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HomeMy WebLinkAbout5.1015 Original ContractAGREEMENT FOR PROFESSIONAL SERVICES BETWEEN THE CITY OF PORT ANGELES AND EES CONSULTING, INC. RELATING TO: Retail Tiered Rate Methodology Study THIS AGREEMENT is made and entered into this , ` day of 2010, by and between THE CITY OF PORT ANGELES, a non - charter code city of the State of Washington, (hereinafter called the "CITY ") and EES Consulting, Inc., a Washington Corporation authorized to do business in the state of Washington (hereinafter called the "CONSULTANT "). WHEREAS, the CITY desires professional services related to a Retail Tiered Rate Methodology Study for its electric utility; and WHEREAS, the CITY desires to engage the professional services and assistance of a qualified consulting firm to perform the scope of work as detailed in Exhibit A, and WHEREAS, the CONSULTANT represents that it is in full compliance with the statutes of the State of Washington for professional registration and /or other applicable requirements, and WHEREAS, the CONSULTANT represents that it has the background, experience, and ability to perform the required work in accordance with the standards of the profession, and WHEREAS, the CONSULTANT represents that it will provide qualified personnel and appropriate facilities necessary to accomplish the work; NOW, THEREFORE, in consideration of the above representations and the terms, conditions, covenants, and agreements set forth below, the parties hereto agree as follows: I SCOPE OF WORK The scope of professional services to be performed and the results to be achieved by the CONSULTANT shall be as detailed in the attached Exhibit A and shall include all services and material necessary to accomplish the work. The CITY may review the CONSULTANT'S work product, and if it is not satisfactory, the CONSULTANT shall make such changes as may be required by the CITY. Such changes shall not constitute "Extra Work" as related in Section XII of this Agreement. The CONSULTANT agrees that all services performed under this Agreement shall be in accordance with the standards of the profession and in compliance with applicable federal, state and local laws. The Scope of Work may be amended upon written approval of both parties. PW 0410_01 Professional Services Agreement Page 1 of 7 Revised [05/12/06] II OWNERSHIP OF DOCUMENTS Upon completion of the work, all documents, exhibits, photographic negatives, or other presentations of the work shall become the property of the CITY for use without restriction and without representation as to suitability for reuse by any other party unless specifically verified or adapted by the CONSULTANT. However, any alteration of the documents, by the City or by others acting through or on behalf of the City, will be at the City's sole risk. III DESIGNATION OF REPRESENTATIVES Each party shall designate its representatives in writing. The CONSULTANT'S representative shall be subject to the approval of the CITY. IV TIME OF PERFORMANCE The CONSULTANT may begin work upon execution of this Agreement by both parties and the duration of the Agreement shall extend through March 31, 2011. The work shall be completed in accordance with the schedule set forth in the attached Exhibit C. V PAYMENT The CITY shall pay the CONSULTANT as set forth in this section of the Agreement. Such payment shall be full compensation for work performed, services rendered, and all labor, materials, supplies, equipment and incidentals necessary to complete the work. A. Payment shall be on the basis of the CONSULTANT'S standard billing rates as set forth in Exhibit B multiplied by the actual hours worked, cost for actual labor, overhead and profit plus CONSULTANT'S direct non -salary reimbursable costs as set forth in the attached Exhibit B. B. The CONSULTANT shall submit invoices to the CITY on a monthly basis. Invoices shall detail the work, hours, employee name, and hourly rate; shall itemize with receipts and invoices the non -salary direct costs; shall indicate the specific task or activity in the Scope of Work to which the costs are related; and shall indicate the cumulative total for each task. C. The CITY shall review the invoices and make payment for the percentage of the project that has been completed less the amounts previously paid. D. The CONSULTANT invoices are due and payable within 30 days of receipt. In the event of a disputed billing, only the disputed portion will be withheld from payment. E. Final payment for the balance due to the CONSULTANT will be made after the completion of the work and acceptance by the CITY. F. Payment for "Extra Work" performed under Section XII of this Agreement shall be as agreed to by the parties in writing. PW 0410_01 Professional Services Agreement Page 2 of 7 Revised [05/12/06] VI MAXIMUM COMPENSATION Unless otherwise agreed to in writing by both parties, the CONSULTANT'S total compensation and reimbursement under this Agreement, including labor, direct non -salary reimbursable costs and outside services, shall not exceed the maximum sum of $24,500.00. The budget for each task is as set forth in the attached Exhibit B. Budgets for task(s) may be modified upon mutual agreement between the two parties, but in any event, the total payment to CONSULTANT shall not exceed $24,500.00. VII INDEPENDENT CONTRACTOR STATUS The relation created by this Contract is that of owner - independent contractor. The Contractor is not an employee of the City and is not entitled to the benefits provided by the City to its employees. The Contractor, as an independent contractor, has the authority to control