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R-1302 - 10/18/2013 - ELECTRIC AGGREGATION - Resolutions Supporting Documents ITEM 5.A. OF OAA- p co G O Co N11,��. AGENDA ITEM Special Meeting of the Board of Trustees of October 18, 2013 SUBJECT: Electric Aggregation Bids FROM: David Niemeyer, Village Manager BUDGET SOURCE/BUDGET IMPACT: RECOMMENDED MOTION: Motion to Approve RESOLUTION 2013-ELEC-PURCH- CNTRCT-R-1302, A Resolution Approving And Authorizing The Execution Of An Aggregation Program Agreement By And Between The Village Of Oak Brook And , For The Village's Electricity Aggregation Program. Background/History: As you know, the Village's current electric aggregation supply agreement expires December 31, 2013. Consultant Mark Pruitt conducted a request for qualifications for interested bidders. He has recommended that four companies: Integrys Energy Services, MC-Square, Constellation Energy, and Verde Energy be included as qualified bidders who are eligible to bid. Please see the attached October 4th memo from Mr. Pruitt. I have also include the request for pricing he sent to the four qualified bidders. Bids will actually be opened at 8:30AM on Friday. Mr. Pruitt will have a recommendation for the Village Board at 9am. Bidders will be asked to give us 12 and 16 month bids. The Village Board will need to approve an electric supply agreement with the low bidder. The draft agreement is attached. Recommendation: That the Village Board approve Resolution R-1302, approving and authorizing the execution of an Aggre ation Program Agreement by and between the Village Of Oak Brook and �trdt— t^ , for the Village's Electricity Aggregation Program. Last saved by dbettin JAAgenda Items\AG-electric aggregation bids 10-18-13.doc Last printed 10/16/2013 3:47 PM THE ILLINOIS COMMUNITY CHOICE AGGREGATION NETWORK October 4, 2013 TO: David Niemeyer, Village Manager,Village of Oak Brook FROM: Mark Pruitt, Principal, ICCAN RE: Supplier selection recommendation Thank you for the opportunity to review the five (5) responses to your Request for Qualifications (RFQ): "Village of Oak Brook Request for Qualifications Municipal Aggregation Procurement." Evaluating qualifications prior to requesting pricing is a strategy that will allow the Village to make a Supplier selection exclusively on the basis of price. Our methodology seeks to first remove respondents that present elevated risks in areas deemed as critical by the Village, and then to score and rank the remaining respondents. In this evaluation we reviewed submittals to assess critical risks in the areas of Corporate Credit, Customer Satisfaction, Responsiveness, and Proposed Changes to the Village's draft Agreement. Corporate Credit. Four of the five respondents (all but FirstEnergy Solutions) submitted information concerning the financial strength of their organizations. Audited annual reports or statements from an appropriate corporate affiliate acknowledging financial responsibility for the respondent were requested. The purpose of this requirement was to provide the Village with insight regarding the level of security each firm would provide during the course on an engagement. The table below conveys the credit ratings of the respondents or their corporate guarantors by Moody's. g�IS to "s",§� ? sa te¢ k - ;rg� ',. a= a<„x & £ r a a1 d$d`" m a a €d� .. an € €g ,�€ � -� yg k —_ rYt.'p 3`�,',aa�sz$r a F"en ` s & -,:g s�,. � ,.; .aa'ar i�b zap "s =¢�a§§ 91, w Constellation Energy Exelon Baa2 Lower Medium Grade First Energy Solutions First Energy Baa3 Lower Medium Grade Integrys Energy Services Integrys Baal Lower Medium Grade MC Squared Dayton Power& Light Baa3 Lower Medium Grade Company Verde Energy Shell A2 Upper Medium Grade The Village has determined that selecting a supplier with at least an investment grade corporate credit rating is essential to providing residents with the highest level of security. FirstEnergy Solutions and MC-Squared report corporate credit ratings that are one level above non-investment grade by Moody's. Also, we note that Verde Energy indicates a level of credit guarantee from Shell North America through a bilateral marketing agreement. All firms meet the creditworthiness standard set by the Village. However,the Village retains the right to alter that standard at any time. 10 West 35`h Street I Suite 1600 1 Chicago I Illinois 1 60616 1 219.921.3828 Customer Satisfaction. The five respondents submitted information concerning their current customer complaint ratings from the Illinois Commerce Commission (ICC). The ICC monitors the number of complaints registered against every supplier operating in Illinois and assigns a one to five -star rating to each supplier. The table below conveys the ratings for each of the respondents: *pit= gmllk ,.._.