Agenda Report
Fullerton City Council
MEETING DATE: MAY 16, 2023
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: ERIC LEVITT, CITY MANAGER
PREPARED BY: KIM CHAUDHRY, SENIOR ADMINISTRATIVE ANALYST SUBJECT: CONSULTANT SELECTION TO ANALYZE ORANGE COUNTY POWER AUTHORITY JOINT POWERS AGREEMENT WITHDRAWL COSTS
SUMMARY
City Council directed staff determine the cost to hire a consultant to analyze the process and costs to withdraw from the Joint Powers Agreement (JPA) with Orange County Power Authority (OCPA) on April 4, 2023. Staff received proposals from three consultants for City Council consideration.
RECOMMENDATION
Select consultant to perform analysis.
Authorize City Manager to enter into an agreement with the selected consultant to analyze costs and process to withdraw from the OCPA JPA.
CITY MANAGER REMARKS
Based on the staff review, there are two proposals that the City Manager is comfortable with to accomplish the City Council goal of a third party review and those two companies are MRW & Associates or SEE.
The City Manager recommends that the City Council approve contracting with MRW & Associates based on their proposal being more thorough. However, I am also comfortable with contracting with SEE based on their analysis that they are providing the City of Irvine.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statement:
Fiscal and Organizational Stability.
FISCAL IMPACT
The following lists the proposed agreement costs to analyze withdrawing from the OCPA JPA:
Consultant
Agreement Cost
ACES Power
$12,675
SEE
$25,000
MRW & Associates
$38,750
DISCUSSION
The City Manager’s Office engaged with OCPA regarding the cost and process to withdraw membership if City Council desired withdrawal in the future. Withdrawal requires an analysis performed by a consulting company to identify the amount of the City’s responsibility under Section 6.3 of the JPA if the City provided a 180-day notice to withdraw from OCPA. The potential withdrawal cost includes any liabilities attributable to the City through the effective date of withdrawal, actual costs or damages incurred by OCPA as a direct result of the withdrawal or costs or obligations associated with City participation in a particular program.
ACES Power, SEE and MRW & Associates propose to provide an assessment of energy, capacity and environmental attribute transaction liquidation costs. This involves reviewing and analyzing Power Purchase Agreements, transaction confirmations and other documents provided by Fullerton or OCPA, as well as an analysis of potential City costs for withdrawing from the JPA.
MRW and SEE would describe how the City might negotiate departure costs and the likely process the City would need follow and present their findings to City Council. The MRW & Associates proposal totals approximately $38,750. The SEE proposal totals approximately $25,000.
The City of Buena Park used MRW & Associates and the City of Irvine used SEE. Both proposals cost below the original estimate provided by in the previous presentation.
The ACES proposal does not include a description of options for departure cost negotiations nor a City Council presentation. The ACES proposal totals approximately $12,675.
Attachments:
Attachment 1 – ACES Power Proposal
Attachment 2 – MRW & Associates Proposal
Attachment 3 – SEE Proposal
Consultant Agreement OCPA JPA Withdrawal Costs
May 16, 2023 - Page 2