Title
RESOLUTION AUTHORIZING AN AMENDMENT TO EXTEND CONTRACT C22091 WITH VENTURE FUELS FOR THE PURCHASE AND DELIVERY OF COAL TO DULUTH ENERGY SYSTEMS FOR AN ESTIMATED INCREASE OF $1,782.10.
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CITY PROPOSAL:
RESOLVED, that the proper city officials are hereby authorized to amend contract C22091 with Venture Fuels (a joint venture partnership between Midwest Energy Resources Company and Navajo Transitional Energy Company, LLC) for the purchase and delivery of approximately 5,208 obligated tons of western sub-bituminous coal to Duluth Energy Systems (DES) at the negotiated 2024 price of $53.72 per ton, subject to changes in diesel fuel prices and other price adjustments. The increase of approximately $1,782.10 is payable from 540-920-1490-5387 (steam fund; steam department; steam production; coal).
Statement of Purpose
STATEMENT OF PURPOSE: This resolution authorizes an eighth amendment to extend City contract C22091 with Venture Fuels to continue to purchase and use the remaining 5,208 obligated tons at the negotiated 2024 price of $53.72 per ton, subject to changes in diesel fuel prices and other adjustments. Venture Fuels supplies Spring Creek coal for DES.
The delivered cost per ton is subject to rail and trucking fuel price adjustments per the terms contained in the existing contract. The city is obligated to complete the purchase of the estimated 5,208 tons by December 31, 2024.
The actual amount of coal purchased has decreased due to the conversion of two of the DES boilers to natural gas as evidenced in the contract totals below as prices increase.
Annual contract totals are as follows:
2016 - $2,038,585.16 (actual)
2017 - $856,858.98 (actual)
2018 - $964,764.10 (actual)
2019 - $631,612.90 (actual)
2020 - $274,355.05 (actual)
2021 - $120,192.09 (actual)
2022 - $60,489.18 (actual)
2023 - $14,133.96 (year to date)