Submitted By: Brittany Craven
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Presentation By: Chad Lynch
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Department: Electric Utility
FORMAL TITLE:
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Additional expenditure for the purchase of two auto transformers from PTI Transformers, Inc., in the amount of $1,100,000
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OCALA'S RELEVANT STRATEGIC GOALS:
Operational Excellence
PROOF OF PUBLICATION:
Bid released to the public on April 13, 2023.
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BACKGROUND:
On August 15, 2023, the City Council approved the purchase of two 105 Mega Volt-Amperes (MVA) autotransformers from PTI Transformers, Inc. for the Dearmin Substation at a total cost of $8,070,340. The agreement included a price adjustment provision tied to the producer price index (PPI) for power, distribution, and specialty transformer manufacturing, due to the extended three-year production timeline.
As previously reported to City Council through an informational update, the applicable PPI increased from 415.858 in May 2023 to 458.462 in early 2026. In accordance with the contract, this increase has resulted in an adjustment to the final manufacturing costs. All contract payment milestones have been completed as required, and delivery of the first transformer is scheduled for early November 2026.
FINDINGS AND CONCLUSIONS:
Pursuant to the contract's price adjustment provision, increases in the PPI have resulted in higher final costs for the autotransformers, including associated freight and field services. The calculated contract adjustment totals $1,015,723.10.
Ocala Electric Utility (OEU) requests approval for a total increase of $1,100,000, including the calculated adjustment and a $84,276.90 contingency to address any final costs that may arise before project completion and final payment. Approval of this amendment will increase the total contract amount from $8,070,340 to $9,170,340.
Replacement of these transformers remains essential to maintaining reliability at the Dearmin Substation, supporting system load demands, and ensuring continued safe and efficien...
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