HomeMy WebLinkAbout15.c Ridaught USP Technologies Odor Control Price Increase - cothvi
CLAY COUNTY UTILITY AUTHORITY
Aim } M MEMORANDUM
TO: Jeremy D. Johnson, Executive Director
FROM: Darryl Muse, Chief Operations Officer
THRU: Angelia Wilson, Procurement Manager
DATE: January 4, 2024
RE: Notification of Price Increase for Odor Control at Ridaught Landing Water
Reclamation Facility (WRF)
On June 7, 2022, CCUA's Board of Supervisors provided advanced approval to Piggyback the
City of Orlando Contract No. IFB21-0285 with USP Technologies (USP) Service Agreement for
Chemical-Based Odor Control at Ridaught Landing WRF.
The USP/CCUA Service Agreement is scheduled to expire on February 24, 2024. However, the
terms of the Agreement allow for the renewal of an additional one(1)year term, contingent upon
mutual agreement of both parties. Staff engaged USP Technologies which is interested in
renewing the Agreement with the following rate increase:
Pricing:
• Peroxide will remain at current$4.65/gal,the pre-lift pricing for Orlando peroxide agreed
to with the Piggyback contract, until February 1, 2024.
• After February 1,2024,the pricing will reflect the pricing at Orlando, currently$5.27/gal.
• The Transportation and Energy Surcharge has dropped to 5%from the current 13%. This
temporary charge was put in place last year and reflects surcharges being passed to USP
by Suppliers.
• The Facility Fees will remain unchanged at $560 for peroxide monthly.
This pricing is aligned with the City of Orlando contract off which CCUA is Piggybacking. All
other provisions in the original proposal will continue to hold, outside of pricing which is
controlled by the Piggyback Agreement.
Attachments:
2023/2024 Odor Control Program Renewal Letter
USP Price and Surcharge 2023-2024
Amendment No. 3, City of Orlando Contract No. IFB2 1-0285
//DP(Author)
//AW, DP,AB (Review)
//DM(Final)
USP
technologies'
Solutions for a dean environment
Date: December 29th, 2023
To: Barry Cole
Over the last year there has been a significant stabilization of prices relative to 2022, allowing us to keep the
pricing without adjustments mid-year. Likewise, the transportation and energy surcharge which was necessary
over the past two years is seeing a significant decrease. However, there continue to be cost pressures which
impact USP's goal to continue to provide best-in-class products, services, and support for our programs at your
site. As a piggy-backed account with Orlando, and their acceptance of an adjustment in response to ongoing
pricing pressures,the Peroxide pricing will be adjusted for Clay County,effective 2/1/24. USP is committed to Clay
County and will continue to work to ensure success in program application and service, upgrading equipment and
monitoring as needed, and integrating new tools for continuous improvement. Pricing of Peroxide will increase
2/1/24, but the Transportation and Energy Surcharge will drop significantly to 5%from the current 13%. Facility
Fees will remain unchanged at $560 for peroxide monthly. Pricing summary is below, usage may be lower than
estimated in table.
Item January 2024 Pricing Estimated 2024 Usage Budget Amount
Hydrogen Peroxide $5.27/gal 22,800 gal/yr $120,156
The increase is necessary to offset increased material and operating costs incurred by USP Technologies. For your
reference I have included updated market details on key factors driving the price increase(see Appendix A). I know
these details can help you as you communicate these types of increases to your internal team(s).
USP Technologies will do all we can to help mitigate the impact these increases might have on your business.
Though these increases must go into effect per the dates mentioned above,we will work to optimize your program
to minimize the impact on YOY cost.
Thank you for your trust in our team and in USP. I look forward to our continued work together.
