Exhibit 1 - Agenda Information SheetCity of Denton
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AGENDA INFORMATION SHEET
DEPARTMENT: Procurement & Compliance
ACM: David Gaines
DATE: November 16, 2021
SUBJECT
Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation,
authorizing the City Manager to execute a contract with Southern Ionics, Inc., for the supply of emissions
reagent for the Denton Energy Center; providing for the expenditure of funds therefor; and providing an
effective date (IFB 7548 – awarded to Southern Ionics, Inc., for three (3) years, with the option for two (2)
additional one (1) year extensions, in the total five (5) year not-to-exceed amount of $2,793,000.00). The
Public Utilities Board recommends approval (6 - 0).
INFORMATION/BACKGROUND
The Denton Energy Center (DEC) reached commercial operation in June 2018. The DEC provides power
at times that renewable energy sources are not readily available and is a critical component of the City of
Denton’s Renewable Resource Plan.
The DEC is required by the State of Texas Commission on Environmental Quality (TCEQ) and Federal
Environmental Protection Agency (EPA) regulations to meet standard air permit requirements while in
operation and the emissions system reagent (Aqueous Ammonia) is the key consumable used to comply
with the facility Air Permit requirements.
The DEC receives 6,500-gallon shipments of 19% Aqueous Ammonia bi-weekly where it is stored onsite
in 30,000-gallon bulk storage tanks, and it is then injected into the exhaust stream on operating units to
assist in the chemical reaction within the selective catalytic reduction unit to reduce 98% of our potential
emissions of nitrogen oxides, a regulated ozone precursor.
Thus far, we have been under contract with Southern Ionics, Inc. for our supply of aqueous ammonia,
however, this contract will expire on 10/31/2021. Without a supply of aqueous ammonia, the DEC cannot
be operated pursuant to the TCEQ operating permit.
Based on historical trends, our expenditure of reagents is $105,000 annually. Currently, we are projecting
an expenditure of $929,321 total based on operating hour forecasts. However, since the facility is dispatched
based on the Electric Reliability Council of Texas (ERCOT) wholesale market prices in real-time, the
contract amount must be able to accommodate the full range of potential operating hours and associated
reagent demand. Consequently, the contract total authorization of $2,793,000 is based on the maximum
consumption of reagent over the contract period to ensure funds are available if needed. The costs for
material purchased under the proposed agreement will be funded out of the DEC operating budget and
ordered as needed, based on operations.
City Hall
215 E. McKinney Street
Denton, Texas
www.cityofdenton.com
Project Description Estimated Expenditure
Year One $558,600
Year Two $558,600
Year Three $558,600
Year Four – If extended $558,600
Your Five – if extended $558,600
Total $2,793,000
Invitation for Bids was sent to 54 prospective suppliers. In addition, specifications were placed on the
Materials Management website for prospective suppliers to download and advertised in the local
newspaper. One (1) bid was received, and references were checked to ensure the vendor can provide the
services requested in the Scope of Work. The department is awarding the contract to Southern Ionics, Inc.
NIGP Code Used for Solicitation: 180-Chemical Raw Materials (In Large
Quantities Primarily for Manufacturing
Janitorial and Laundry Products)
Notifications sent for Solicitation sent in IonWave: 54
Number of Suppliers that viewed Solicitation in IonWave: 1
HUB-Historically Underutilized Business Invitations sent out: 5
SBE-Small Business Enterprise Invitations sent out: 21
Responses from Solicitation: 1
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On November 8, 2021, the Public Utilities Board (PUB) recommended this item to the City Council for
consideration.
RECOMMENDATION
Award a contract with Southern Ionics, Inc., for the supply of emissions reagent for the Denton Energy
Center, in a three (3) year, with the option for two (2) additional one (1) year extensions, in the total five
(5) year not-to-exceed amount of $2,793,000.
PRINCIPAL PLACE OF BUSINESS
Southern Ionics, Inc.
West Point, MS
ESTIMATED SCHEDULE OF PROJECT
This is an initial three (3) year contract with options to extend the contract for two (2) additional one (1)
year periods, with all terms and conditions remaining the same.
FISCAL INFORMATION
These items will be funded from Electric Operating Funds. 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: Presentation
Exhibit 3: Ordinance and Contract
Respectfully submitted:
Lori Hewell, 940-349-7100
Purchasing Manager
For information concerning this acquisition, contact: Jason Brown, 940-349-7140.
Legal point of contact: Marcella Lunn at 940-349-8333.