HomeMy WebLinkAbout~Master - Authorizing the Director of Electric Services to approve an Amendment to the Existing Natural Gas Supply Contract RESOLUTION NO. 19-442
RESOLUTION AUTHORIZING THE DIRECTOR OF ELECTRIC SERVICES TO APPROVE
AN AMENDMENT TO EXTEND THE EXISTING NATURAL GAS SUPPLY CONTRACT
TWO OR THREE YEARS
FOR THE CITY OF AMES,IOWA
WHEREAS, on October 15,2015, a five-year fixed price contract was awarded to Macquarie
Energy LLC, for the purchase of 12,000 MMBtu/per day of natural gas for Electric Services for the
contract period; and,
WHEREAS,the Power Plant typically burns 12,000 MMBtu of natural gas daily along with
refuse-derived-fuel to generate electricity; and,
WHEREAS,the contract has created efficiency and flexibility in the purchase of a valuable
commodity, ensuring that the City has reliable service while creating stable generation costs; and,
WHEREAS, staff, in consultation with a Natural Gas consultant,has determined that this is a
prudent time to secure a price and add two to three years of supply to the existing contract; and,
WHEREAS,the challenge in arranging a contract extension is to determine the price and in the
natural gas market, it is not possible to ask for a price today and have that price be guaranteed for five
days as the price expires within a 24-hour period; and,
WHEREAS, staff is proposing that the current contract has a fixed price for natural gas set at
$3.02 per MMBtu and forward price curves for two years out, show natural gas futures in the $2.80-
$2.85 MMBtu range; and,
WHEREAS, staff is requesting the authority to commit the City to a two-or three-year extension
if the overall cost will be $2.80/MMBtu or less.
NOW, THEREFORE,BE IT RESOLVED by the City Council of the City of Ames,Iowa,that the
Electric Services Director is authorized to approve an Amendment to the contract with Macquarie Energy,
LLC of Houston,Texas,and extend the existing contract two to three years,if the overall contract cost falls
to or below$2.80/MMBtu.
ADOPTED THIS 271h day of August,2019.
UXI�
Diane R. Voss, City Clerk John A. Haila,Mayor
Introduced by: Nelson
Seconded by: Corrieri
Voting aye: Beatty-Hansen,Betcher, Corrieri, Gartin,Martin,Nelson
Voting nay: None Absent: None
Resolution declared adopted and signed by the Mayor this 27t'day of August,2019.