Sincerely, Agreed to and Accepted on , 2024
Jim Graham Company Name: Clay County
USP Technologies By:
SE Territory Manager
(901) 286-7177
jgraham@usptechnologies.com Title:
2
APPENDIX A
cusP
technologies
Raw Material/ 2023 &2024 General outlook Comment
Index
Water Treatment Prices have rebounded in 2022&are • There is not an appetite by upstream feedstock suppliers to decrease prices on commodity feedstocks
Compounds staying at high level • This coupled with general decrease in capacity/output is keeping prices high
Hydrogen 2023 costs stable in H2 w/lower nat gas • Electricity and labor costs driving'catch-up pricing at some peroxide vendors,mainly transactional customers
Peroxide 2024 costs 2-3%increase wf low nat gas • 2024 projections show nat gas will be a factor in Q2/Q3 possibly triggering surcharges of 0.5%-1.0
Natural Gas 2023 costs continued decline from 2022 • Natural gas costs count twice in peroxide manufacturing(energy and hydrogen),cost pressures are increasing
2024 projections at$3 surcharge trigger • USA continued exports to EU27 will artificially elevate US terminal pricing and increase surcharge risk
Chlorine Increased in 2023 • Suppliers are pushing for increases for 2024
Mixed price scenarios for 2024 • There was some softening in the market in 2023,but prices are historically high for chlorine
Hydrochloric acid Increased in 2023 • Suppliers pushed for another round of price increases in Q4/2024 on high demand (West Coast impact)
Mixed price scenarios for 2024 • 2024 is uncertain,with increases in some regions,decreases in others
Sulfuric Acid Decreases in 2023,for spot prices • Prices generally decreased in 2023 for spot business(not contracted)
Mixed price scenarios for 2024 • Certain production stoppage(West Coast)is pushing regional pricing up in 2024
Scrap Metal Enough variability in 2023 • Supply is linked to the economy,i.e.,auto industry
2024 flat with some regional variability • Some tightness is forecasted which could drive prices up
2023 Hydrogen Peroxide Market in the U.S.
1.The increasing demand for peroxide used in electronics equipment(chips, batteries, nickel battery
recycling)will outstrip current production levels in the US in late 2024.
2.As industries increasingly prioritize eco-friendly alternatives, hydrogen peroxide's versatility as a
green oxidizing agent positions it as a viable option across sectors beyond its traditional applications.
3.The increasing focus on clean and renewable energy sources creates opportunities for hydrogen
peroxide in the energy sector. Hydrogen peroxide can play a role in fuel cells,energy storage,and even
as a green propellant in aerospace applications,offering sustainable solutions for the future.
4.There are no plans or indications that any of the current peroxide producers are investing in
expanded capacity.
5. USP is well positioned with strong supply/contract relationships with all three(3)major North
American peroxide producers.
6. USP is working now to secure longer term, more favorable supply via contract updates with our
peroxide suppliers.
2016-2026 NAM HP industry utilization rate (%)
Demand Capacity imam< COVID Increased demand in sem.conductots to
increase demand impact pro9'Assively tighten the market
Uhtsafrrnrsd r+rA
99%
lst marlin98` 97%
9b 93% 95%
92i 92ti 91%
isienced run,
B6%
•
3
, sP .technologes
Economics Department-American Trucking Association—Arlington,Virginia
Truck Driver Shortage
180,000
160,000
140,000
120,000
100,000
80,000
bU,WU
40,000
20,000
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
4
Hydrogen Sulfide Control Services Amendment No.:Three
I FB21-0285
AMENDMENT NUMBER THREE TO
AGREEMENT DATED AUGUST 26,2021
BETWEEN CITY OF ORLANDO AND
US PEROXIDE,LLC. DBA USP TECHNOLOGIES
THIS AMENDMENT TO AGREEMENT is made and entered into this 201‘"day of
1 4,0610Qnr, 2023, by and between the City of Orlando, a municipal corporation organized and
existing under the laws of the State of Florida, hereinafter referred to as the "City" and "US
PEROXIDE, LLC. DBA USP TECHNOLOGIES", hereinafter referred to as the "Contractor".
WHEREAS, the City and the Contractor entered into an Agreement ("the Agreement")
under the date of August 26, 2021, whereby the latter would perform certain services with
respect to the corrosion and odor control with hydrogen peroxide and PRI-SC;and
WHEREAS, the City and the Contractor desire to amend the compensation provisions of
said Agreement to increase the price;
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, the parties agree as follows:
I. Compensation Provision
The Compensation provisions of the Agreement are hereby amended to add a
10% increase or $1,729.38/DT on Ferrous Chloride and a 13% increase or
$5.27/gal on 50% Hydrogen Peroxide services and as set forth in Exhibit "A"
attached hereto and incorporated herein by reference. The Contractor shall
continue to provide corrosion and odor control with hydrogen peroxide and PRI-
SC.
