Approve findings to authorize an exemption to the competitive bidding requirements with Penn Power Group, LLC to rehabilitate the Cogeneration System at the Columbia Boulevard Wastewater Treatment Plant not to exceed $1,942,008
The City of Portland ordains:
Section 1. The Council finds:
- The Bureau of Environmental Services (BES) manages wastewater and stormwater infrastructure to protect public health and the environment.
- The Cogeneration System at the Columbia Boulevard Wastewater Treatment Plant (CBWTP) utilizes biogas generated onsite to produce electricity and heat.
- The CBWTP Cogeneration System was installed in 2008 and requires rehabilitation, under the Cogeneration System Project, to continue to produce electricity and heat reliably.
- BES performed an alternatives analysis that considered replacement of the Cogeneration System and determined that refurbishment of the existing system allows for efficient utilization of existing goods and provides the City with the lowest cost alternative.
- Based on the Findings, attached as Exhibit A, a competitive bidding process cannot be used for the Cogeneration System Project because refurbished equipment is only available through the manufacturer and their authorized local representative Penn Power Group, LLC, dba Western Energy Systems.
- Portland City Code Section 5.33.120 authorizes the Council to award contracts without competition if the Council finds that the efficient utilization of existing goods requires the acquisition of compatible goods or finds that the goods are available from one source. A public notice of Sole Source Procurement was posted on April 14, 2023, Bid No. 00002115 and received no challenges.
- Rehabilitating the Cogeneration System using a contract awarded without competition will lead to efficient utilization of existing goods and these rehabilitation services are only available from Penn Power Group, LLC, dba Western Energy Systems.
- The estimated cost is $1,942,008. Funds are available in the Sewer System Operating Fund, FY 2022-23 Budget under WBS Element E11322 within the Bureau of Environmental Services FY 2023-2027 Capital Improvements Plan (CIP).
NOW, THEREFORE, the Council directs:
- The Findings attached as Exhibit A are hereby adopted and, on that basis, the Cogeneration System Project is exempt from the competitive bidding requirements of ORS Chapter 279C.
- The Chief Procurement Officer to award a contract with Penn Power Group, LLC, dba Western Energy Systems, in an amount not to exceed $1,942,008.
- The Chief Procurement Office is authorized to amend the contract with Penn Power Group, LLC, dba Western Energy Systems, provided the amendment has been approved as to form by the City Attorney’s office and it will not include the cost to the City.
- The Mayor and City Auditor are hereby authorized to pay for the contract from the Sewer System Operating Fund Budget when demand is presented and approved by the proper authority.
Official Record (Efiles)
An ordinance when passed by the Council shall be signed by the Auditor. It shall be carefully filed and preserved
in the custody of the Auditor (City Charter Chapter 2 Article 1 Section 2-122)
Passed by Council
Auditor of the City of Portland
Simone Rede
Impact Statement
Purpose of Proposed Legislation and Background Information
The purpose of the legislation is to authorize Chief Procurement Officer to award the goods contract without competition to Penn Power Group, LLC, dba Western Energy Systems (WES) to rehabilitate the existing Cogeneration System.
The Columbia Boulevard Wastewater Treatment Plant (CBWTP) currently sends biogas generated by anaerobic digestion to a Cogeneration System consisting of two (2) 850 kW internal combustion engines. The CBWTP Cogeneration System was installed in 2008 and requires rehabilitation to continue to reliably produce electricity and heat. The electricity produced by the Cogeneration System is used to offset the electricity demand at CBWTP and the heat produced is used to heat the anaerobic digesters and provide comfort heating in the CBWTP tunnels.
The Cogeneration System is overdue for an extensive rehabilitation project per the manufacturer’s recommendation and observed declining system performance. A project Alternatives Evaluation was performed to consider improvements to extend the service life of the Cogeneration System for an additional 10 years. The Alternatives Evaluation considered three different manufacturers and their proposal data was evaluated in a Preliminary Screening Analysis and a Business Case Evaluation. Alternative 1, the Cogeneration System Rehabilitation by the manufacturer, was determined to be the preferred project. BES staff have recommended the project move forward with the Cogeneration System Rehabilitation alternative as it has the highest 10-year Net Present Value (lowest cost).
A competitive bidding process cannot be used for the Cogeneration System Project because refurbished equipment is only available through the manufacturer and their authorized local representative Penn Power Group, LLC, dba Western Energy Systems.
Financial and Budgetary Impacts
This project is part of BES’ Capital Improvements Projects (CIP) and includes the Sole Source Contract with WES.
This legislation will neither generate nor reduce current or future revenue. No current positions will be affected, and no positions will be created, eliminated, or reclassified as a result of this legislation.
Community Impacts and Community Involvement
Not applicable – All work performed will be completed at the BES CBWTP.
100% Renewable Goal
The Columbia Blvd Wastewater Treatment Plant (CBWTP) currently sends biogas containing methane generated by anaerobic digestion to a Cogeneration System consisting of two (2) 850 kW internal combustion engines. Biogas utilization within the Cogeneration System to produce electricity and heat helps BES move towards their goal of 100% Waste Methane Recovery.
Financial and Budget Analysis
Analysis provided by City Budget Office
The bureau has the resources for the project budgeted in their CIP, which includes the Sole Source contract with WES. This is a secondary project under the Rehabilitations, Replacement and Modifications program and is scheduled to be completed in March 2025.