20001024 2000-23ORDINANCE NO. 2000-23
AN ORDINANCE APPROVING A JOINT POWERS ASSOCIATION
AGREEMENT TO INCLUDE THE CITY OF FAIRFAX IN A PILOT PROGRAM
FOR JOINT AGGREGATION AND PROCUREMENT OF ELECTRIC ENERGY
BY VIRGINIA LOCAL GOVERNMENTS FROM ELECTRIC ENERGY
SUPPLIERS OTHER THAN VIRGINIA POWER IN PREPARATION FOR THE
UP-COMING ELECTRIC ENERGY DEREGULATION.
WHEREAS, the VML/VACo Virginia Power Steering Committee (the
"Committee"), composed of representatives of the City of Fairfax and other municipalities
and political subdivisions of the Commonwealth, has for over several decades negotiated on
behalf of such governmental units their purchase of electricity supply from Virginia Power as
a sole source provider; and
WHEREAS, Section 15.2-1300, et seq. of the Virginia Code (the "Joint Powers Act")
authorizes political subdivisions to exercise jointly powers they otherwise are authorized to
exercise independently, under the terms and conditions set forth in the Joint Powers Act; and
WHEREAS, the Electric Utility Restructuring Act (the "EUR Act") further authorizes
municipalities and other political subdivisions in the Commonwealth to aggregate their
electricity supply requirements for the purpose of their joint purchase of such requirements
from licensed suppliers, and the EUR Act provides that such aggregation shall not require
licensure; and
WHEREAS, the Virginia Public Procurement Act (the "Procurement Act") exempts
from its competitive sealed bidding and competitive negotiation requirements (the
"Requirements") the joint procurement by public bodies, utilizing competitive principles, of
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electricity supply purchased through member associations under the conditions set forth in the
Procurement Act; and
WHEREAS, the Committee has voted unanimously to fund an effort to aggregate
local governmental purchases of up to approximately 117,000,000 kWh of annual electricity
supply (the "Supply") from competitive licensed suppliers during a pilot period commencing
no earlier than January 1, 2001, and extending through no later than December 31, 2002 (the
"Pilot Period"); and
WHEREAS, the Committee recommends (i) the aggregation and joint procurement of
the Supply as provided in the form of the Joint Powers Association Agreement, a copy of
which is attached to and made a part of this Ordinance (the "Joint Powers Agreement');
(ii) that one or more requests for proposals ("RFP") be issued requesting licensed suppliers
(the "Proposers") to submit proposals (the "Proposals") to furnish the Supply to the interval
accounts (the "Accounts") selected by the Proposers from among approximately 200 interval
accounts of the municipalities and other political subdivisions that presently purchase
electricity supply from Virginia Power; (iii)that for the Accounts selected, approximately
30% of the kWh shall be for schools on Virginia Power's Rate Schedules 100 and 110 and
approximately 70% of the kWh shall be for non-schools on its Rate Schedule 130; and
(iv) that a contract or contracts for the furnishing of the Supply be awarded to the Proposer (or
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Proposers) by considering which Proposals best (i) meet the requirements and conditions of
the RFP; (ii)offer the greatest dollar savings for the aggregated group as a whole; and
(iii) offer a price for each Account selected that is projected to be lower than the projected
price that would otherwise obtain applying the Virginia Power supply rate under which the
Account would otherwise be served; and
WHEREAS, the Committee has agreed to provide funds from its operating budget in
an amount not to exceed $40,000 to pay the fees and expenses of its counsel, Christian &
Barton, L.L.P., and its utility consultant, the Columbia Group, to prepare the documents
necessary for the aggregation, the RFP process, the evaluation of the Proposals, and the award
and execution of the contract or contracts on behalf of the municipalities and political
subdivisions owning the Accounts for which the Supply will be furnished; and
WHEREAS, the Committee recommends that the municipalities and political
subdivisions participating in the aggregation process agree to contribute back to the
Committee's budget up to 25% of the estimated savings projected to be realized with respect
to such of their Accounts, if any, for which the Supply is to be furnished during the Pilot
Period, provided that the aggregate of such contributions back to the Committee shall not
exceed $40,000; and
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WHEREAS, the Committee recommends that the aggregation and procurement of the
Supply for the Pilot Period be effectuated as provided in the Joint Powers Agreement utilizing
competitive principles pursuant to an exemption from the Requirements; and
WHEREAS, the procurement of the Supply through the Joint Powers Agreement is
structured such that the projected costs of the electrical energy requirements of the City of
Fairfax can only be less than such costs would otherwise be under otherwise applicable rates,
and it has heretofore been determined on behalf of the City of Fairfax that competitive sealed
bidding and competitive negotiations by the City of Fairfax for such of the Supply as may be
applicable to any of its Accounts are not fiscally advantageous to the public; and
WHEREAS, it appearing to the Council of the City of Fairfax that the joint
procurement of the Supply pursuant to the Joint Powers Agreement is otherwise in the best
interests of the City of Fairfax
NOW, THEREFORE, BE IT HEREBY ORDAINED that:
(1) The aggregation and joint procurement of the Supply during the Pilot Period
pursuant to the Joint Powers Agreement is hereby approved.
(2) The Joint Powers Agreement and the performance of the terms and conditions
thereof on behalf of the City of Fairfax are hereby authorized and approved.
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(3) The City Manager is hereby authorized and directed to execute and deliver the
Joint Powers Agreement on behalf of the City of Fairfax in substantially the form presented to
this meeting.
(4) The return to the Committee of up to 25% of any savings projected to be
realized by the City of Fairfax on any of its Accounts, as provided in and subject to the overall
limitation set forth in the Joint Powers Agreement, is hereby authorized and approved.
(5) The payment obligations of the City of Fairfax pursuant to the provisions
hereof and the Joint Powers Agreement shall be subject to annual appropriation of requisite
funds therefor by the City of Fairfax.
(6) This Ordinance shall take effect immediately.
INTRODUCED:
PUBLIC HEARING:
ADOPTED:
Octoberl0,2000
October24,2000
October24,2000
The vote on the motion to adopt the ordinance was recorded as follows:
Councilman Coughlan
Councilman Greenfield
Councilman Lederer
Councilman Petersen
Councilman Rasmussen
Councilman Silverthorne
Vote
Aye
Aye
Aye
Aye
Aye
Aye
ATTEST:
~'~Mayo~
Date