Cost_Formula-reward_average_cost_for_RFP.docx

This document is an instructional guide explaining cost formulas used in competitive scoring methodologies for the City of New Haven's Electricity Purchase RFQ/RFP in Connecticut. The City seeks competitive proposals for electricity supply to municipal accounts, including schools, public safety operations, and major municipal buildings, with an estimated annual usage of 46,000 megawatt-hours. The procurement involves a multi-year retail electric supply contract with a block and index structure and firm service. The contract term is 60 months beginning July 1, 2026, from the meter read date. Respondents must first achieve prequalification and acceptance of the City's Standard Terms before submitting price proposals in Phase 2 of the procurement process.

The document illustrates how the "Reward Low Cost" scoring method calculates point values by dividing the lowest overall cost by each proposal's cost to determine the percentage of available points awarded. In the example provided, a maximum of 30 points is allocated for cost evaluation, with the lowest-cost proposal receiving full points and higher-cost proposals receiving proportionally fewer points based on this formula. This pricing evaluation approach encourages competitive pricing while the City aims to secure cost savings, reduce rate volatility, comply with Connecticut clean energy goals, and gain access to modern energy data and reporting capabilities through the selected supplier(s).