TITLE
Recommendation to authorize City Manager to execute an amendment to the Southeast Resource Recovery Facility (SERRF) Operations and Maintenance Agreement No. 23336 with Covanta Long Beach Renewable Energy Corporation (Covanta), to allow the City to purchase property, boiler and machinery insurance from Covanta annually, and to allow the City to reimburse Covanta for electricity expenses incurred at SERRF during turbine generator overhauls and inspections, not to exceed 5,000,000 kilowatts per year. (District 2)
DISCUSSION
On March 1, 1994, the City Council authorized a contract with Montenay Pacific Power Corporation, which later became Covanta Long Beach Renewable Energy Corporation (Covanta). The operator is experienced in the operation of waste-to-energy facilities and specifically the operation of SERRF. The operator has provided specialized professional, technical and scientific services to the City under the current agreement. The proposed amendment allows the City to purchase insurance directly from Covanta and to reimburse Covanta for electricity expenses incurred in order to continue SERRF operations during periods of extended maintenance.
The purchase of property, boiler and machinery insurance is required under the terms of the SERRF revenue bonds and lease. Covanta offers competitive pricing by including SERRF in its group insurance portfolio. Since Fiscal Year 2010 (FY 10), the City has purchased insurance through Covanta. Because the purchase of insurance is not specified in the current agreement, a change order is required on an annual basis to facilitate this transaction. The proposed amendment will allow the City to purchase property, boiler, and machinery insurance directly from Covanta without the need for a change order. In FY 16, the total cost of property, boiler and machinery insurance is estimated at $1,225,000.
Additionally, the proposed amendment will allow the City to reimburse Covanta for electricity expenses it incu...
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