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7167 EMO Advanced Forecasting Model Scope of Work Materials Management Department 901-B Texas Street Denton, Texas 76209 REQUEST FOR QUALIFICATIONS RFQ 7167 PROFESSIONAL SERVICES FOR ENERGY MANAGEMENT OFFICE ADVANCED FORECASTING MODEL FOR THE CITY OF DENTON NIGP CLASS and ITEM 961 88 Issue Date: September 11, 2019 Response due Date and Time (Central Time): Thursday, October 3, 2019, 11:00am The City highly recommends that respondents do not wait until minutes before the due date and time to email a submission. It can take significant time for the submissions to reach the City. City of Denton RFQ 7167 for Energy Management Office Advanced Forecasting Model RFQ 7167 - Main Document Page 2 of 9 1. INTRODUCTION In accordance with the provisions of Texas Government Code, Chapter 2254, the City of Denton (the City) is requesting submissions to contract with an individual or business with considerable experience in providing the services of this solicitation. The responses shall be submitted to the City of Denton in a sealed submission. The awarded individual or business shall possess a proven track record of using innovative approaches to providing services that represent the best value to their clients. The awarded individual or business shall have the ability to accomplish all aspects of the requested services. The selected individual or firm should be able to provide innovative methods to deal with municipal challenges, and cost effective solutions. 2. SERVICE DESCRIPTION The City is seeking a professional services contract for the development of an integrated energy forecasting model using a combination of stochastics and neural network technology. The model development requested by the City of Denton’s Denton Municipal Electric (DME) department will be used to produce probability distributions and sensitivity analysis of expected energy revenues and expenses associated with DME’s portfolio of renewable resources, the Denton Energy Center (DEC), the load served by DME and any other contract or traded positons. The firm or individual selected for the development of the model will provide ongoing support as requested by DME. Minimum features of the model will include the following: 1. Probabilistic energy production hourly profiles from each of the DME resources under contract (renewable resources) and the DEC based upon the variable cost of operating the DEC (natural gas costs and variable operating costs) for a 10 year period. a. For the DEC, the model must be able to accommodate a range of potential natural gas costs and power costs (DME will provide forward curves) and will be configured to permit the user to input natural gas and power commodity prices with sufficient granularity to achieve the highest level of accuracy, transportation costs, basis to traded hubs and commodity price inputs. b. Consultant will provide recommendations regarding how to scale hourly and intra- hourly market prices and costs for the purpose projecting future market based revenues and developing sensitivities. c. For solar resources, the model must be able to provide a probable distribution of hourly outputs based upon the range of potential irradiance seen by each solar array. Models that have the ability to learn through the provision of actual data are encouraged. DME subscribes to a product that is used to predict solar output and integration is encouraged. d. For wind resources, the model must be able to provide a probable distribution of hourly outputs based upon historical and future wind forecasts. Models that have the ability to learn through the provision of actual output and weather data are encouraged. DME subscribes to a product that is used to predict wind output and integration is encouraged. 2. Probabilistic energy consumption hourly profiles associated with DME’s served load for a 10 year forward period. DME will supply weather normalized annual peak demand and hourly City of Denton RFQ 7167 for Energy Management Office Advanced Forecasting Model RFQ 7167 - Main Document Page 3 of 9 MWh average for the 10 year period. DME uses the PRT load forecasting tool which is a neural based model. Service provider should strive to leverage this tool to its maximum extent and be prepared to discuss integration with DME and PRT. a. For DME load, the model must be able to accommodate a range of potential weather scenarios. (% of normal seasonal average temperatures) b. The model shall also be able to accommodate sensitivities for differing economic conditions in the Denton area. The economic conditions will include peak load demand, monthly energy 3. Using DME supplied cost information for renewable energy positions, the range of potential hourly margins associated with projected output from each resource for a 10-year term selling into the ERCOT market at the point of delivery. 4. The range of hourly potential gross margins from the DEC based upon a specified confidence interval. 5. Using DME supplied price curves and integration of the hourly projected output from renewable and DEC resources, the model should have the capability to project congestion exposure over the 10 year period with a focus on the 36 month period after the delivery month to assist DME is its pricing and bidding behavior in the CRR auctions. 6. The model must be able to integrate the power supply and load forecast over the 10 year period to produce sensitivity reports on gross margin and net income for the wholesale energy supply business unit. 7. A reporting tool that will enable the development of standard and custom reports, training of DME personnel on such reporting and support as needed. The products and services shall be accomplished per all exhibits identified in the table of contents. 3. MINIMUM QUALIFICATIONS The following minimum requirements must be demonstrated in order for the submission to be considered responsive to the City of Denton. Any submission received, which is determined to not meet these mandatory requirements shall be immediately disqualified and rejected as non-responsive.  A demonstrated competence in providing similar services to electric utilities, generators, trading companies and retail providers.  