Exhibit 1 - Agenda Information Sheet Amendment 2City of Denton
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AGENDA INFORMATION SHEET
DEPARTMENT: Procurement & Compliance
CFO: Antonio Puente, Jr.
DATE: December 17, 2019
SUBJECT
Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation,
authorizing the approval of a second amendment to a Professional Services Agreement between the City of
Denton and POWER Engineers, Inc., amending the contract approved by City Council on October 9, 2018,
in the not-to-exceed amount of $776,600; amended by Amendment 1 approved by the Purchasing Staff;
said second amendment to provide services for CIP projects, where relay and control commissioning is
required, for periodic NERC testing, meeting obligations of the Texas Municipal Power Agency (TMPA)
Transmission Operator, Maintenance, and Construction Services Agreement; providing for the expenditure
of funds therefor; and providing an effective date (File 6861 - providing for an additional second amendment
expenditure amount not-to-exceed $604,800, with the total contract amount not-to-exceed $1,381,400). The
Public Utilities Board recommends approval (7 - 0).
INFORMATION/BACKGROUND
Denton Municipal Electric (DME) requires the services of consultants for substation relay and control
system commissioning, NERC required periodic testing of relay and control systems, support for Texas
Reliability Entity (TRE) audits of commissioning and testing activities (verification of records,
interpretation of records and test results, explanations of testing, etc.), review and analysis of relay
operations in response to system events, technical consultations when system protection events occur or
system protection questions arise, and consultation for NERC standards compliance. Over time, there will
not be sufficient work to justify a full-time staff with the expertise necessary to address all these needs.
Using outside resources is an efficient and reasonable method for obtaining the temporary and specialized
services needed.
DME has a contract with POWER Engineers, Inc. (PEI), in place for such services, but the funds approved
for the contract will not be sufficient for services necessary during approximately the next two years. DME
proposes an amendment to the existing contract with PEI for the professional and technical services needed
to complete the tasks listed in Exhibit 2. One contingency item is included in this exhibit that provides
funding for responding to emergencies or urgent needs related to relay and control system issues. This
proposed second amendment adds $604,800 to the original contract amount of $776,600 for a total of
$1,381,400. Amendment #1 was for a no-cost change to the contract to add testing equipment billing rates
that were included in the cost but inadvertently omitted from the original contract documentation.
If the responsibilities for the projects listed in Exhibit 2 are assigned to a consultant other than PEI, that
consultant would require significant time to become familiar with the DME transmission system and the
relay and control schemes used by DME. This would also require time from DME staff to train a new
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consultant so that they understand all NERC and DME compliance procedures and needs, understand DME
protection philosophies and testing requirements, and that they are properly trained in DME safety
procedures. Also, contracting with a new firm would require that the new firm repeat testing already
completed by PEI. For example, Item 2 in Exhibit 2 requires PEI to commission the new Masch Branch
Substation. This testing will have to include setting and testing the transmission line protection relays in
Masch Branch Substation so that they will coordinate with the transmission line protection relays in the
existing adjacent substations (Jim Christal and Denton North). The transmission line protection relays in
the adjacent substations were tested by PEI when those respective projects were completed. If the work is
completed by PEI, then only minor testing at the existing adjacent substations would be required. PEI can
rely on previous testing to certify the performance of those protection systems. If a new firm is assigned to
complete this work, the transmission line protection relays in the existing adjacent substations will have to
be completely retested by the new firm in order for them to certify the function of the whole protection
system. Also, being unfamiliar with DME’s system and control schemes increase the potential for errors
that could lead to misoperations and outages. If PEI is retained, the cost due to the time for learning and
retesting mentioned above will not be incurred.
PEI has been providing these types of services to DME and TMPA for several years. They are TMPA’s
engineering firm of choice for system protection testing and commissioning.
The charges for work under this contract amendment will not exceed $604,800. $245,900 of the total
contract amendment is for testing and commissioning of Capital Improvement Program (CIP) projects and
will be charged to the respective CIP project accounts. The remaining amendment amount is for operations,
maintenance, and required periodic NERC testing and will be charged to the appropriate expense accounts.
A majority of the work proposed will be in the transmission category. These costs for transmission projects
and transmission maintenance expenses will ultimately be recovered through the Public Utility Commission
transmission cost of service program (TCOS). The proposed amendment will not increase CIP costs.
Amounts for all capital projects were included in the approved CIP.
RECOMMENDATION
Award Amendment No. 2 with POWER Engineers, Inc., for additional professional services for CIP
projects where relay and control commissioning is required, for required periodic NERC testing, and
meeting obligations of the Texas Municipal Power Agency (TMPA) Transmission Operator, Maintenance,
and Construction Services Agreement, in the not-to-exceed amount $604,800, for a total amended contract
amount of $1,381,400.
PRIOR ACTION/REVIEW
On October 9, 2018, City Council approved a contract with POWER Engineers, Inc., in the not-to-exceed
amount of $776,600 (Ordinance 18-1483).
On March 14, 2019, Purchasing approved Amendment 1 with POWER Engineers, Inc.
On December 9, 2019, the Public Utilities Board (PUB) recommended this item to the City Council for
consideration.
PRINCIPAL PLACE OF BUSINESS
POWER Engineers, Inc.
Hailey, ID
ESTIMATED SCHEDULE OF PROJECT
This project will be started upon approval until complete.
FISCAL INFORMATION
These services will be funded from DME account 603246491.1360.3560. PO #187256 will be increased in
the Purchasing Software in the amount of $604,800. The budgeted amount for this item is $1,381,400.
EXHIBITS
Exhibit 1: Agenda Information Sheet
Exhibit 2: Power Engineers Task List
Exhibit 3: Original Ordinance and Contract
Exhibit 4: Amendment 1
Exhibit 5: Ordinance and Amendment 2
Respectfully submitted:
Lori Hewell, 940-349-7100
Purchasing Manager
For information concerning this acquisition, contact: Chuck Sears, 940-349-7111.
Legal point of contact: Mack Reinwand at 940-349-8333.