Traverse City Record-Eagle

Region

July 31, 2012

Three firms considered for utility's audit

TRAVERSE CITY — Officials will choose among three consulting firms to conduct a Traverse City Light & Power audit.

A task force made up of representatives from the city commission, utility and local business and community leaders will interview three firms next week who expressed interest in the management and operations audit. The task force's recommendation will go to the Light & Power board in late August or early September for approval, then it goes to the city commission for consideration.

Four firms submitted proposals to the Traverse Bay Economic Development Corp., which is tasked with overseeing the process. The three finalists are Hometown Connections, of Colorado; Concentric Energy Advisors, of Massachusetts; and UMS, of New Jersey.

"They are all consulting firms that work in the energy space and that specialize in this type of work: management and operations audits," said Doug Luciani, president and CEO of the Traverse City Area Chamber of Commerce.

The EDC is a chamber subsidiary.

Mayor Michael Estes suggested this year the city utility undergo an efficiency review. The city commission supported the idea, and the audit will look for ways to improve Light & Power operations and consider ways to improve efficiency, including staffing.

"One of the things we are looking for is what's not typical. We really want them to think outside the box," Luciani said.

That includes comparing Light & Power to "industry benchmarks" but also practices that aren't necessarily specific to utilities, he said.

Light & Power budgeted $100,000 to pay for the audit. The interested firms provided a range of $75,000 to $92,000 for the work.

Executive Director Ed Rice said he hasn't worked before with any of the candidates and said next week will shed light on the firms.

"The interviews will be the critical portion," he said.

Rice isn't a member of the task force but has been available for technical advice. The interviews will take place by video conference.

Luciani said interview questions will ask about when firms can start the work and how long the audit will take to complete.

"We're really looking for sooner rather than later," he said.

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