Three (3) references from entities for the services requested.  The responding individual or business must be registered in the State of Texas, or the County of Denton, to provide the products or services required in the solicitation, and the individual or business must have all licensure required by the State to provide any services required under this contact. To learn how to obtain information about filing with the State of Texas, or obtaining copies or certificates from the Secretary of State visit Webpage: http://www.sos.state.tx.us/corp/copies.shtml; Phone 512-463-5578; or email corpcert@sos.state.tx.us. City of Denton RFQ 7167 for Energy Management Office Advanced Forecasting Model RFQ 7167 - Main Document Page 4 of 9  Submittal documents including a cover sheet, Solicitation Checklist, Statement of Qualifications, Attachments A -F and any additional requirements, per the method described in SUBMITTAL INSTRUCTIONS. 4. SCHEDULE OF EVENTS The City of Denton reserves the right to change the dates indicated below: Solicitation Schedule: Deadline for Submission of Questions: 9/26/19 at 5:00 PM CST Deadline for Submission of Responses: 10/3/19 at 11:00 AM CST The City of Denton is using the solicitation ‘Issue Date’ as noted in the Schedule of Events above as the official 30 day notification requirement for an interview with a firm. 5. CONTRACT TERM Proposers shall submit with the proposal a schedule for the development, testing, and production of the model(s). Support services shall be provided or a period of three (3) years. The Contract shall commence upon the issuance of a Notice of Award/Issuance of Purchase Order by the City of Denton. At the sole option of the City of Denton, the Contract may be further extended as needed, not to exceed a total of six (6) months. 6. PRICING This contract is for professional services as defined in the Texas Government Code 2254 and price shall not be solicited. The City will select a firm on the basis of demonstrated competence and qualifications to perform the services described in this RFQ. Once the most qualified firm is selected, a fair and reasonable price will be set. The professional fees under this contract may not exceed any maximum provided by law. Compensation will be negotiated with the most highly qualified and experienced firm. Professional services will include the Professional’s schedule of document preparation costs, as well as hourly rates. Upon completion of the work, the Professional will provide electronic files, plots, maps, exhibits, field notes, and/or other materials as requested by the City. Payment will be made upon receipt of proposer’s monthly invoice based upon the time and materials used by provider. Pricing shall be based upon a not to exceed price negotiated between DME and provider and the hourly rates agreed to between DME and provider. Accepted negotiated prices must remain firm for the entire contract period, including any periods of extension or renewal. At the time of any renewal or extension of the contract, the city or the supplier may request a price adjustment based upon the economy. All requests for a price adjustment must include detailed documentation and rationale to support the requested adjustment. The party to whom City of Denton RFQ 7167 for Energy Management Office Advanced Forecasting Model RFQ 7167 - Main Document Page 5 of 9 a request for price adjustment is made may, in its sole discretion, accept or reject the request. Any price adjustment must be mutually agreed upon in writing by the parties, and shall be effective for the applicable renewal term. 7. STATEMENT OF QUALIFICATIONS Sealed qualifications will be accepted in accordance with the minimum qualifications detailed in section 3. The Consultant shall file all documents necessary to support its qualifications and include them in the submittal. Please include at a minimum the following:  A maximum three (3) page narrative as to the firm’s interest, particular abilities and qualifications related to this project.  The location of your office where the majority of the work on the project will be performed and the approximate number of employees in that office.  Resumes of key personnel to be assigned to this project with an organizational chart.  A list and general description of each project that the above-mentioned staff has performed that would indicate your firm’s ability to perform the work being considered. At least five (5) project examples should be included. The list of specific projects shall indicate the professional services necessary to accomplish the project, along with your client’s name and phone number. 8. SCHEDULE AND BUDGET COMPLIANCE SCHEDULE Respondents shall provide schedule for two projects of similar scope to this RFQ. Please complete the forms in detail (Attachment A). 9. REFERENCES Respondents shall provide a list of three references 10. EVALUATION PROCEDURES Selection of a firm(s) to provide the aforementioned materials and services shall be in accordance with the City of Denton Purchasing Policies and procedures and the State of Texas Government Code 2254. The City of Denton shall open all submissions and evaluate each respondent in accordance to the below criteria: Step 1: The City of Denton will evaluate the submission in accordance with the selection criteria and will rank the firms on the basis of the submittals. The City of Denton, reserves the right to consider information obtained in addition to the data submitted in the response. The selection criterion is listed below: a) Identification and understanding of the City's requirements for this project (FACTOR: 20%) City of Denton RFQ 7167 for Energy Management Office Advanced Forecasting Model RFQ 7167 - Main Document Page 6 of 9 The respondent's understanding of the objectives and scope of the requested services of the primary areas, in a clear and concise, written expression. The respondent will provide all the appropriately requested criteria consideration to be a critical component of the evaluation. b) Past Performance and experience on projects of this magnitude and complexity (FACTOR: 30%). The respondent's successful experience in projects within the primary areas similar to the scope