Title
Resolution to Re-Authorize the City Administrator to Direct Purchase Natural Gas and Choice Electric for all Relevant City Facilities
Memorandum
This resolution requests that the City Administrator be given the authority to enter into contracts for the direct purchase and delivery of natural gas and choice electric for relevant City of Ann Arbor facilities. The ability to move fast to purchase natural gas and electricity for the deregulated portion of the market, is necessary to obtain the best possible prices in the market. The City purchased approximately 890,000 CCF of natural gas in 2019, with a cost of approximately $528,000. In 2019, the City purchased approximately $111,000 of electricity on the deregulated market. Because these figures are so high, even a modest increase in commodity pricing can have a significant impact on the City's operating budget.
Granting purchasing authority to the Administrator for natural gas and choice electric is not unprecedented. In September of 1988, the City Council authorized the City Administrator to directly purchase natural gas for major natural gas using facilities (i.e., water and wastewater treatment plants). This resolution recognized that to successfully operate a program for the direct purchase of natural gas, the City needed the ability to act swiftly to take advantage of attractive prices on the natural gas market. A second resolution passed on January 19, 1999 expanded the natural gas purchase powers of the Administrator to cover all City facilities in response to the deregulation of the natural gas markets in Michigan. In March of 2002 City Council passed a resolution authorizing the City Administrator to enter into contracts for the purchase of electricity for any of all City facilities.
This resolution seeks to re-affirm the ability of the City Administrator to enter into natural gas and choice electric contracts in a timely manner, after legal review, without bringing each contract to Council. Wi...
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