ENE55 MOU for Electricity DRAFT.docx

Memorandum of Understanding Between the

(Eligible Entity name)

And the Operational Services Division Of the Commonwealth of Massachusetts

A. PURPOSE: The purpose of this Memorandum of Understanding is to establish an agreement between _________________________ (“Eligible Entity”) and the Operational Services Division (OSD) of the Commonwealth of Massachusetts for the Eligible Entity to participate and contract for Electricity through the Statewide Contract for Electricity (Contract).

B. AUTHORITY: The Operational Services Division’s authority to procure goods and services on behalf of the Commonwealth is pursuant to MGL c. 7, § 22, MGL c. 30, § 51 and § 52 and 801 CMR 21.00 and further to conduct collective purchasing on behalf of the Commonwealth and its political subdivisions is pursuant to MGL c. 7, § 22A.

C. BACKGROUND: OSD, in conjunction with a Strategic Sourcing Services Team (SSST) consisting of user representatives who have agreed to be on the team, will develop and issue a Request for Response (RFR) and plans to solicit competition for Electricity using a two-step process: (1) Vendor Technical Qualification (2) Pricing utilizing a web-based reverse auction platform. Although the intent is to obtain pricing via an on-line reverse auction, OSD may use alternative methods (e.g., sealed bid) to establish the contract, if it is in the best interest of the Commonwealth. The eligible entities Electricity requirements will be included with the requirements of the Executive and other agencies of the Commonwealth in order to maximize the Commonwealth’s buying power.

D. TERM: This agreement shall be effective as of the latest date of signatures (below) and shall remain in effect for the initial term of the contract executed on behalf of the Commonwealth by OSD as well as any extension periods exercised. In the event a contract extension is considered, OSD will communicate with the Eligible Entity regarding any change in price prior to extending the contract for the Eligible Entities accounts. If this agreement is cancelled by the Eligible Entity then such party assumes responsibility for the costs resulting from such cancellation, as determined by OSD. The costs shall be calculated based upon the canceling Eligible Entity’s estimated Electricity consumption (as reflected in the RFR) multiplied by the Contract price from the date of termination until the end date of the initial term of the Contract. The OSD shall provide the Eligible Entity with an itemized assessment of the costs. These costs may be subject to negotiation among the OSD, the Eligible Entity and the awarded Contractor; however it should be noted that OSD has no liability for costs.

E. MODIFICATION/AMENDMENTS: Modification or amendments to this MOU shall be in writing and duly executed by both parties to be effective.

F. DESCRIPTION OF ELIGIBLE ENTITY RESPONSIBILITIES: The Eligible Entity will be responsible for:

1) Paying its own Electricity bills in accordance with the terms of the contract or as determined by OSD in the event of an unresolved dispute between the Contractor and the Eligible Entity;

2) Providing OSD with information regarding all applicable facilities historical usage requirements, copies of the most recent 12 months utility invoices, facility address(es), account number(s), rate class and facility point(s) of contact;

3) Providing up to date accounts payable contact information for each account which will be enrolled in the contract;

4) Informing OSD of any unique aspects of a facility’s energy requirements (i.e. existence of special facility rates, interruptible rates, back up heating fuel sources, etc.); and

5) Said information of the Eligible Entity contained in paragraphs 2, 3 and 4 shall not be used or disseminated for any reason, except as provided for in the RFR, unless required by law, and then only after giving the Eligible Entity, that is the subject of the request for said information, the opportunity to take any legal action(s) to stop dissemination of such information.

6) Cooperatively attempting to resolve disputes with the Contractor.

G. DESCRIPTION OF OSD’s RESPONSIBILITIES: OSD will be responsible for:

1) Collecting agency and Eligible Entity utility consumption data, with agency cooperation and authorization;

2) Establishing a Strategic Sourcing Services Team (SSST) and Preparing and Issuing the Request for Response (RFR) for Electricity;

3) Evaluating proposals and awarding the contract(s) that provide best value to the Commonwealth in accordance with the RFR’s evaluation and selection criteria;

4) Abiding by all aspects of 801 CMR. 21.00 and the statutory authority referenced above while conducting this procurement;

5) Managing and Administering the Contract;

6) Settling unresolved disputes between the Eligible Entity (ies) and the Contractor as to services provided under the subject contract.