of work requested in this RFQ will be a major consideration. Based on the past performance of both the individual project personnel and the respondent, The City of Denton will determine if the respondent has the track record to provide the required services in successfully administering similar projects. c) Experience and qualifications of the Respondent and key personnel available for this project (FACTOR: 30%). The qualifications of the respondent in terms of experience, service capability and resources will be reviewed in order to assess the ability of the respondent to successfully complete the project assignment. The firm’s ability to provide the necessary professional and technical expertise and supervision will be a major consideration. The qualifications and experience of the individuals who will be directly assigned to the primary areas is a major evaluation factor to be considered. The personnel cited shall be designated as to whether they are an employee, consultant or contract employee of the RFQ respondent. Their educational and professional credentials as well as direct experience on similar projects will be considered in evaluating the respondent. Experience with other municipally funded projects and familiarity with municipal requirements and procedures will also be considered in the evaluation process. d) Schedule presented for this service and defined in the scope of work (FACTOR: 20%) Proposed schedule for competition of the scope of work. The total possible score of the submissions shall be scored and weighted as indicated above, Step 1 items a-d. Based on the outcome of the computations performed, each submission will be assigned a raw score. The assigned weight will then be applied to these scores to calculate an overall score for each submission for completion of the final scoring process. Step 2: City of Denton will proceed to negotiate a contract with the highest ranked firm. The City may elect to conduct oral discussions, request clarifications, and presentations concerning the project approach and ability to furnish the requirements, as part of the negotiation process. Provided the City of Denton cannot successfully contract with the highest ranked firm, the City of Denton shall formally, and in writing, end all negotiations with that firm and the City of Denton may elect to proceed to negotiate with the next firm in the order of the selection City of Denton RFQ 7167 for Energy Management Office Advanced Forecasting Model RFQ 7167 - Main Document Page 7 of 9 ranking until a contract is reached or negotiations with all ranked firms end, in accordance with Texas Government Code 2254. Step 3: A written recommendation will be presented to the appropriate approving authority for the City of Denton (the City Manager, Public Utility Board, City Council) requesting authorization to proceed with contract execution for the proposed services. In accordance with Local Government Code 252.049, trade secrets and confidential information in competitive sealed proposals are not open for public inspection. All submissions shall be opened in a manner that avoids disclosure of the contents to competing respondents and keeps the responses secret during negotiations. A public opening will not be conducted with this process. After the contract has been awarded all submissions will be open for public inspection, and the unsuccessful respondent(s) may request a debriefing regarding their submittal. Please contact the City of Denton Materials Management staff to document the request for a debriefing. A meeting with the City of Denton Materials Management Staff and the using Division will be scheduled within a reasonable time. 11. CONTACT BETWEEN RESPONDENT AND THE CITY Respondents shall direct all inquiries and communications concerning this solicitation to the Point of Contact(s) listed below: Jane Rogers Sr. Buyer 901-B Texas Street Denton, TX 76209 (940) 349-7100 Fax: (940) 293-1837 Jane.rogers@cityofdenton.com City of Denton RFQ 7167 for Energy Management Office Advanced Forecasting Model RFQ 7167 - Main Document Page 8 of 9 ATTACHMENT A - SCHEDULE & BUDGET COMPLIANCE FORM SCHEDULE COMPLIANCE FORM Please detail two of the most recent projects your firm has completed: Project #1 Name of Project: Contract Award Date: Actual Contract Completion Date: Original Contract Required Completion Date: Design Phase: Date of Completion # of Days diff in Required schedule Study/Analysis ________________ ______________ Model Design & Integration ________________ ______________ Testing ________________ ______________ Production/Sensitivity Runs ________________ ______________ SCHEDULE COMPLIANCE FORM Please detail two of the most recent projects your firm has completed: Project #2 Name of Project: Contract Award Date: Actual Contract Completion Date: Original Contract Required Completion Date: Design Phase: Date of Completion # of Days diff in Study/Analysis ________________ ______________ Model Design & Integration ________________ ______________ Testing ________________ ______________ Production/Sensitivity Runs ________________ ______________ City of Denton RFQ 7167 for Energy Management Office Advanced Forecasting Model RFQ 7167 - Main Document Page 9 of 9 BUDGETING COMPLIANCE FORM Please detail two of the most recent projects your firm has completed: Project #1 Name of Project: Owner’s Original Budget amount: Design-Build Original Cost Estimate: Original Contract Total Amount: Final Construction Cost: Design Phase: Original Cost Est. Final Cost Study/Analysis ________________ ______________ Model Design & Integration ________________ ______________ Testing ________________ ______________ Production/Sensitivity Runs ________________ ______________ BUDGETING COMPLIANCE FORM Please detail two of the most recent projects your firm has completed: Project #2 Name of Project: Owner’s Original Budget amount: Design-Build Original Cost Estimate: Original Contract Total Amount: Final Construction Cost: Design Phase: Original Cost Est. Final Cost Study/Analysis ________________ ______________ Model Design & Integration ________________ ______________ Testing ________________ ______________ Production/Sensitivity Runs ________________ ______________