and direct the performance of the details of the services to be provided. The Contractor shall assume full responsibility for payment of all Federal, State, and local taxes or contributions imposed or required, including, but not limited to, unemployment insurance, Social Security, and income tax. VIII EMPLOYMENT Employees of the CONSULTANT, while engaged in the performance of any work or services under this Agreement, shall be considered employees of the CONSULTANT only and not of the CITY, and claims that may arise under the Workman's Compensation Act on behalf of said employees while so engaged, and any and all claims made by a third party as a consequence of any negligent act or omission on the part of the CONSULTANT'S employees while so engaged, on any of the work or services provided to be rendered herein, shall be the sole obligation and responsibility of the CONSULTANT. In performing this Agreement, the CONSULTANT shall not employ or contract with any CITY employee without the City's written consent. IX NONDISCRIMINATION The CONSULTANT shall conduct its business in a manner, which assures fair, equal and non - discriminatory treatment of all persons, without respect to race, creed or national origin, or other legally protected classification and, in particular: A. The CONSULTANT shall maintain open hiring and employment practices and will welcome applications for employment in all positions, from qualified individuals who are members of minorities protected by federal equal opportunity /affirmative action requirements; and, B. The CONSULTANT shall comply with all requirements of applicable federal, state or local laws or regulations issued pursuant thereto, relating to the establishment of non discriminatory requirements in hiring and employment practices and assuring the service of all persons without discrimination as to any person's race, color, religion, sex, Vietnam era veteran status, disabled veteran condition, physical or mental handicap, or national origin. PW 0410_01 Professional Services Agreement Page 3 of 7 Revised [05/12/06] X SUBCONTRACTS A. The CONSULTANT shall not sublet or assign any of the work covered by this Agreement without the written consent of the CITY. B. In all solicitation either by competitive bidding or negotiation made by the CONSULTANT for work to be performed pursuant to a subcontract, including procurement of materials and equipment, each potential subconsultant or supplier shall be notified by the CONSULTANT of Consultant's obligations under this Agreement, including the nondiscrimination requirements. XI CHANGES IN WORK Other than changes directed by the CITY as set forth in Section 1 above, either party may request changes in the scope of work. Such changes shall not become part of this Agreement unless and until mutually agreed upon and incorporated herein by written amendments to this Agreement executed by both parties. XII EXTRA WORK The CITY may desire to have the CONSULTANT perform work or render services in connection with this project, in addition to the Scope of Work set forth in Exhibit A and minor revisions to satisfactorily completed work. Such work shall be considered as "Extra Work" and shall be addressed in a written supplement to this Agreement. The CITY shall not be responsible for paying for such extra work unless and until the written supplement is executed by both parties. XIII TERMINATION OF AGREEMENT A. The CITY may terminate this Agreement at any time upon not less than ten (10) days written notice to the CONSULTANT. Written notice will be by certified mail sent to the consultant's designated representative at the address provided by the CONSULTANT. B. In the event this Agreement is terminated prior to the completion of the work, a final payment shall be made to the CONSULTANT, which, when added to any payments previously made, shall compensate the CONSULTANT for the percentage of work completed. C. In the event this Agreement is terminated prior to completion of the work, documents that are the property of the CITY pursuant to Section I I above, shall be delivered to and received by the CITY prior to transmittal of final payment to the CONSULTANT. XIV INDEMNIFICATION /HOLD HARMLESS CONSULTANT shall defend, indemnify and hold the CITY, its officers, officials, employees and volunteers harmless from any and all claims, injuries, damages, losses or suits including attorney fees, arising out of or resulting from the negligent acts, errors or omissions of the CONSULTANT in performance of this Agreement, except for injuries and damages caused by the sole negligence of the CITY. PW 0410_01 Professional Services Agreement Page 4 of 7 Revised 105/12/06] The CITY agrees to indemnify the CONSULTANT from any claims, damages, losses, and costs, including, but not limited to, attorney's fees and litigation costs, arising out of claims by third parties for property damage and bodily injury, including death, caused solely by the negligence or willful misconduct of the CITY, CITY's employees, or agents in connection with the work performed under this Agreement. If the negligence or willful misconduct of both CONSULTANT and CITY (or a person identified above for whom each is liable) is a cause of such damage or injury, the loss, cost, or expense shall be shared between the CONSULTANT and the CITY in proportion to their relative degrees of negligence or willful misconduct and the right of indemnity shall apply for such proportion. Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the CONSULTANT, the CITY, and the officers, officials, employees, and volunteers of either, the CONSULTANT'S liability hereunder shall be only to the extent of the CONSULTANT'S negligence. It is further specifically and expressly understood that the indemnification provided herein constitutes the CONSULTANT'S waiver of immunity under Industrial Insurance, Title 51 RCW, solely for the purposes of this indemnification. This waiver has been mutually negotiated by the parties. The provisions of this section shall survive the expiration or termination of this Agreement. However, the CONSULTANT expressly reserves its rights as a third person set forth in RCW 51.24.035. XV INSURANCE The CONSULTANT shall procure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work hereunder by the CONSULTANT, its agents, representatives, employees or subcontractors. No Limitation. CONSULTANT'S maintenance of insurance as required by the agreement shall not be construed to limit the liability of the CONSULTANT to the coverage provided by such insurance, or otherwise limit the CITY'S recourse to any remedy available at law or in equity. A. Minimum Scope of Insurance Consultant shall obtain insurance of the types described below: 1. Automobile Liability insurance covering all owned, non - owned, hired and leased vehicles. Coverage shall be written on Insurance Services Office (ISO) form CA 00 01 or a substitute form providing equivalent liability coverage. If necessary, the policy shall be endorsed to provide contractual liability coverage; and, 2. Commercial General Liability insurance shall be written on ISO occurrence form CG 00 01 and shall cover liability arising from premises, operations, independent contractors, and personal injury and advertising injury. The City shall be named as an insured under the Consultant's Commercial General Liability insurance policy with respect to the work performed for the City; and, PW 0410_01 Professional Services Agreement Revised [05/12/06] Page 5 of 7 3. Workers' Compensation coverage as required by the Industrial Insurances laws of the State of Washington; and 4. Professional Liability insurance appropriate to the Consultant's profession. B. Minimum Amounts of Insurance Consultant shall maintain the following insurance limits: 1. Automobile Liability insurance with a minimum combined single limit for bodily injury and property damage of $1,000,000 per accident. 2. Commercial General Liability insurance shall be written with limits no less than $1,000,000 each occurrence, $2,000,000 general aggregate. 3. Professional Liability insurance shall be written with limits no less than $1,000,000 per claim and $1,000,000 policy aggregate limit. C. Other Insurance Provisions The insurance policies are to contain, or be endorsed to contain, the following provisions for Automobile Liability, Professional Liability and Commercial General Liability insurance: 1. The Consultant's insurance coverage shall be primary insurance as respect the City. Any insurance, self - insurance, or insurance pool coverage maintained by the City shall be excess of the Consultant's insurance and shall not contribute with it. 2. The Consultant's insurance shall be endorsed to state that coverage shall not be cancelled, suspended or materially changed by either party, except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the City. 3. Any payment of deductible or self - insured retention shall be the sole responsibility of the CONSULTANT. 4. The CONSULTANT'S insurance shall contain a clause stating that coverage shall apply separately to each insured against whom claim is made or suit is brought, except with respects to the limits of the insurer's liability. D. Acceptability of Insurers Insurance is to be placed with insurers with a current A.M. Best rating of not Tess than A:VII. E. Verification of Coverage Consultant shall furnish the City with original certificates and a copy of the amendatory endorsements, including but not necessarily limited to the additional insured endorsement, evidencing the insurance requirements of the Consultant before commencement of the work. PVV 0410_01 Professional Services Agreement Page 6 of 7 Revised [05/121061 XVI APPLICABLE LAW This Agreement shall be construed and interpreted in accordance with the laws of the State of Washington, and in the event of dispute the venue of any litigation brought hereunder shall be Clallam County. XVII EXHIBITS AND SIGNATURES This Agreement, including its exhibits, constitutes the entire Agreement, supersedes all prior written or oral understandings, and may only be changed by a written amendment executed by both parties. The following exhibits are hereby made a part of this Agreement: Exhibit A - Scope of Work Exhibit B — Budget Costs for Each Task Exhibit C - Schedule for the Work IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above. CITY OF PORT ANGELES DAN DI GUILIO, MAY CONSULTANT aLudi " U TITLE: President PW 0410_01 Professional Services Agreement Page 7 of 7 Revised [05/12/06] APPROVED AS TO FORM: WILLIAM E. BLOOR, CITY ATTORNEY ATTEST: i /> Imo• JvESSA HURD , CITY CLERK Retail TRM Study Exhibits EXHIBIT A Retail TRM Study Scope of Services The primary components of the Retail Tiered Rate Methodology (TRM) rate design study include: • Update background data (revenue requirement, rate base and load data) and review load data • Evaluate cash reserve needs • Review capital improvement financing strategy impacts • Determine allocated revenue requirements by customers class • Design rate options for customers that incorporate energy efficiency and demand response • Evaluate alternatives, make recommendations and present results in a clear manner to the City's staff and policymakers TASK 1: Update Background Data and Review Load Data Objective: The Consultant will establish the study's foundation by conducting a structured data collection and analysis process. This task shall include updating the relevant data fields and other necessary revisions to a COSA model to be provided by the City or the Consultant. The Consultant will strive to uncover any data limitations, issues or concerns that will need to be addressed early in the process to ensure successful completion of the study. The Consultant shall update and review all data required for the remaining analysis. 