In all other respects, and except as specifically modified and amended herein and in
Amendment One dated May 9, 2022, Amendment Two dated January 5, 2023, and the
Agreement dated August 26, 2021, shall continue in full force and effect as written and the
parties hereto agree to be bound thereby.
******************************************************************************
1 of 3
Hydrogen Sulfide Control Services Amendment No.: Three
IFB21-0285
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals on the date first
written above.
PROCUREMENT&CONTRACTS DIVISION APPROVED AS TO FORM AND LEGALITY
City of Orlando,Florida for the use and reliance of the
City of Orlando,Florida,only.
By:
Chief Procurement Officer Date: �� , 2023
David Billingsley, CPSM,C.P.M. �<
Name, Typed or Printed
eG ( �r ASSISTANT CITY ATTORNEY
Date: 1J Q��o , 2023 ORLANDO, FLORIDA
CON ACTOR ��Q
By:
Signature
Jordan Butler, General Manager CORPORATE SEAL
Name&Title,Typed or Printed
USP Technologies
Name of Company,Corp.,etc.
5640 Cox Road
Mailing Address
Glen Allen, VA 23060
City, State and Zip
804-935-2000
Area Code/Telephone Number
************************************************************ *******************************
STATE OF FLORIDA
COUNTY OF
The foregoing instrument was acknowledged before me by means of_ physical presence or _ online
notarization,this day of ,20_,by , (name of
person) as (type of authority, (e.g.,officer,trustee, attorney in fact,etc.)for
(name of entity/party on behalf of whom instrument
was executed).
(SEAL) Signature of Notary Public—State of Florida
Print,Type, or Stamp Notary Name:
_Personally Known or_Produced Identification
Type of Identification Produced
2 of 3
Hydrogen Sulfide Control Services Amendment No.:Three
IFB21-0285
EXHIBIT "A"
(Compensation Provisions)
3 of 3
USP
technologies
Srlutions for 2r Ll ron rrn'eirrr rn::rr
Date: December 4th, 2023
To: Java rie McDonald
Over the last year there has been a significant stabilization of prices relative to 2022, allowing us to keep the
pricing without adjustments mid-year. Likewise, the transportation and energy surcharge which was necessary
over the past two years is seeing a significant change. However,there continue to be cost pressures which impact
USP's goal to continue to provide best-in-class products, services, and support for our programs at your site. In
response to ongoing pricing pressures,the Peroxide and Iron pricing will be adjusted for Orlando,effective 1/1/24.
USP is committed to Orlando and will continue to work to ensure success in program application and service,
upgrading equipment and monitoring as needed, and integrating new tools for continuous improvement. Pricing
of Peroxide and Ferrous Chloride will increase 1/1/24, but the Transportation and Energy Surcharge will drop
significantly from the current 13% to 5%. Facility Fees will remain unchanged at $560 for iron and $1,680 for
peroxide monthly. Pricing summary is below.
Item January 2024 Pricing Estimated 2024 Usage Budget Amount
Hydrogen Peroxide $5.27/gal 24,300 gal/yr $128,061
Ferrous Chloride $1,729.38/DT 86 DT/yr $148,727
The increase is necessary to offset increased material and operating costs incurred by USP Technologies. For your
reference I have included updated market details on key factors driving the price increase (see Appendix A). I
know these details can help you as you communicate these types of increases to your internal team(s).
USP Technologies will do all we can to help mitigate the impact these increases might have on your business.
Though these increases must go into effect per the dates mentioned above,we will work to optimize your program
to minimize the impact on YOY cost.
Thank you for your trust in our team and in USP. I look forward to our continued work together.
