07-16-10 BPU RPT 12 - Laserfiche WebLink

Home

W A T E R I E N E R 5 Y , L I F E RIVERSIDE PUBLIC UTILITIES Board Memorandum P U B L I C U T I L I T I E S BOARD OF PUBLIC UTILITIES DATE: July 16, 2010 ITEM NO: 12 SUBJECT: EXTENSION OF CONSULTING SERVICES AGREEMENT WITH POWER SETTLEMENTS CONSULTING AND SOFTWARE, LLC ISSUE: Consideration of a one-year extension to Consulting Services Agreement ("Agreement") for validation and financial settlement of California Independent System Operator ("CAISO") power market transactions. RECOMMENDATIONS: That the Board of Public Utilities: 1. Approve a one-year extension to the Agreement between City of Riverside and Power Settlements Consulting and Software, LLC ("Power Settlements") for Fiscal Year 2010-2011, in an amount not to exceed $114,800; 2. Approve future annual extensions of the Agreement; provided, that such extensions do not materially modify the terms and conditions of the Agreement beyond price escalations not greater than 5 percent of the prior year's cost; and 3. Authorize the City Manager, or his designee, to execute Agreement extensions. BACKGROUND: The CAISO implemented its newly redesigned power markets on April 1, 2009. These markets are extremely data-intensive and include dozens of types of charges that must be validated (typically more than 50 charge types in any given day) during a very short window to time. To avoid incorrect charges becoming permanent after the validation window closes, and to accommodate the CAISO's limited time to process invoices and payments, Power Resources uses specialized software applications to assist in the data verification, validation and analysis processes. Power Resources staff has been using Power Settlements' SettleCore software since January 2009, initially in a market simulation environment and subsequently in a production environment. SettleCore has been reliable, flexible and transparent in validating the CAISO's charges and credits. From April 2009 through the month of May 2010, Power Resources has been able to recover approximately $300,000 in disputed CAISO charges using the SettleCore software, a highly cost effective solution in validating the CAISO charges. The Agreement has the added value of allowing Riverside to use the software in providing scheduling and settlement services to other entities (currently Banning and Corona) at no additional cost. Without the settlement validation capability provided by the SettleCore application, it is almost impossible to cost-effectively provide such CAISO settlement services to other entities. Because Riverside provides similar services to Banning and Corona, a portion of these costs will be reimbursed through Utility Services Agreements with these cities.