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Anaheim, CA 92805
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CITY COUNCIL AGENDA REPORT
City of Anaheim
PUBLIC UTILITIES DEPARTMENT
DATE: FEBRUARY 27, 2024
FROM: PUBLIC UTILITIES DEPARTMENT
SUBJECT: PROFESSIONAL SERVICES AGREEMENT FOR ELECTRIC
UTILITY COST OF SERVICE STUDIES AND RELATED
CONSULTING SERVICES
ATTACHMENT (Y/N): YES ITEM # 18
GOVERNMENT CODE § 84308 APPLIES: YES
RECOMMENDATION:
That the City Council, by Motion:
1) Approve a professional services agreement (Agreement) with NewGen Strategies and Solutions, LLC (NewGen) for electric utility cost of service studies and related consulting services for a four-year term with two optional one-year extensions in an annual not-to-exceed amount of $60,000; 2) Authorize and direct the Public Utilities General Manager or designee, on behalf of the City of Anaheim (City), to execute the Agreement and related documents and take such actions as are necessary, required, or advisable to implement and administer the Agreement; and
3) Authorize de minimis changes that do not substantially change the terms and conditions of the Agreement, as long as such changes are determined to be de minimis by the City Attorney’s Office.
DISCUSSION:
At its meeting on January 24, 2024, the Public Utilities Board recommended that the City Council approve these actions.
As a non-for-profit municipal utility, Anaheim Public Utilities’ (APU) electric and water rates only recover the cost to serve customer-owners with no profit margin built into rates, in accordance with Section 1221 of the Anaheim City Charter. In order to maintain affordability while operating in a highly regulated industry, APU is seeking to initiate a cost of service study through an independent consultant to assess the efficacy of its rate recovery and allocation of costs among customer classes.
Professional Services Agreement for Electric Utility Cost of Service Studies and Related Consulting Services February 27, 2024
The proposed cost of service studies and related consulting services will evaluate electric utility rate structures, analyzing specific costs attributed to serving various classes of electric customers in Anaheim, including costs related to meeting all federal, state, and local legislative and regulatory mandates, generating and/or procuring electricity from throughout the Western United States, delivering electricity across the regional electric grid, upgrading aging infrastructure to provide reliable distribution of electricity, operating and maintaining the local electric system, and providing all electric service related customer support functions.
In August 2023, APU issued a Request for Proposal (RFP) via the City’s online solicitation portal to qualified consultants to perform electric utility cost of service studies and related consulting services. APU received and evaluated a total of three proposals in accordance with Council Policy 4.1 - Selection of Professional Consultants. The criteria used to evaluate the proposals included the ability to perform tasks outlined in the RFP; qualifications of individuals assigned to the project; appropriateness of approach and timeline; reasonableness of fees; demonstrated record of success on similar projects; and financial/rate model usability, flexibility, and effectiveness. Based on these criteria, APU staff ranked NewGen with the highest rated proposal.
Firm Ranking
NewGen Strategies and Solutions, LLC 1
GDS Associates, Inc. / EES Consulting 2
Baker Tilly US, LLP 3
NewGen has extensive experience performing detailed cost of service studies nationally, and has performed similar electric cost of service studies and related analyses successfully for municipal utilities in California within the last five years, including the cities of Alameda, Glendale, Pasadena, Redding, Riverside, and Anaheim. NewGen’s prior experience in Anaheim and cost-effective proposal demonstrated expertise and effectiveness in completing required work on schedule and on budget. The term of the Agreement is four years with two optional one-year extensions, in an annual not-to-exceed amount of $60,000.
IMPACT ON BUDGET:
Sufficient funds are included in APU’s Fiscal Year 2023/24 restricted budget, with subsequent years subject to City Council budget approval.
Respectfully submitted,
Dukku Lee
Public Utilities General Manager
Attachment:
1. Agreement with NewGen Strategies and Solutions, LLC for Electric Cost of Service Studies and Related Consulting Services