« Community Development 589-3095
Cc ity of N ash lia Planning and Zoning 589-3090
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City Hall, 229 Main Street, PO Box 2019 Ce aerate amission B-a108
Nashua, New Hampshire 03061-2019 Transportation 880-0100
www.nashuanh.gov FAX 589-3119
Date: December 4, 2019
To: Jim Donchess, Mayor
From: Sarah Marchant, Community Development Director
Re: Finance Committee — Extension of Contract for Operation and Maintenance of Hydroelectric
Projects
The City of Nashua has owned Jackson Mills hydroelectric facility since December 2014 and Mine
Falls hydroelectric facility since the spring of 2017. In anticipation of purchasing Mine Falls, the
city went out to bid with RFP0266-033016 to find a contractor for the operation and maintenance of
both hydrofacilities. At that time there were 6 proposals received and the City ultimately entered
into contract with Essex Power Services Inc. based on an evaluation of technical qualifications,
experience and past performance, and cost.
The contract was crafted as a three year contract with an option for the City to extend for an
additional three. The City has had a positive experience with the Operations and Maintenance
services provided by Essex over the past three years and recommends rolling into the extension. We
are in the middle of relicensing Mine Falls Dam with the federal regulators and procuring a new
turbine at Jackson Mills. Essex has been a key team member in both of these large ongoing projects
and switching operators would be cost prohibitive.
The contract fee (as currently stipulated) includes 3 components: staff time, third party expenses
and an administrative fee. Staff time will be invoiced at a rate of $25 to $156 per hour depending on
position, with the majority of the work performed by assistant operators ($25/h) and operators
($52/h). Third party invoices will be billed at cost to cover parts, materials, and services not
provided by Essex. The administrative fee is 10% of gross revenue for the project for the first
20,000,000 kWh generated and 20% of gross revenues associated with generation above that.
With this cost structure, it is estimated that the City would incur $404,500 for staff time and
administrative fees and an additional $77,000 in third party costs, for a total of $404,605 in
operating costs for both facilities under this contract in FY20. Total anticipated revenues are
$1,212,000 for both facilities with a net profit of $807,395 for FY20.
The Waterways Department recommends Essex Power Services Inc. contract be extended as the
vendor to provide operation and maintenance service for the Jackson Mills and Mine Falls
hydroelectric facilities.
