City Commissioners voted unanimously to approved a two year electricity supply contract from Guzman during a special April 16 meeting.

Staff has since said the contract change will save the city about $500,000 in energy costs for the upcoming budget year.

The city withheld the rates offered by the four bidders for two weeks due to competitive trade secrets.

The rates as offered, were:

The city’s current energy contract was up for renewal in October and staff have been working with Jim Morin, the city’s energy consultant, over the last few months to explore options in an effort to reduce electricity costs.

City awards new energy contract

The city’s current electric contract with Energy Keepers Incorporated for $89.95 per megawatt hour.

City Manager Greg Doyon said during the April meeting that Morin advised that the city should issue a request for proposals before the current contract expires.

City beginning budget process

The city issued a RFP on March 28 for fix price proposals for

• one year: Nov. 1 through Oct. 31, 2025
• two year: Nov. 1 through Oct. 31, 2026.

Proposals were due April 16 and the city received four from Energy Keepers Inc., Guzman, Talen and Tenaska.

City approves energy consulting contract update

Since the end of the failed Electric City Power venture years ago, the city has purchased electricity through a competitive bid process.

City considering energy consulting firm to help monitor, manage costs

If the city leaves that process, they’d default to NorthWestern Energy and never be able to return to the open market, according to Morin and city officials.

Morin told commissioner during their April 16 meeting that one of the values of being able to choose their provider through the competitive bid prices was the ability to take advantage of favorable market conditions, which haven’t existed for some time.

“Timing may have been good for the city,” Morin said.

City approves new energy contract as costs rise [2023]

Commissioners went into executive session to discuss the rate proposals due to trade secrets for the energy companies.

“As with the prior electric supply contract, the city will publicly release the winning proposal prices and a summary of all Final Proposal prices received in response to the RFP two weeks after the contract is awarded. Some measure of confidentiality is necessary in order to secure the best pricing options for the city,” according to Doyon’s staff report.

The city followed the same purchase when they first contracted with Energy Keepers in 2017.

Doyon said during the meeting that a silver lining of the ECP venture was that the city was able to purchase electricity on the open market, which had provided a significant savings until about two years ago when the city had to make adjustments “to hedge off a new extraordinarily high rate after all those years.”

City considering amended energy contract [2023]

In February 2023, commissioners amended their contract with Energy Keepers for set megawatt hour prices as the consultant predicted even higher costs were on the horizon.

Melissa Kinzler, fiscal director, said in 2023 that the rate change would have a “very significant” impact to the city budget with a 200 percent increase in energy supply costs, or about $2.1 million, with the largest impacts to the water, sewer and street light funds, according to the city.

The change would be an increase of about $900,000 to the water fund; about $540,000 to the sewer fund; and $230,000 to the street lights fund, according to city figures.

City awards electric contract to Energy Keepers [2017]

Those increased electricity costs were major drivers of the city budget for this fiscal year.

Morin said that when he looks at providers, he looks at price, but also history, knowledge and security of supply.

He said that all of the respondents were capable of supply security and that the contracts include provisions for any instance in which a provider can’t provide the necessary supply. If that were to happen, the city would get electricity from the imbalance market, in which NorthWestern, participates in, and if there were any deviation to contract price that caused the city to pay more, the respondent makes the city whole and covers that additional cost.