SPECIAL COUNCIL MEETING

The Special Council Meeting of April 24, 2006 was reconvened on May 3, 2006 at 6:00 p.m. with Council President Williams presiding. Council members present were Mr. Carey, Mrs. Russell, Mr. Sadusky, Mr. Ritter (departed at 7:45 p.m.), Mr. Hogan, Mr. Salters, and Mr. Ruane. Mr. Slavin was absent. Mayor Speed was also present.

Council staff members present were Mr. DePrima, Mrs. Mitchell, and Mrs. McDowell.

Mr. Carey moved to reconvene the Special Council Meeting of April 24, 2006, seconded by Mr. Salters and carried with Mr. Ritter voting no.

AGENDA ADDITIONS/DELETIONS

Mr. Salters moved for approval of the agenda, seconded by Mr. Carey and carried with Mr. Ritter voting no.

Mr. Carey moved to adjourn into Executive Session for an Update Report on RFP’s for Management of the Power Plan and Wholesale Power Costs, seconded by Mr. Salters and carried with Mr. Ritter voting no.

Meeting Recessed at 6:02 P.M. and Reconvened at 7:10 P.M.

UPDATE REPORT ON RFP’S FOR MANAGEMENT OF THE POWER PLANT AND WHOLESALE POWER COSTS

In September 2005, Duke Energy, the City’s power plant operator since 1996, announced their plans to dispose of or sell all of Duke Energy North America’s (DENA) physical and commercial assets outside the midwestern United States, including operation of the City’s power plant.

Mr. Kirk Betts, Betts & Holt, LLP of Washington, DC, the City’s energy attorney, advised members that they reviewed 10 (ten) RFP’s and, after significant discussions with those companies and evaluation of their contracts and management fees, it was determined that PACE Global Energy Services was the preferred company for asset/energy management and North American Energy Services (NAES) was the preferred company for operation and maintenance of the power plant. He noted that they met with PACE and NAES and negotiated a contract with them, which was reviewed by Council earlier in the executive session.

Responding to Mr. Ritter, Mr. Betts stated that a power price had not yet been determined. He noted that during the next year, an energy price portfolio would be developed to determine a fixed price. For the near term, they would like to determine a price in the next one and one half months. Mr. DePrima advised members that they are working to achieve the lowest wholesale price possible.

Mr. Carey moved to authorize the Mayor to execute an Energy Management Agreement (Exhibit #1) with Pace Global Asset Management, LLC., for the purpose of providing professional and technical advice and services to guide Dover’s acquisition of energy, capacity, related utility services, and acquisition and delivery of fuels, to serve as Dover’s agent to PJM, and to manage the integration of Dover’s McKee Run and VanSant Generating Stations with Dover’s power supply portfolio and with PJM, for a four year initial term, commencing at an annual fee of $2,175,000, exclusive of incentives for achieving contractually structured performance standards. The motion was seconded by Mr. Sadusky and carried by a roll call vote of seven (7) yes, one (1) no (Mr. Ritter), and one (1) absent (Mr. Slavin).

Mr. Carey moved to authorize the Mayor to execute an Operations and Maintenance Agreement (Exhibit #2) between the City of Dover, Delaware and North American Energy Services Company for the daily operation and maintenance of Dover’s McKee Run and VanSant Generation Stations, for a four year initial term, commencing at an annual fee of $175,000, exclusive of incentives for contractually structured performance standards. The motion was seconded by Mr. Sadusky and carried by a roll call vote of seven (7) yes, one (1) no (Mr. Ritter), and one (1) absent (Mr. Slavin).

Mr. Carey moved to authorize the Mayor and City Manager, individually, to enter into master agreements (Exhibit #3) between suppliers of electricity and the City of Dover to establish contractual relationships for transactions to implement the electricity and fuels purchasing strategy, plan and transactions contemplated under the Energy Management Agreement with Pace Global Asset Management, LLC. The motion was seconded by Mr. Sadusky and carried by a roll call vote of seven (7) yes, one (1) no (Mr. Ritter), and one (1) absent (Mr. Slavin).

COMPANY ORIENTATION

Mr. James G. Utt, PACE Executive Director, and Maurizio Biondo, NAES Senior Business Development Manager of east coast operations, provided a PowerPoint presentation which gave an overview of their companies and their proposals for the City of Dover (Exhibit #4). Mr. Utt advised members that he proposed to serve as the executive director in order to establish a single point of accountability to a management committee, which will be established with the City’s senior staff. He noted that he would manage the asset management functions, including providing a strategic plan for the assets, as well as long term power purchase opportunities. Mr. Utt stated that they would also help the City to manage its emissions allowance bank, renewable energy credits, risk management, and oversight services for the operation and maintenance contract with NAES. Mr. Biondo advised members that both PACE and NAES have a history of working together and NAES has been involved in 56 plant transitions. He stated that they expect the City of Dover transition to be accomplished without interruption. Mr. Biondo noted that the current staff has the best knowledge of the facility and it is standard practice to continue operations with the existing staff, who would become NAES employees.

Council President Williams thanked the negotiating team, Mr. Betts, Mr. Sax, Mr. DePrima, Mrs. Mitchell, and Mr. Wilson for their efforts. She also thanked Mr. Blaha and Duke Energy for their excellent management of the plant over the past ten years and their community involvement during that time.

Mr. Carey moved for adjournment, seconded by Mr. Hogan and unanimously carried.

Meeting Adjourned at 8:14 P.M.

                                                                                    TRACI A. McDOWELL

                                                                                    CITY CLERK

All orders, ordinances, and resolutions adopted by City Council during their Special Meeting of May 3, 2006, are hereby approved.

                                                                                    STEPHEN R. SPEED

                                                                                    MAYOR

/TM

S:ClerksOfficeAgendas&MinutesCouncil-Minutes20065-03-2006 Special.wpd

Exhibits Attached to Original Minutes and File Copy

Exhibit #1 - Energy Management Agreement - Pace Global Asset Management, LLC

Exhibit #2 - Operations and Maintenance Agreement - North American Energy services Company

Exhibit #3 - Master Agreements

Exhibit #4 - PowerPoint Presentation by PACE and NAES