Best Regards,
Ji ves c v'chtuuvw
SE Territory Manager, USP Technologies
jgrahamla'�.usptechnologies.com
901-286-7177 mobile
www.usptechnologies.com
USP Technologies usptechnologies.com
1375 Peachtree Street,Suite 300 N,Atlanta,GA 30309 trojantechnologies.com
Phone: 404-352-6070 Fax: 404-352-6077 info@usptechnologies.com
frUSP
technologies
Appendix A
Raw Malarial/ 2023 &2024 General outlook Comment
Index
Water Treatment Prices have rebounded in 2022 8 are • There Is not an appetite by upstream feedstock suppliers to decrease prices on commodity feedstocks
Compounds staying at high level • This coupled with general decrease in capacity/output is keeping prices high
Hydrogen 2023 costs stable in H2 w/lower nat gas • Electricity and labor costs driving'catch-up pricing at some peroxide vendors,mainly transactional customers
Peroxide 2024 costs 2-3%Increase w/low nal gas • 2024 projections show nat gas will be a factor in 02,03 possibly triggering surcharges of 0.5%-1.0%
Natural Gas 2023 costs continued decline from 2022 • Natural gas costs count twice in peroxide manufacturing(energy and hydrogen).cost pressures are increasing
2024 projections at$3 surcharge trigger • USA continued exports to EU27 will artificially elevate US terminal pricing and increase surcharge risk
Chlorine Increased in 2023 • Suppliers are pushing for Increases for 2024
Mixed price scenarios for 2024 • There was some softening In the market In 2023,but prices are historically high for chlorine
Hydrochloric acid Increased In 2023 • Suppliers pushed for another round of price increases In Q4/2024 on high demand (West Coast impact)
Mixed price scenarios for 2024 • 2024 is uncertain,with increases In some regions,decreases In others
Sulfuric Acid Decreases in 2023,for spot prices • Prices generally decreased In 2023 for spot business(not contracted)
Mixed price scenarios for 2024 • Certain production stoppage(West Coast)is pushing regional pricing up in 2024
Scrap Metal Enough variability In 2023 • Supply is linked to the economy,i.e.,auto industry
2024 flat with some regional variability • Some tightness is forecasted which could drive prices up
2023 Hydrogen Peroxide Market in the U.S.
1.The increasing demand for peroxide used in electronics equipment(chips,batteries,nickel battery
recycling)will outstrip current production levels in the US In late 2024.
2.As industries increasingly prioritize eco-friendly alternatives,hydrogen peroxide's versatility as a
green oxidizing agent positions it as a viable option across sectors beyond its traditional applications.
3. The increasing focus on clean and renewable energy sources creates opportunities for hydrogen
peroxide in the energy sector.Hydrogen peroxide can play a role in fuel cells,energy storage,and even
as a green propellant in aerospace applications,offering sustainable solutions for the future.
4. There are no plans or indications that any of the current peroxide producers are investing in
expanded capacity.
5.USP is well positioned with strong supply/contract relationships with all three(3)major North
American peroxide producers.
6.USP is working now to secure longer term,more favorable supply via contract updates with our
peroxide suppliers.
2016.2026 NAM HP industry utilization rate (%)
Demand Capacity increase w COVID increased demand in semiconductors to
increase demand impact progressively tighten the market
•
ee -tfl7.� fa,:, `4 x 4og '' � x9 �. MM
%
97%
95*1
e t •
2
016 2016 202
0 1024 2026
� lei
2
USP
technologies
RMDASTm FERROUS SCRAP PRICE INDEX
RMOAS Regona!Spot Market Prices-Novembe,2923 2023 Change
Commodity North Central/Fool Ploith Modoest South Total US
+11 3%
01 flea-.MeliPo 0tee4 5550 00 S327 OU 0369 OC 5505 CO
F-FaTat4,1.45S C0-9p 5449 CO S456 00 3133 3446 90 .1.14.9%
Sitt44P0 Sctey z0224 S411 00 S409.00 1.;40,08 SC0 CO
+5 7%
CoA•
If it ji
004
—
2t41
Oat ern:A,2022 Jarwal,2023 Fetucialv 2023 kka,ch 2023 4.p0 2013 Mao 2023 June 2023 Jay 2023 kvs,2023 Septembee 2025 woe,2025 NOWA*,;023
Economics Department -American Trucking Association -Arlington,Virginia
Truck Driver Shortage
140,01x,
120,0X)
loo,oco
go,coo
to,000
20,030
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030