Exhibit 1 - Agenda Information SheetCITY OF DENTON
______________________________________________________________________________
AGENDA INFORMATION SHEET
DEPARTMENT: Procurement & Compliance
DCM: David Gaines
DATE: April 5, 2022
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 OTC Global Holdings LP, for the renewal of Energy
Market Price Data (ETRM) software for Denton Municipal Electric, which is the sole provider of this
software, in accordance with Texas Local Government Code 252.022, which provides that procurement of
commodities and services that are available from one source are exempt from competitive bidding, and if
over $50,000, shall be awarded by the governing body; providing for the expenditure of funds therefor; and
providing an effective date (File 7917 – awarded to OTC Global Holdings LP, in the eight (8) year not-to-
exceed amount of $349,800.00). The Public Utilities Board recommends approval (5 - 0).
INFORMATION/BACKGROUND
Denton Municipal Electric, (DME) procured an Energy Trading Risk Management (ETRM) system as
recommended by an outside consultant (Deloitte) in June of 2020. The ETRM application is wholly
dependent on having up-to-date market data that changes by the hour. Currently, DME is using a service
from OTC Global Holdings (OTCGH). OTCGH is the world’s largest independent institutional broker of
commodities, covering financial and physical instruments from offices in Chicago, Geneva, Houston,
London, Louisville, New Jersey, New York, and Singapore. The company serves more than 450
institutional clients, including over 70 members of the Global Fortune 500, and transacts in hundreds of
different commodity delivery points in Asia, Europe, and the Americas.
The OTCGH product is a set of data that is delivered up to four (4) times daily. This data is compiled in the
unique format supplied by OTCGH. The OTCGH product was procured through an Informal Request for
Quotes (IRQ) that occurred after a Request for Proposal (RFP) was issued. The bid was rejected due to none
of the offered services provided by the vendors being well-tailored enough to meet DME’s needs. Some
respondents offered data bundled with customization and visualization that drove the cost to extremely high
levels. Others offered data for natural gas, but not power and vice versa. OTCGH had all of the required
data needed at the most advantageous cost for the City.
DME selected OTCGH and used its data with the implementation of the ETRM system. OTCGH data files
use a unique format, and the ETRM system data tables were designed to accept this format. Due to this, the
ERTM cannot be fed data formats from alternate vendors without programmatic changes to the ETRM and
the data system that feeds the ETRM. The added cost of this would add $20,000 to $80,000 in ancillary
programmatic changes to accommodate alternative vendor data formats.
City Hall
215 E. McKinney Street
Denton, Texas
www.cityofdenton.com
The ETRM and the OTCGH products are at this point deeply intertwined. Tech Services performed a
Lifecycle Study for the ETRM software and noted that the data service that was implemented with the
ETRM should also be considered on the same 10-year horizon as the ETRM. Therefore, it should be
accorded sole source designation.
FY 2022 $39,000
FY 2023 $44,400
FY 2024 $44,400
FY 2025 $44,400
FY 2026 $44,400
FY 2027 $44,400
FY 2028 $44,400
FY 2029 $44,400
Total NTE $349,800
Due to the nature of the contract, the vendor will only execute agreements every two (2) years, and we are
seeking approval from Council to execute them accordingly until it has met their lifecycle. Technology
Services has given this item a 10-year lifecycle.
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.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On March 28, 2022, the Public Utilities Board (PUB) recommended this item to the City Council for
consideration.
RECOMMENDATION
Award a contract with OTC Global Holdings LP, for the renewal of Energy Market Price Data (ETRM)
software for Denton Municipal Electric, in an eight (8) year not-to-exceed amount of $349,800.
PRINCIPAL PLACE OF BUSINESS
OTC Global Holdings LP
Houston, TX
ESTIMATED SCHEDULE OF PROJECT
This is an eight (8) year contract.
FISCAL INFORMATION
These services will be funded from Denton Municipal Electric Operating Funds.
EXHIBITS
Exhibit 1: Agenda Information Sheet
Exhibit 2: Original Contract
Exhibit 3: Ordinance and Contract
Respectfully submitted:
Lori Hewell, 940-349-7100
Purchasing Manager
For information concerning this acquisition, contact: Smith Day, 940-349-7561.
Legal point of contact: Marcella Lunn at 940-349-8333.