.8 million cubic meters of Natural Gas). Steo Three: A points deduction will be applied by dividing the proposed total annual bid price (Step One) by the "per-point value" (Step 2) - to a maximum 20 points deduction. Subsection 3.1.5 Revised per Addendum 1 5.2 SUBSECTION 2: FEES AND PROPOSED CONTRACT CHANGES* Please replace Page 24 with the attached Page 24 (R). I/WE hereby acknowledge receipt of this addendum. Signed (mu be lgning fficer of Firm) f,.(~4Nq-6.~nT6, !~-fz-Tn~-(~R-• Position V~q~1xS'fJ~J~ ESL-/Lfi~Y StE(Z, th C/s . Name of Firm RFP348-2009 Consulting and Related Services for Supply of Natural Gas 1~ .< REGIONAL MUNICIPALITY OF DURHAM RFP348-2009 Consulting and Related Services for Supply of Natural Gas 5.5 SUBSECTION 5: FORM OF PROPOSAL SIGNATURE PAGE Last Addenda received: No: 1 Date: Mav 20. 2009 Date: Date: The undersigned hereby declares that the Proposal is NOT made in connection with any other Respondent submitting a Proposal for the same work and is in all respects fair and without collusion or fraud. The undersigned hereby declares that, to its knowledge (i) no Councillor, official or employee of the Region or the Municipality of Clarington has any direct or indirect beneficial interest, whether financial or otherwise, in the undersigned, or in their performance of the Services; and (ii) the undersigned is not engaged in any other projects nor is it providing services to any other client that would give rise to an actual or potential conflict of interest unless as otherwise disclosed in the Bid Submission pursuant to Section 1.18. The undersigned hereby agrees to perform the services specified in this proposal number RFP- 348-2009 for the prices quoted in the schedule of prices enclosed herein. Furthermore, it is certified that the undersigned is/are authorized and empowered to sign and submit this proposal. Executed 6y melus and bearing date this 26 day of May , 2009. The signature and witness to signature OR signature and corporate/legal seal are required for Proposal to be valid. Failure to provide both the signature and the witness to signature OR signature and corporate/lega/ seal will result in the Proposal being rejected. i rtness Signed (Must a Signing rcer of Company) ~~.7-~ Print Name of Above Signing Officer ~i,A`.,~!1++wL-+ ~~K~- (+~-Eft- - Position ~~-nl'ctlSiJ.v~C ~ih7'~..(~.~+`• .~v~l ~V t G~> ! 1.~ Affix Corporate or Legal Seal Name of Company Note: Respondents must complete and include this form with the Proposal Submission. Page 27 BLACKSTONE ENERGY SERVICES INC ClarlnJ/lam/~~W~n Leading the Woy V Municipality of Clarington EXECUTED CONTRACT Energy Management Agreement This Energy Management Agreement ("Agreement") is entered into by and between Blackstone Energy Services Inc. ("Blackstone"), and The Corporation of the Municipality of Clarington ("Client") on this the 9th day of necember , 2009 ("Effective Date"). Blackstone and Client may hereinafter be referred to individually as a "Party" and collectively as the "Parties." Pursuant to the terms and conditions of this Agreement, Blackstone will assist Client in creating an energy portfolio and securing supply contracts for electricity (the "Services') related to the requirements of certain facilities of Client in North America. In return, Client will pay to Blackstone certain fees ("Management Fees" as agreed to by the Parties, asset out in Schedule 1 of this Agreement 1. Exclusivity. Client hereby retains Blackstone to perform the Services and Blackstone agrees to be so retained. Client agrees that Blackstone will be its exclusive source for the Services during the term of the Agreement. 2. Term. The "Term' of this Agreement shall be for the longer of: (i) the period between the Effective Date and the expiry date listed on Schedule 1 of this Agreement or (ii) the period between the Effective Date and the latest expiry date of all Electricity Supply Contracts and other Agreements entered into during the Initial Term, so long as any contracts going beyond the Term are approved by the Client. Either party may terminate this Agreement by providing the other party with written notice of its intent to terminate ("Termination Notice'} no later than 120 days before the end of the Initial Term. The termination will take effect at the end of the Initial Term. The Client has the option to extend this agreement beyond the initial term for two additional one (1) years terms. Such extension shall be effective on written notice by the Client to Blackstone provided no later than sixty (60) days prior to the expiry date of the initial term or subsequent extension and shall commence on the anniversary date of each subsequent year. At the end of the Initial Term of this Agreement or subsequent extension, if neither party has provided the other with proper Termination Notice, the Initial Term of this Agreement shall renew for the longer of: (i) month by month or 1 Blackstone Initials Client Initials BLACKSTONE E R E R 6 Y SERVICES I N C (ii) the period between the expiry of the Initial Term and the latest expiry date of all Electricity Supply Contracts and other Agreements entered into during the renewal term (the "Renewal Term'). Either party may terminate for any material breach of this Agreement if the party in breach has not cured the breach within 30 days of written notice from the non- breaching party specifying the breach. 3. Electricity Proposals. During the Term of this Agreement, Blackstone shall provide Client with supply and service proposals from Suppliers, market analysis and hedging initiatives for Client. Blackstone will provide Client with complete turnkey services for data management, Request for Bid development, comparison cost analysis, supplier selection, and energy service agreement review, allowing for buyer decisions at key points. Blackstone will diligently perform in good faith all Services in accordance with reasonable industry standards and practice. It will also render the Services in compliance with applicable government or regulatory statutes, laws, orders and directives. 