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D. Conducting and Completing the Vero Beach Electric Utility System Study On February 9, 2015, the City executed the contract for the Electric Utility System Study (Optimization Study) with PowerServices, Inc., and work has begun. A copy of the PowerServices contract is attached to this update report as Appendix D. As indicated in the PowerServices contract, the scope of work includes several subjects or task areas, including Generating Site Options, Transmission and Distribution Planning, Resource Adequacy, Other Optimization Strategies, and developing revisions to the City's Pole Attachment Agreement, including a rate analysis. These task areas are projected to be concluded between April 10 (the Generation Site Options component) and November 9, 2015 (the Transmission and Distribution Planning component). E. Continuing Efforts to Reduce Rates City Staff and their consultant, William H. Herrington, P.E., have continued discussions with OUC toward refining the estimated costs and details of potential power supply arrangements for Vero Beach's long- term bulk power supply. Mr. Herrington works extensively in the Florida bulk power supply market. Alternatives studied include (1) a base case of performing the existing OUC Power Purchase Agreement ("PPA") as it exists; (2) canceling the existing OUC PPA and relying solely on the Florida bulk power market starting on January 1, 2016; (3) accepting the "discussion points" proposed by OUC to the City on November 25, 2014, and (4) accepting the "discussion points" proposed by OUC on October 20, 2014. The most recent meeting with OUC was on February 12, 2015, in Orlando. Following that meeting, Mr. Herrington prepared additional analyses, which are discussed in the memorandum packet that was presented to the Vero Beach City Council on Tuesday, February 17, 2015. A copy of that memo packet is attached to this update report as Appendix E. In summary, Mr. Herrington recommended that, considering all relevant risks and uncertainties, the City should proceed to negotiate a new agreement or agreements with OUC based on OUC's November 25, 2014 discussion points. At its meeting on February 17, 2015, the City Council directed Staff to present Mr. Herrington's recommendation to the City's Utility Commission and Finance Commission, both of which are scheduled to meet on March 12, after which the matter is expected to be addressed at the City Council meeting on March 17, 2015. 3 212