>. Constellation Energyrx� r� None First Energy Solutions None Integrys Energy Services None MC Squared None Verde Energy tyxYz� r;pNone The Village has determined that selecting a supplier w[th, at least an average leve&of customer satisfaction is essential to providing residents with a satisfactory levefof service. Verde Energy maintains the lowest level of satisfaction among the responding firms. All firms report above mirij' Lim ratings from the..ICC. Based on this, we judge that all respondents demonstrate an acceptable level ofwcustomer satisfaction. Responsiveness. The RFQ required the resppndent ,td- submit `specific information across a range of qualifications. The table belowcanvevs the ratirigs.for each O''Wie..respohd0ts in each of the qualifying factors identified in the RFQ: S Y "- `€ F° a & -w 3a aa€ , Overall quality n;d`corrp4eteP s of respkr�se " and completfnra,df forms Good Poor Excellent Excellent Good Qualification­_ s certified Alternative Retail pass No response Pass Pass Pass Electricity Supprauthorized to serve'.-_.. Capability and commitment to enf6`11'►ng accounts into the P'ragram pursuant taua Pass No response Pass Pass Pass defined schedule and =. guarantee of enrollment certainty Capability to facilitate monthly bilIIj! for'aII pass No response Pass Pass Pass accounts enrolled in the Program Ability to ensure undisrupted program status Pass No response Pass Pass Pass for PIPP participants Capability and commitment to expanding the Program by providing supply options for customers possessing accounts other than Pass No response Pass Pass Pass residential and small commercial retail accounts The Illinois Community Choice Aggregation Network 10 West 35`h Street I Suite 1600 1 Chicago I Illinois 1 60616 1 219.921.3828 General supply experience and capability Pass Pass Pass Pass Pass Commitment to comply with laws, Pass No response Pass Pass Pass ordinances,and statutes Absence of conflicts of interest as indicated Pass No response Pass Pass Pass in the Economic Disclosure Statement The nature and extent of any legal actions pending against the Respondent Pass No response Pass Pass Pass Acceptance of specific policies and requirements of the Village insurance Pass No Pass Pass Pass coverage levels. Not all firm submittals were responsive. The response,from FirstEnergy Solutionsfailed to address key elements put forth in the RFQ. These elements were designed td ipiidate that potential Su'pp11)jers to the Village's program acknowledged the levels of service and responsibilities r�guired by therVillage. In`light,of non-responsiveness, we recommend deeming FirstEnergy Solutions as not qualified apl Cie excluded frcrfi q.participating in the Request for Pricing stage of the Village's sd[icitatiQn.. � Proposed Changes to the Village's draft Agreernegt. Respzjbdents wer4 )11_ eructed to provide any alterations or proposed changes to the draft Agreement in their responses ;Iptegrys:iEnergy Services provided clarifying language to the Agreement aM -Squat provided subst.an xve proposed changes with regard to changes in law (Section 6.6.2). Verde En00,,providedsit filar propo ede changes to Section 6.6.2 as well as Articles 9 and 10 (Representation and Warrantee" ,and Confidentiality) ,Nate,, consider all proposed changes as appropriate and recommend their adoption by thev\hJlae pursuant to IegaJ review. Selection Rec=ommendation. T116--Village-received five responses to the RFQ. ICCAN recommends the rejection of certain prop©gals based on the faElowing 01611 as @ � € Z Z s _ e 6 - 3 s gzn$ s m S u ss s f d "IM AM AX 3 , Responsiveness to The firm did not acknowledge or show evidence of First Energy Solutions,,,, key:requirements of the commitment to meet minimum performance the RFQ requirements as set forth in the RFQ The remaining firms presented solid credentials and present safe choices for the Village. Of these firms, Integrys Energy Services has the highest number of municipal aggregations under management in Illinois (69) with Verde Energy(33), MC-Squared (29) and Constellation Energy(9) all showing sufficient local aggregation experience. ICCAN recommends that the Village deem Integrys Energy Services, MC-Square, Constellation Energy, and Verde Energy as Qualified Bidders and invite the firms to submit pricing proposals at a time convenient to the Village's needs. The Illinois Community Choice Aggregation Network 10 West 35`h Street I Suite 1600 1 Chicago I Illinois 1 60616 1 219.921.3828