4. Confidentiality. Blackstone representatives shall keep confidential all Client information except: (i). to the extent that it is necessary for Blackstone to disclose such information to Suppliers or utilities, for the purpose of providing Client with adequate energy agreement proposals; or (ii). as required by law Client shall keep confidential Blackstone's fees and all prices and terms of agreements and proposals brought by Blackstone, unless required to do otherwise by the Municipal Freedom of Information and Protection of Privacy Act (MFIPPA). This provision shall survive for one year following the termination of this Agreement. 5. Access to Consumption Information. Client shall permit Blackstone to access and examine historical usage for the purpose of providing details to Suppliers in order to help generate a price quotation for Client. 6. Agreement Provisions. Client acknowledges and agrees that Blackstone may from time to time receive commissions, fees or other payments from physical and financial suppliers of electricity with respect to physical or financial sales of such commodities to Client and other customers. The handling of these fees ("Broker fees") is discussed under Schedule 1. 2 Blackstone Initials Client Initials 1Z~' ` BLACKSTONE ENERGY SERVICES INC 7 Liability. The Consultant shall defend, indemnify, and hold the Municipality, its officers, employees, and agents harmless from and against any and all liability, loss, expense (including reasonable attorney's fees), or claims for injury or damages that are caused by or result from the negligent or intentional acts or omissions of the Consultant, its officers, agents or employees. Blackstone Energy makes no and hereby expressly disclaims any representation or warranty, express or implied, with respect to the nature, quantity or quality of any of the Services or any other matter in connection with this Agreement except as identified herein. The Customer agrees that no forward looking statement of projection, oral or written, made by Blackstone Energy under this Agreement or otherwise, constitutes a warranty with regard to the nature, quantity or quality of any of the Services, savings or results to be received or achieved. Estimates or forecasts furnished by Blackstone Energy do not constitute commitments, warranties or guarantees. Any and all reports, plans or studies furnished pursuant to this Agreement will be governed by and limited by the terms of this Agreement and nothing in any such document will constitute a guarantee or warranty. The parties acknowledge that the Client, in selecting Blackstone to perform the services hereunder, is relying upon Blackstone's reputation for excellence in the performance of the service required hereunder. Blackstone shall perform the services in the manner of one who is a recognized specialist in the types of services to be performed. All deadlines set forth in the Agreement are binding and maybe modified only by subsequent written agreement by the parties. Blackstone shall devote such time to performance of its, her, or his duties under this Agreement as is reasonably necessary for the satisfactory performance of such duties within the deadlines set forth herein. Nothing in the foregoing shall be construed to alter the requirement that time is of the essence in the Agreement. 8 Laws. This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein and this Agreement shall be treated, in all respects, as an Ontario contract. Blackstone may deem it necessary or relevant to the Client to assign, transfer or subcontract this agreement to another interest. It is understood that Blackstone may not initiate such assignments or transfers without the prior written approval of the client. Blackstone Initials ~'_ Client Initials BLACKSTONE ENERGY SERVICES INC 9 Assignment and Sub-Contracting. The Consultant may not assign or transfer this agreement, or any interest therein or claim thereunder, or subcontract any portion of the work, thereunder, without the prior written approval of the Municipality 30 Notices. All notices and other communications required or permitted under this Contract shall be validly given, made, or served if in writing and delivered personally or sent by registered mail, ore-mail to Client at the following address: Company Name: The Corporation of the Municipality of Clarington Address: 40 Temperance Street City, Province, Postal: Bowmanville, Ontario, L1C 3A6 Attn: Purchasing Manager Office Phone: 905-623-3379, Ext. 402 Fax Number: 905-623-3330 and to Blackstone at the following address: Address: City, Province, Postal: Attn: Office Phone: Fax Number: 330 Bay St., Suite 304 Toronto, ON, MSH 258 Ryan Duffy 416-628-2828 416-840-9100 Either Party may change the above address by providing written notice in compliance with this section. 4 Blackstone Initials< Client Initials BLACKSTONE ENEA6Y SERVICES INC THE FOLLOWING SIGNATURES BY THE AUTHORIZED REPRESENTATIVES CONFIRM that Client and Blackstone are authorized to enter, and in fact are entering, into this Agreement commencing on the Effective Date: Blackstone Energy Services Inc. The Corporation of the Municipality Of Clarington Name: Ryan Duffy Title: Managing Partner Signature: Date: 5 Name: Jim Abernethy Title: Clerk;- =, ~" :.~:`_ _' ~- Signature: `. ~- iL~c ;~ - _ D mbe , 2009 Date: Title: Mayor Signature: - Date: ember Q;=-609 `----.- Name: #'8 F~ L~ L. _&3rrie Blackstone Initials ~_ Client Initials BLACKSTONE ENERGY SERVICES INC SCHEDULE 1 Energy Management Agreement The period of performance for this agreement will be from October 15, 2009 through to December 31, 2012, with two (2) optional one-year extensions (at the Client's discretion). The Management Fees of this Agreement will be: $250.00/month The additional Broker Fees of this Agreement will be: As below* The one-time non-refundable retainer fee of this Agreement will be: NA *Broker Fees Blackstone will instruct the supplier to waive any Broker Fees or Commissions upon execution of any contract for the Client. If the Supplier's systems and processes do not allow for this provision and these fees must be paid, Blackstone will ensure these fees are returned to the Client. 6 Blackstone Initials Client Initials