Title
A RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO AN AGREEMENT FOR RETAIL NATURAL GAS SUPPLY; AND DECLARING AN EMERGENCY.
Brief Description: The City’s current natural gas Agreement with Constellation New Energy expires on October 31, 2024. Following review and discussion of the forecast gas rates with the Buckeye Energy Brokers, it was advised that the City should enter into a 1-year Agreement with Eastern Power and Gas.
Body
Legislative History
14-97 - an ordinance authorizing the city manager to enter into an agreement related to the marketing of competitive retail natural gas supply; and declaring an emergency.
Purpose & Explanation
Since 2014 the City of Hudson has had on-going renewal agreements with Constellation New Energy to provide Hudson residents, businesses, and other consumers with an “opt-in” program for natural gas. In summary, this program is an opt-in gas aggregation program for the community.
Recently staff spoke with the City’s energy broker to review current rate offerings and forecast gas rates for future years. Considering the current market and natural gas futures which are trending up as we move into the fall of the year. The broker recommends a one-year term with a fixed rate with Eastern Power and Gas.
The current natural gas agreement with Constellation New Energy expires on October 31, 2024. The rate in the current agreement is $3.59/Mcf. Constellation New Energy is no longer offering community agreement programs. As such, Buckeye Energy Brokers has provided Hudson with an opt-in program for a one-year term at a rate of $3.75/Mcf effective with the November 2024 billing cycle.
The broker indicated that the industry is not seeing significant rate fluctuations regardless of if the program is opt-in or opt-out. NOPEC, one of the larger aggregate natural gas providers has an opt-out program rate of $3.99/Mcf at the time of this report.
Following review and discussion of the forecast gas rates, it was determined the City should enter into a 1-year term agreement with Eastern Power and Gas at the fixed rate of $3.75/Mcf
Fiscal Impact
Currently Budgeted (Account #, $)
Supplemental Appropriation Required (Account #, $)
X Appropriation Not Required
Does this legislation require use of an emergency clause?
X Yes, to execute the rate agreement ASAP
No
Recommendation
Suggested Action
Staff recommends Council approval of the resolution to enter into a one-year agreement with Eastern Power and Gas.
Submitted by,
Thomas J. Sheridan, City Manager
Frank J. Comeriato, Jr., Asst. City Manager-Operations