HomeMy WebLinkAbout~Master - Contract Renewal for Electric Services Diesel Fuel Supply RESOLUTION NO. 23-259
RESOLUTION APPROVING CONTRACT RENEWAL FOR
ELECTRIC SERVICES DIESEL FUEL SUPPLY
FOR THE CITY OF AMES
WHEREAS, this contract is for the purchase of#2 ultra-low sulfur diesel fuel for Electric
Services. The utility has a 250,000-gallon main fuel tank located at the Dayton Substation to fuel
the two GT (gas turbine) units, which are primarily used at times of peak electricity demand and
during emergencies. The utility's two gas turbines could burn 250,000 gallons of fuel in a 60-hour
time period,requiring larger refill volumes and quick refills should an emergency dictate that they
stay on-line; and,
WHEREAS, the scope of work for this contract includes supplying fuel to the gas turbine
units as needed. Suppliers were asked to provide pricing in the form of a markup or markdown to
the daily-published"rack"average fuel price at the Des Moines,Iowa,terminal for stated products;
and,
WHEREAS, on August 27, 2019, City Council awarded the contract to Diamond Oil
Company, Des Moines, Iowa to provide these services. The contract includes a provision that
would allow the City to renew the contract for up to four additional one-year terms. The proposed
renewal contract would be the fourth of the four optional terms. The renewal period is from July
1, 2023, through June 30, 2024; and,
WHEREAS, the renewal terms do not have any price increases. The goal of the contract is
to create efficiency and flexibility in the purchase of a valuable commodity, ensuring that the City
is able to use opportunity purchasing and to lock in performance criteria for the suppliers. The
approved FY 2023/24 operating budget includes $300,000 for this fuel purchase; and,
WHEREAS, Power Plant staff plans to operate the combustion turbines more frequently
than in past years to accomplish additional training and reliability testing. This will result in higher
costs during this contract year. It should be noted that under the Diamond Oil contract, the Power
Plant can take delivery from two distinct points: Buckeye and Magellan.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ames, Iowa,
that the contract renewal with Diamond Oil Company, of Des Moines, Iowa, for the Electric
Services Diesel Fuel Supply in a total amount not to exceed$300,000, is hereby approved with the
options for pricing to be computed as:
a. (-$0.0062) deduct off of the Magellan"rack" fuel price, or,
b. $0.0163 increase off of the Buckeye "rack" fuel price.
ADOPTED THIS 91h day of May, 2023.
Renee kall, City Clerk John A. Haila, Mayor
Introduced by: Corrieri
Seconded by: Betcher
Voting aye: Beatty-Hansen, Betcher, Corrieri, Gartin, Junck, Rollins
Voting nay: None Absent: None
Resolution declared adopted and signed by the Mayor this 9th day of May, 2023.