The City of Brea has spent over $1 million for utility expenses during the past fiscal year. With each passing year, energy costs continue to rise. After reviewing these expenditures, staff determined that the services of a consultant with expertise in utility cost reductions was necessary to assist the City in its cost reduction efforts.
In April 2017, City staff issued a Request for Proposal (RFP) #170424-1 seeking experienced firms to conduct a comprehensive assessment of the City of Brea's utility costs to help reduce future electric and gas costs and to recover past overpayments. While the comprehensive scope of services can be found in Exhibit A of the attached Professional Services Agreement, along with compensation rates in Exhibit B, the following is a summary of those services:
- Past Cost Recovery Services: consists of examining the bills of existing energy suppliers to identify errors, submit claims, and obtain refunds. This phase is expected to be completed within six months, with ongoing utility bill monitoring commencing thereafter for the contract term.
- Future Cost Containment Services: consists of performing a comprehensive comparative analysis of rate plans and/or providers for those energy services that can be purchased from alternate sources. This phase is expected to last between six to twelve months.
Request for proposals were sent to six firms and four of them submitted responses for the City's consideration. An evaluation team comprised of staff from Public Works and Administrative Services carefully reviewed and ranked the written proposals based on each company’s qualifications, experience, necessary resources to perform the work and responsiveness to the City’s needs and specifications.
Based on proposals that demonstrated a comprehensive list of services provided, public utilities cost reduction and recovery experience, and reasonable timeframes for completion of the project, the evaluation team narrowed the selection down to the top two firms: Cost Control Associates and Troy and Banks. After conducting interviews, listening to presentations, reviewing the cost proposals, and receiving best and final responses from these two firms, Cost Control Associates was determined to be the best qualified firm. Additionally, Cost Control Associates had the lowest fee rates for cost recovery and reduction. Their rates are 20% for cost recovery and 23% for cost reductions. Since the potential amounts of recovery and reduction of utility costs will not be known until such time the refunds are received and the reductions are identified, the actual fees paid the consultant will be determined at those times.
While the initial focus will be on the 288 service accounts for electrical and the 12 service accounts for natural gas utilities, and though not specifically required in this RFP or in the PSA, staff was able to secure the same cost recovery and cost reduction rates for telecommunication and other utility rates, should those services be desired. After determination of the consultant's performance and results in recovering and reducing the electrical and natural gas accounts, staff may recommend amendments to this PSA to include the telecommunication and other utility rates for consideration. Staff recommends that the City Council authorize the City Manager to execute any such amendments without the need to return to City Council for approval and execution of same to expedite the additional cost recovery and reduction amounts.
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