1. The Consultant shall provide the City with a data request in spreadsheet form to obtain 2009 actual revenues, expenses, wholesale power costs, retail sales, and load data to be incorporated into the Consultant's COSA model. a. Rate classes included in this study are the City's distribution system customers: residential, general services, general services demand. general services demand — primary metered, primary service, lighting, municipal water pumping, and nonprofit tax deductible. The City's Industrial Transmission rate class is not included in this study. b. The test -year shall be developed using the City's 2009 actual revenues and expenses. The electricity consumption data will include the actual heavy and light -load hour energy consumption and the distribution system's non- coincident peak (NCP) demand per rate 3. Based on actual 2009 total system data and billed energy and demand data, heavy and light load energy and non - coincident demand data will be verified for each rate class. TASK 2: Evaluate Cash Reserve Needs Objective: The Consultant will review City policies regarding cash reserve management requirements in light of BPA's wholesale TRM and the revenue risk inherent in each proposed rate design option. This review will ensure maintenance of the minimum threshold for each fund listed below, and the financial and rate impacts for establishing any new or revised reserves or target levels. The Consultant shall identify the current and projected cash reserves needed for the City. 1. The following reserves will be reviewed: 1) cash (operating) reserves; 2) rate stabilization (TRM) reserves; 3) energy conservation and cash restricted for loan guarantees; 4) bond reserves, 5) contributions to the Light Operations Facility replacement fund, and; 6) resumed contributions to the City's Morse Creek Hydroelectric Project. class, which shall be reviewed by the Consultant prior to use in the study and allocated to the applicable rates classes. The City's most recent COSA assumptions and methodology shall be reviewed and possible modifications will be evaluated if any material changes in the City's cost - causation factors may have occurred since the last COSA was developed. The current and recommended cash reserve levels, in particular given the new risks related to the wholesale TRM, will be provided to the City. TASK 3: Evaluate Capital Improvement Financing Strategy Objective: The objective of the capital improvements financing strategy is to determine the optimal mix of available resources from rate revenues, connection fees, and debt financing to ensure financial health of the City and to smooth the impacts on retail rates from capital funding needs for current and future rate - payers. The analysis shall consider depreciation and compare the City's debt ratio for the electric utility to industry benchmarks and provide recommendations on future policies related to debt service and the cash - financing of capital improvements. The Consultant shall identify the current and projected cash reserves needed for the City. 1. The options reviewed will incorporate a combination of debt financing, revenues from rates and connection fees to determine the optimum financing strategy for the City. 2. Each option will be evaluated based on the resulting debt /equity ratio and overall rate increases needed. 3. The City's CIP budget will be examined and several scenarios will be analyzed to determine the optimal financing strategy for the City. TASK 4: Allocate Revenue Requirement by Class Objective: The Consultant shall determine an equitable method to allocate the annual revenue requirement to the various customer classes using generally accepted cost allocation methods while providing up to three methods to allocate the City's BPA wholesale TRM power costs to each rate class. Wholesale power costs for 2009 include, but are not limited to, HLH Energy, LLH Energy, CP Demand, and Transmission, shall be compared to projected TRM wholesale power costs, which include, but are not limited to, HLH Energy, LLH Energy, NCP Demand, and Transmission. 1. Costs will be functionalized by itemizing plant investments and related expenses by the following functions:generation, transmission, distribution, Customer services, conservation, and administrative and general (A&G). 2. Costs will be classified to determine whether each individual plant investment or cost was incurred to meet a customer's demand, energy or customer related need. 3. Costs will be allocated to the City's rate classes by developing allocation factors based on customer information, historic load data and projected usage by rate class. Where 2009 data is not available, data from the City's previous COSA will be applied. 4. Consultant shall provide a minimum of three different allocation methods to allocate BPA's future wholesale TRM power supply costs to each rate class after discussion with City staff. These could include assigning HWivt by individual rate class or melding Tier 1 power costs across all customer rate classes. The allocation methods will also address Tier 2 power supply cost allocation and the potential impact of growth differences by customer class on retail rate revenue risk and economic development. 