H. PRICING/SOURCE SELECTION STRATEGY AND TERM: In general, OSD’s goal is to obtain the lowest price energy services from the highest quality contractor. Because electricity contracts can come with many options, it is important that the Eligible Entity is aware of the term and pricing products that OSD is requesting pricing for in the RFR. OSD intends to request pricing for the following products:

· Pricing Option I: Firm Fixed Price – A firm fixed price for all electricity delivered including transmission, forward capacity, and commodity costs. Minimum Consumption Bandwidth is Unlimited (100%) for all electricity consumed. Due to the regulatory uncertainty associated with the Clean Peak Standard (H.4387) and Fuel Security Costs, they will be passed through.

· Pricing Option II: Firm Fixed Price with Forward Capacity Costs Passed Through – A firm fixed price for all electricity delivered including transmission and commodity costs. All charges related to an accounts capacity obligation will be passed through, including, but not limited to changes in ICAP tags, reserve margins, auction settlements/prices. Minimum Consumption Bandwidth is Unlimited (100%) for all electricity consumed. Due to the regulatory uncertainty associated with the Clean Peak Standard (H.4387) and Fuel Security Costs, they will be passed through as well.

This list of pricing products and specifications may change prior to the auction and additional pricing products may be included in the final RFR.

OSD is requesting pricing for 36 months. If OSD awards either a 24 or 36 month contract it may request an extension for up to 24 months. The length of the initial contract term will be determined by OSD and the SSST based on best value to the Commonwealth. This contract terms may change prior to the auction.

OSD retains the right to negotiate terms and request alternative pricing products (indexed, block and index, and other) with the awarded vendors for extension periods. OSD also retains the right to request renewable (green) energy at a specified percentage or volume above the Massachusetts Renewable Portfolio Standard (RPS). If OSD decides alternative pricing products or including renewable energy to be in the best interest of the Commonwealth for any extension periods awarded it will communicate this information to Non-Executive agencies in advance of entering into any agreements with vendors. Non-Executive agencies will be provided the option of remaining on fixed price contracts and not purchasing renewable energy.

I. ATTESTATION: The Eligible Entity agrees that by entering into this Memorandum of Understanding it will accept the pricing and terms and conditions established in the final contract by OSD upon the recommendation of the SSST and is financially responsible for paying its own bills in accordance with contract requirements, the Commonwealth’s billing paying policy and all applicable statutes, regulations and policies. By signing this agreement, the Eligible Entity agrees to purchase Electricity under the OSD contract for its account(s) included in the RFR.

Based on the bid prices OSD receives and its projections of future commodity rates that will be charged to customers who purchase electricity commodity directly from their local electricity utility, OSD may decide that it is in the Commonwealth’s best interest not to award a third-party supply contract.

APPROVED ON BEHALF OF:

Please indicate which pricing product or products you are interested in receiving pricing on:

Pricing Option I: Firm Fixed Pricing – A firm fixed price for all electricity delivered including transmission and commodity costs. Minimum Consumption Bandwidth is Unlimited (100%) for all electricity consumed.

Pricing Option II: Firm Fixed Price with Forward Capacity Costs Passed Through – A firm fixed price for all electricity delivered including transmission and commodity costs. All charges related to an accounts capacity obligation will be passed through, including, but not limited to changes in ICAP tags, reserve margins, auction settlements/prices. Minimum Consumption Bandwidth is Unlimited (100%) for all electricity consumed. Due to the regulatory uncertainty associated with the Clean Peak Standard (H.4387) and Fuel Security Costs, they will be passed through as well.

Undecided

If undecided is selected, you will be required to communicate a final selection to OSD and the SSST via email by a time and date that will be provided to you.

(Eligible Entity)

(Signature)

(Name & Title)

(Address)

(Phone Number)

(Date)