Exhibit 1 - Agenda Information SheetCity of Denton
_____________________________________________________________________________________
AGENDA INFORMATION SHEET
DEPARTMENT: Procurement & Compliance
ACM: David Gaines
DATE: February 1, 2022
SUBJECT
Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation,
ratifying the expenditure of funds by the City Manager to perform Fuel Certainty and Cold Weather
Operations analysis and recommendations for the Denton Energy Center; and providing an effective date
(File 7804-001 – awarded to Black & Veatch Corporation, in the not-to-exceed amount of $135,000.00).
INFORMATION/BACKGROUND
As a result, extreme weather, and the loss of fuel to the Denton Energy Center (DEC) during winter storm
Uri in February 2021, Denton Municipal Electric (DME) incurred losses of approximately $140 million
and, due to similarly forced outages of natural gas-fired generator throughout ERCOT, the Texas grid
experienced massive and pervasive load shed events that resulted in the loss of life and property. In response
to the storm and risk to the ERCOT grid that it revealed, the Texas legislature passed SB3. This new law
imposes significant fines of up to $1,000,000 per day for failure to properly weatherize electric generating
facilities. While DME has attested to its compliance with the weatherization mandate required for the winter
of 2021/2022, longer-term compliance items such as fuel security evaluations must begin to position the
DEC and other generating units for increased reliability during the winter of 2022/2023. The inspection of
the DEC that is immanent in the coming weeks will evaluate the measures that DME has taken to prepare
for this winter and the measures that DME will take to address the specific causes of the forced outage
during winter storm Uri. DME needs to be in a position to state that a contract is in place to complete the
fuel security evaluation at the time of the inspection to avoid the potential for an allegation of non-
compliance. The Public Utility Commission of Texas (PUCT) has already fined market participants in
excess of $7 million for paperwork violations.
On August 25, 2021, DME and Procurement initiated an RFQ to put in place a set of pre-qualified
engineering firms that could perform the Fuel Certainty and Cold Weather Operations analysis along with
other anticipated future engineering needs of the department. That effort culminated in the approval of the
Pre-qualified professional services ordinance approved by the City Council on December 14, 2021
(Ordinance 21-2687). While the action taken by the City Council permits the City to select firms based on
a pre-qualified list of firms, the City’s Code of Ordinances requires an additional authorization by the City
Council of the spending authority for the work. Given the impending inspections, the time required to place
the item on the agenda for City Council action, and the potential for fines in the event that the work is not
initiated quickly, DME requested an emergency declaration so that the work could begin as soon as possible
and DME will be able to report such the ERCOT inspectors. The date of the inspection is not yet set.
City Hall
215 E. McKinney Street
Denton, Texas
www.cityofdenton.com
Based on the qualifications, knowledge, and experience in designing projects of similar type and magnitude,
staff selected Black and Veatch Corporation from a list of qualified consultants to perform this work.
Request for Qualifications for professional engineering services for Denton Municipal Electric was solicited
using the City’s formal solicitation process. City Council approved a pre-qualified list of engineering firms
on December 14, 2021.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On December 14, 2021, Council approved RFQ 7804 for a prequalified list of professional engineering
services for Denton Municipal Electric (Ordinance 21-2687).
RECOMMENDATION
Approve the spend to Black and Veatch Corporation, to perform Fuel Certainty and Cold Weather
Operations analysis and recommendations for the Denton Energy Center, in the not-to-exceed amount of
$135,000.
PRINCIPAL PLACE OF BUSINESS
Black and Veatch Corporation
Overland Park, KS
ESTIMATED SCHEDULE OF PROJECT
This project will be started upon approval with a completion date by October 2024.
FISCAL INFORMATION
These services will be funded from Electric Revenue Bonds.
EXHIBITS
Exhibit 1: Agenda Information Sheet
Exhibit 2: Contract
Exhibit 3: Ordinance
Respectfully submitted:
Lori Hewell, 940-349-7100
Purchasing Manager
For information concerning this acquisition, contact: Terrance Naulty, 940-349-7565.
Legal point of contact: Marcella Lunn at 940-349-8333.