Today’s long-awaited Board of Public Works meeting centered around the recommendation to award a contract for the Hyperion Treatment Plant Digester Gas Utilization Project (DGUF) in the amount of $227 million dollars.
City of Los Angeles Bureau of Sanitation staff recommended awarding the contract to Constellation New Energy Inc, a subsidiary of Exelon Corporotaton (CNE) for the implementation of the project. However, NORESCO, the other respondent to the cities RFP, filed two motions protesting the staffs recommendation.
Constellation scored 100 while NORESCO scored 78 (which includes a 2% margin of error). NORESCO contends they are known for designing/building the digesters, but the City of LA is more concerned with the cost than the overall design of the project. Will that be a costly mistake?
Bureau of Sanitation money maven Lisa Mowery explained the city wasn’t comfortable with NORESCO’s plan to use AQMD credits to offset the cost. AQMD credits are a commodity, whose value fluctuates, therefore, the city did not want to assume the value would remain constant to guarantee the returns NORESCO projected. Seeing that I am AQMD certified, this made perfect sense to me.
City Watch LA contributor Joseph Mailander, sent 2UrbanGirls a link to an article where he interviewed Kevin James, current board President, back in July, where he stated
I bring a different kind of experience in the end
That experience included Kevin James grilling NORESCO like they were on trial. It was apparent James read the proposals from cover to cover and when asking NORESCO to point out certain issues in the contract, the NORESCO representative speaking had a hard time answering the questions. James was ruthless. Matt Szabo provided the knock out punch by only concerning himself with the cost. Szabo wasn’t concerned about design, only dollars and cents.
In the end, Constellation was approved by the board and the action will be forwarded to the full city council for vote. Joseph Mailander also points out that the Public Utilities Commission (PUC) has yet to approve the project, however, City Hall insiders tells 2UrbanGirls it is a mere formality once the council approves the vendor.
It will be interesting to see what becomes of the next big contract negotiation, when the board has to discuss the soon to be expiring contract with Waste Management (WM).
Waste Management, in addition to picking up trash curbside, is also the owner of a landfill. With Los Angeles County Sanitation Districts recently closing the La Puente Landfill, and the city having to divert its trash to WM, it will be interesting to see how this plays out. Waste Management is threatening to not take any more of the City trash at their landfill, which could have a huge impact on residents, if their trash rates increase as a direct result. Stay tuned.