5. Average unit costs by functional category will be provided based on the allocated costs and billing determinants developed for each rate class. Unit costs will be presented for energy (0/kWh), demand ($/kW), and customer related ($ICustomer/Mo.) charges for each customer rate class. The average unit costs represent cost of service rates and can be used as an input in the rate setting process. The unit costs can also be used to compare the rate impact of different allocation methodologies. 6. Any cost -of- service subsidies that may exist between rate classes will be identified in this task and addressed before starting any rate design. TASK 5: Develop Rate Design Options Objective: This task includes evaluating the City's existing retail uniform and time -of -use rates to reflect the impacts of wholesale TRM power costs that must be feasible to deploy using the City's SunGuard Public Sector NaviLine® customer information system. The Consultant shall develop at least three retail rate design options (e.g., demand response, rates that un- bundle distribution and commodity costs, rates that mirror the BPA wholesale TRM design, inverted block rates, etc.) for each rate class. The rate design options will be developed to be consistent with the City's cash reserve needs and capital improvement financing strategy, and generate sufficient revenue to meet the projected requirements. The Consultant shall develop reasonable rate options using a variety of approaches, ranging from the current rate design to strict cost based rates incorporating available data and billing system capabilities. 1. Different rate options based upon the goals and objectives identified by the City will be analyzed. Rate options can include both bundled and unbundled pricing to show the impacts of potential retail access and power supply allocation methodologies. 2. Proposed rates for energy (0/kWh), demand ($ /kW), and customer related ($ /Customer /Mo.) charges will be provided for each customer class for each year of the study period. 3. Alternative rate designs including blocks, time of use, seasonal, and other appropriate charges may be developed, desired by the City. Consideration of Tier 1 and 2 power costs from BPA will be incorporated into rates. For each rate design, the Consultant will discuss how the rate design encourages energy efficiency. 4. For each rate class, a demand response rate based on BPA's TRM demand rate will be developed. 5. Revenues for each of the rate options will be compared to the system -wide and individual customer class revenue requirements including determining the percentage of revenue from fixed vs. variable portion of the rate. 6. Customer bill comparisons will be developed to determine the rate impacts on different customer classes for different rate alternatives. 7. Provide recommendation for metering components (e.g., heavy and light load hour energy consumption, NCP demand, etc.) that the City's new AMI system will need to be capable of providing. TASK 6: Meetings, Presentations and Reports Objective: The Consultant shall present the options identified above and the results to staff, senior management, the City's Utility Advisory Committee and the City Council in a clear and easy to understand manner. 1. Provide support in presenting results and making recommendations to the City's management staff and policymakers, as desired. 2. Participate in two conference calls with staff to discuss preliminary results 3. Participate in up to two video conferencing with senior management to discuss alternatives and recommendations 4. Participate in up to two presentations to the City's Council and Utility Advisory Committee to present alternatives and receive policy direction. 5. A draft report with the results of the study will be provided after the preliminary analysis is finalized. 6. Once the City has reviewed the draft report, the Consultant shall incorporate any comments or suggestions into a final report. The Consultant shall provide the City with three copies of the final report, including all study spreadsheets and electronic copies of the report. EXHIBIT B Time Line A proposed schedule to complete the work is provided below. April 2010 . 119 ay 2010 June 2010 July 2010 Data Gathering and Review Reserve Analysis CIF Financing Strategy Allocated Rev. 'Requirement Rate Design Draft Report/Presentations Final Report/Presentations 6 EXHIBIT C Budget EES Consulting charges the following hourly billing rates. President $185 Managing Director 160 Manager 155 Senior Project Manager 150 Project Manager 145 Senior Analyst/Engineer 140 Analyst/Engineer 135 Senior Administrative Assistant 120 Out -of- pocket expenses will be billed separately at their actual cost to EES Consulting. Except for any authorized travel expenses, it is anticipated that these expenses will be minimal. The proposed scope includes a basic revenue requirement allocation study with emphasis on complex power supply allocation, discussion of cash reserve needs and CIP financing strategy and detailed rate design. The budget below assumes that the City will provide 2009 financial and load data in a spreadsheet format provided by the Consultant. Based on this scope, the proposed budget is the following: Updated COSA information $ 3,000 CIP Financing Strategy 2,000 Cash Reserve Needs 2,000 Allocated Revenue Requirement 5,000 Rate Design 10,000 Meetings/Presentations 2.500 Total $24,500