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HomeMy WebLinkAboutCOD-001-20Clarftwn Staff Report If this information is required in an alternate accessible format, please contact the Accessibility Coordinator at 905-623-3379 ext. 2131. Report To: General Government Committee Date of Meeting: January 27, 2020 Report Number: COD-001-20 Submitted By: Marie Marano, Director of Corporate Services Reviewed By: File Number: Report Subject: Andrew C. Allison, CAO Resolution#: * * By-law Number: Co-op Request for Proposal RFP-348-2019 — Consulting and Related Management and Administrative Services for the Supply of Natural Gas Recommendations: 1. That Report COD-001-20 be received; 2. That the Co-op RFP submission received from Blackstone Energy Services Inc., Toronto, for the provision of consulting and related services for the supply of natural gas and to act as an agent of the Municipality of Clarington to execute direct purchase agreements (subject to the approval of the Corporate Service's Department) for a term of three years for an estimated annual fee of $12,690.00 per year (excluding HST), based on the current number of accounts and subject to change over the contract term be accepted; 3. That pending satisfactory performance, the Purchasing Manager be given the authority to extend the contract for up to two additional one-year terms; and 4. That all interested parties listed in Report COD-001-20 and any delegations be advised of Council's decision. Municipality of Clarington Report COD-001-20 Report Overview Page 2 To request approval for the award of Co-op Request for Proposal RFP-348-2019 for the provision of consulting and related management and administrative services for the supply of natural gas. 1. Background 1.1 The current agreements for these services expired on November 30, 2019. The Region of Durham and the Municipality of Clarington have for a number of years used a co- operative approach to obtain proposals and secure a qualified natural gas consultant to purchase natural gas. 1.2 Using a competitive process, the Region of Durham being the host agency and the Municipality of Clarington developed a cooperative Request for Proposal (RFP). 1.3 RFP-348-2019 was issued by the Region of Durham Supply and Services Section and advertised on their website on August 7, 2019. The RFP closed on September 4, 2019. 1.4 The Region of Durham awarded a contract to Blackstone in late November as the Region and the Municipality's portion are awarded independent of each other. 2. Analysis 2.1 Proposals were received from the following four companies: x Local Authority Services (LAS). x Blackstone Energy Services Inc. x ECNG Energy Group. x Jupiter Energy Advisors Inc. 2.2 The four proposals received were reviewed and determined to be compliant with the RFP submission requirements. Representatives from the two participating agencies evaluated and scored each of the proposals based on the following criteria and then met to discuss and achieve a consensus on the ranking of each respondent based on the established criteria: x Understanding of the RFP requirements; x Company background, qualifications and experience; Municipality of Clarington Report COD-001-20 x Team experience and qualification; x Methodology and management plan; x Financial conditions, capacity and integrity; x Proposed fees; x Client reference feedback (Short-listed respondents only); and x Respondent interviews. Page 3 2.3 The RFP document stipulated that only the two top scoring respondents would be shortlisted and be allowed to participate in the interview process. 2.4 The following two companies met the established threshold and were shortlisted: x Blackstone Energy Services Inc. x Jupiter Energy Advisors Inc. 2.5 Scores were compiled with the proposal from Blackstone Energy Services Inc., receiving the highest score overall based on the requirements of this RFP. Blackstone Energy Services Inc. provided the most comprehensive proposal that offered the lowest fees and addressed the following key requirements: x Value added services including market intelligence and analysis, monitoring of pricing benchmarks and forward price forecasting; x Enbridge account administration services including consumption forecasting, invoice management, monitoring of gas balances and variances and assessment of alternative volume rate plan options; x As the Municipality's agent, reviewing and providing recommendations with respect to direct purchase agreements with approved suppliers in accordance with the Municipality's Hedging Agreement; and x Providing financial reports to verify transactions, price reconciliation and inventory balances. 2.6 Blackstone Energy Service Inc.'s proposed fees for the Municipality of Clarington for the current twenty-two active accounts is $12,690.00 per year and will be held firm for the entire contract term including optional years. Municipality of Clarington Page 4 Report COD-001-20 2.7 Blackstone Energy Services Inc. is presently performing these services acceptably for the Municipality of Clarington and the Region. 3. Comment 3.1 Due to the volatile nature of natural gas commodity pricing, it is not possible to forecast with accuracy the impact of natural gas pricing on the 2020 budget. However, based on current commodity pricing, market conditions and future supply forecasts it is likely that natural gas prices will increase or fluctuate. The impact of price escalations for future years may be minimized through fixed price/volume purchases of natural gas. The Municipality may lock in all or a portion of the total natural gas requirements under this type of agreement. Opportunities for fixed price/volume purchases will be monitored or an ongoing basis by the consultant. 4. Concurrence This report has been reviewed by the following Directors who concur with the recommendations: Trevor Pinn, Director of Finance/Treasurer Steve Brake, Acting Director of Operations George Acorn, Acting Director of Community Services 5. Conclusion This report sets out the proposal evaluation results and recommendation for an award of contract to Blackstone Energy Services Inc. Toronto, for the provision of consulting and related management and administrative services for the supply of natural gas. Staff Contact: David Ferguson, Purchasing Manager, 905-623-3379 ext. 2209 or dferguson@clarington.net. Attachments: Not Applicable List of Interested Parties available from Department.