COMMISSION 
AGENDA MEMORANDUM                        Item No.          8c 
ACTION ITEM                            Date of Meeting    September 24, 2019 
DATE:     September 17, 2019 
TO:        Stephen P. Metruck, Executive Director 
FROM:    Keith Warner, Aviation Utility Business Manager 
Keithly Espiritu, Utility Analyst 
Mike Tasker, Senior Manager  Aviation Facility & Infrastructure 
Jeffrey Brown, Director of Aviation Facilities and Capital Program 
SUBJECT:  Natural Gas Supply for Airport and CNG Fleet 
Amount of this request:                   $5,000,000 
Total estimated contract cost:             $5,000,000 

ACTION REQUESTED 
Request Commission authorization for the Executive Director to approve the action to execute 
a contract for Natural Gas (NG) supply to the Seattle-Tacoma International Airport (Airport) for
facility heating and for Compressed Natural Gas (CNG) fleet fuel. 
EXECUTIVE SUMMARY 
The Port intends to have two separate agreements related to NG and Renewable Natural Gas
(RNG) delivery to the Airport. While the procurement for RNG is currently in the selection
process, staff have already determined that a NG delivery contract is also necessary because
the RNG supply will only meet about 65% of the Airport demand, including 100% of the CNG
station demand. To supplement the full required load and to take advantage of low prices, the
Port will need a new NG contract. The current NG supply contract, S-00317449, is due to expire
October 31, 2019 and a new contract must be issued to maintain continuous (uninterrupted) 
NG supply to the Airport and CNG fueling station. 
JUSTIFICATION 
It has been identified, that the anticipated RNG contract may not be executed until Q4 2019 - 
Q1 2020, and the contract will not be able to supplement the full load for heating the Airport,
thus the Port must procure additional NG supply from non-renewable sources to accommodate
the full required load. The Port has also exhausted all options of extension for the existing NG
contract and must engage in a competitive bidding process for a replacement contract. A
contract with a private supplier has been identified to be more cost effective than obtaining gas
from the local public utility, Puget Sound Energy (PSE). 

Template revised January 10, 2019.

COMMISSION AGENDA  Action Item No. _8c___                              Page 2 of 4 
Meeting Date: September 24, 2019 
Diversity in Contracting 
No goal has been established to prioritize engagement of this contract with women and
minority-owned business enterprise due to the limited number of gas suppliers to our location. 
DETAILS 
The Airport facility and CNG fueling station consumes an average of 3.4M therms of gas
annually. This contract will replace the existing contract, S-00317449, and grant a sole supplier
the exclusive right to provide NG to the Airport facility and CNG fleet. The initial term of the
contract will be two (2) years, with two (2) optional one (1) year extensions. 
The related RNG procurement is currently still undergoing the selection process. Initially, one of
the options detailed in the solicitation was for the supplier to provide RNG to accommodate for
the full required load of transportation fuel as well as facility heating. However, the Port can
meet its Century Agenda carbon goals and maintain cost-effectiveness with a two-thirds supply
of RNG. Once the NG supply contract is established, the Port will use an established contractual
mechanism to require the NG supplier to swap a specified volume of RNG for NG.
Scope of Work 
The supplier will be required to provide full requirements NG supplies to be delivered at the
City Gate delivery point. 
Schedule 
Activity 
Commission Consent Approval                 September 24, 2019 
Bids/Proposal Due                              October 8, 2019 
Notice of Intent to Award                        October 14, 2019 
Agreement Execution                         October 31, 2019 

ALTERNATIVES AND IMPLICATIONS CONSIDERED 
Alternative 1  Do not execute a new contract for exclusive supply of NG to the Airport. Obtain 
gas from the public utility, PSE, under a gas sales tariff.
Cost Implications: 
Pros: 
(1)   Execution of a contract is not required 
Cons: 
(1) Subject to PSE's published tariff rate which may change as required by PSE. 
(2)   Requires 30 days written notice to revert back to PSE as supplier. 
(3)   This strategy is not the most cost-effective option as the current rate schedule is
higher than competitive market pricing. 

Template revised June 27, 2019 (Diversity in Contracting).

COMMISSION AGENDA  Action Item No. _8c___                              Page 3 of 4 
Meeting Date: September 24, 2019 
(4)   Not aligned with RNG contract approach. 
This is not the recommended alternative. 
Alternative 2  Execute a new contract for an exclusive NG supplier. 
Cost Implications: 
Pros: 
(1)   Provides the Port with the ability to obtain gas at a more competitive firm fixed price
rate for the majority of the gas required. 
(2)   Consistent with RNG in support of the Century Agenda. 
Cons: 
(1)   30% of the gas procured is exposed to monthly market index pricing, which varies
monthly. 
(2)   Administrative effort will be required to renew the contract annually. 
This is the recommended alternative. 
FINANCIAL IMPLICATIONS 
Cost Estimate/Authorization Summary               Capital        Expense           Total 
COST ESTIMATE 
Original Estimate                                          $0      $5,000,000      $5,000,000 
AUTHORIZATION 
Previous Authorizations                                    0                0                0 
Current Request for Authorization                         0      $5,000,000      $5,000,000 
Total Authorizations, including this Request                 0      $5,000,000      $5,000,000 
Remaining Amount to be Authorized                   $0     $5,000,000     $5,000,000 
Annual Budget Status and Source of Funds 
Budget for 2020 has been approved for NG supply ($1.2M). This budget item is ongoing
baseline and a justified amount is approved every year. 

Future Revenues and Expenses (Total cost of ownership) 
Anticipated annual expense for NG supply from this contract is estimated at $1.2M annually.
The term of this contract will be two (2) years, with two (2) additional options to renew for one
(1) year. The total cost of this contract for two years will be approximately $2.4M, and up to
$4.8M including the option to renew for two (2) more years. These estimates do not include
sales tax. 

Template revised June 27, 2019 (Diversity in Contracting).

COMMISSION AGENDA  Action Item No. _8c___                              Page 4 of 4 
Meeting Date: September 24, 2019 
ATTACHMENTS TO THIS REQUEST 
(1)   Natural Gas Supply Presentation 

















Template revised June 27, 2019 (Diversity in Contracting).