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Exhibit 1 - Agenda Information SheetCity of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Procurement & Compliance CFO: Antonio Puente, Jr. DATE: June 23, 2020 SUBJECT Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, approving and authorizing the expenditure of funds (not to exceed $62,000 a year for five years with a total not to exceed amount of $310,000) for the payment of fees due under a Participant Agreement between the City and ICE Futures U.S., Inc., a Delaware Corporation, for use by the City’s Energy Management Organization of Denton Municipal Electric for its market operations; and, providing an effective date. INFORMATION/BACKGROUND The City of Denton, Denton Municipal Electric (DME), are market participants of the ERCOT and North American energy markets. Consistent with the Denton Municipal Energy Risk Management Policy (“ERMP”) (Ordinance 20-420) and associated Hedge Plan, DME is required to provide economic and operational energy management of the DME energy supply portfolio. DME buys and sells energy products authorized by the ERMP with various market counterparties, ERCOT and via electronic exchanges. DME’s access to each of these market participants is via standard executed contracts with each. In its effort to achieve the best price for the benefit of DME customer-owners, access to visible markets for each traded product, including live bids and offers, is through the ICE platform. The ICE platform is universally utilized by energy traders around the globe as it provides the required price visibility and more importantly live markets that can be transacted upon through the ICE platform. DME has had access to the ICE platform since 2014 and the current standard ICE participant agreement was authorized by the City Council and executed by the City Manager on March 10, 2017. Under the terms of the agreement, DME is required to pay a monthly data access fee for each user log-identification in addition to other contractually stipulated clearing charges and fees. Currently, DME has two (2) user log-identification members. One of the users is in the EMO as the designated “trader” and the other is in the Risk Department as the designated “credit” user. In response the COVID 19 pandemic and the need for social distancing, all EMO functions that could be managed off-site have been moved to home offices. Consequently, the single “trader” log-identification member’s machine resides in the EMO for the use of the 24-hour Qualified Scheduling Entity (QSE) personnel. These QSE personnel routinely transact daily and weekly purchases and sales on the ICE platform and need access to live market bid/ask data to accurately price trades with bilateral counterparties. However, the QSE personnel do not normally execute longer dated trades, which are normally executed by the management of the EMO, who also need access to the live market information. Consequently, another “trader” user log-identification is needed so that a remote EMO trader can execute trades required by the ERMP. Section 252.022 of the Local Government Code provides that procurement of sole source commodities and services are exempt from competitive bidding, if over $50,000, shall be awarded by the governing body. City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On June 22, 2020, this item will go to the Public Utilities Board (PUB) for recommendation. RECOMMENDATION Authorize the expenditure of funds to ICE Future U.S., Inc. (IFUS), as a sole source supplier, for the purchase of access to and use of the Intercontinental Exchange (ICE) electronic exchange and platform in a five (5) year not-to-exceed amount of $310,000. PRINCIPAL PLACE OF BUSINESS ICE Future U.S., Inc. (IFUS) New York, NY ESTIMATED SCHEDULE OF PROJECT This is a five (5) year contract. FISCAL INFORMATION These products and services will be funded through the using department’s budget on an as needed basis. The City will only pay for services rendered and is not obligated to pay the full contract amount unless needed. EXHIBITS Exhibit 1: Agenda Information Sheet Exhibit 2: Executed Agreement Exhibit 3: Ordinance Respectfully submitted: Lori Hewell, 940-349-7100 Purchasing Manager For information concerning this acquisition, contact: Stephen Johnson, 940-349-7516. Legal point of contact: Mack Reinwand at 940-349-8333.