CITY OF TALLAHASSEE
CITY COMMISSION AGENDA ITEM
ACTION REQUESTED ON: February 11, 2009
SUBJECT/TITLE: Approval of Continuing Software Maintenance Agreement Expenditure with Ventyx Energy LLC
TARGET ISSUE:
STATEMENT OF ISSUE
The Energy Services Department’s Wholesale Energy Services (WES) uses computer-modeling software, “CougerPlus”, for simulating the dispatch and cost of the City’s generating units for use in purchase and sale decisions. WES purchased the software license in July 1997 and the annual maintenance agreement charge has been in effect since that time. Under the Software License Agreement, the City must maintain and pay an annual maintenance agreement charge. This agenda item is for approval of the maintenance agreement expenditures for a three-year period, paid annually by September 30th of each year, pending approval of funds in each budget year.
RECOMMENDED ACTION
Option 1: Authorize the three-year maintenance agreement expenditure with Ventyx Energy, LLC, pending approval of funds in each budget year and authorize the Director of Energy Services to execute the agreement.
FISCAL IMPACT
$35,813 – Funding is available in the FY09 operation budget.
David Byrne, Director, Energy Services
Anita Favors Thompson, City ManagerFor Information, please contact: Ben A. Cowart, Power Marketing Manager, ext. 6893
SUPPLEMENTAL MATERIAL/ISSUE ANALYSIS
HISTORY/FACTS & ISSUES
1. The Energy Services Department’s Wholesale Energy Services (WES) uses computer-modeling software, “CougerPlus” for simulating the dispatch and cost of the City’s generating units for use in energy purchase and sale decisions. WES purchased the software license in July 1997 and uses the software daily. Under the Software License Agreement, the City must maintain and pay the annual license maintenance agreement. The license maintenance agreement entitles WES to unlimited service/technical support, free upgrades and free training attendance. The maintenance agreement is subject to escalation.
2. Westinghouse was the original vendor for the CougerPlus program and was the company from which the City purchased the program. Westinghouse later sold CougerPlus to ABB, who in 2004 sold the product to Global Energy Decisions. In late 2008, Global Energy Decisions and Henwood merged to form Ventyx Energy LLC. The original Westinghouse Software License Agreement AST PER-213 dated July 29, 1997 transferred with each sale and remains in effect with Ventyx Energy LLC.
3. Due to the merger of Global Energy Decisions, Ventyx Energy LLC missed sending out the renewal notices for the 2008-2009-contract year in September 2008. Staff contacted Ventyx Energy LLC about the status of the renewal and negotiated the three-year renewal with the first year being 5% lower than the 2007-2008 renewal of $37,698.00.
4. This agenda item is for approval of the maintenance agreement expenditure for a three-year service period, paid annually in the month of September. The three-year period will cover October 2008 through September 2011. The first period will be October 2008 – September 2009 and escalates annually at years 2 and 3 by the preceding year’s general rate of inflation developed from the Consumer Price Index (All items and Urban Wage Earners) as published by the US Bureau of Labor Statistics.
5. Payment is due in September prior to the start of the new contract year. WES will request a purchase order for each service year and funding will be provided from the operating budget. The estimated cost per year is:
2008 – 2009 $35,813.00
2009 – 2010 $35,813.00 + CPI
2010 – 2011 Year 2 + CPI
6. The approval of this action does not obligate the City to continue the maintenance agreement beyond the three-year period, as WES will continue to look for alternative software products and cost savings measures for the license and maintenance agreements. This action will expedite the purchase order process, when a purchase order is requested for each renewal period.
7. Procurement and Budget and Policy have reviewed this agenda item and concur that it meets purchasing budget guidelines.
OPTIONS
1. Authorize the three-year approval of the annual maintenance agreement expenditure, pending approval of funds in each budget year.
2. Do not authorize the three-year approval, but instruct WES to seek approval for each renewal period, pending approval of funds in each budget year.
ATTACHMENTS/REFERENCES