7628 - Amendment 2 Executed
Docusign City Council Transmittal Coversheet
File Name
Purchasing Contact
City Council Target Date
Piggy Back Option
Contract Expiration
Ordinance
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Not Applicable
Cost of Study, Amendment 2
7628PSA
Christa Christian
MAY 4, 2026
NOVEMBER 14, 2023
23-2115
7628 PSA – Amendment #2 Page 1 of 2
SECOND AMENDMENT TO CONTRACT
BY AND BETWEEN THE CITY OF DENTON, TEXAS
AND NEWGEN STRATEGIES AND SOLUTIONS, LLC.
PSA 7628
THE STATE OF TEXAS §
COUNTY OF DENTON §
THIS SECOND AMENDMENT TO CONTRACT 7628 (“Amendment”) by and
between the City of Denton, Texas (“City”) and NEWGEN STRATEGIES AND
SOLUTIONS, LLC. (“Consultant”); to that certain contract executed on May 4, 2021, in
the original not-to-exceed amount of $169,500 (the “Original Agreement”); amended on
April 17, 2023, in the additional amount of $6,500 aggregating a not-to-exceed amount of
$176,000 (the “First Amendment”); (collectively, the Original Agreement and the First
Amendment are the “Agreement”) for services related to Cost of Study Services.
WHEREAS the City deems it necessary to further expand the services provided by
Consultant to the City pursuant to the terms of the Agreement, and to provide an additional
not-to-exceed amount $150,000 with this Amendment for an aggregate not-to-exceed
amount of $326,000 and
FURTHERMORE, the City deems it necessary to further expand the goods/services
provided by Consultant to the City;
NOW THEREFORE, the City and Consultant (hereafter collectively referred to as the
“Parties”), in consideration of their mutual promises and covenants, as well as for other
good and valuable considerations, do hereby AGREE to the following Amendment, which
amends the following terms and conditions of the said Agreement, to wit:
1. The additional services described in Exhibit “A” of this Amendment, attached
hereto and incorporated herein for all purposes, for professional services related to
the refresh Electric Cost if service study and expand the study to include the
Value of Solar are hereby authorized to be performed by Consultant. For and in
consideration of the additional services to be performed by Consultant, the City
agrees to pay, based on the cost estimate detail attached as Exhibit “A” to this
Amendment, a total fee, including reimbursement for non-labor expenses an
amount not to exceed $150,000.
2. This Amendment modifies the Agreement amount to provide an additional
$150,000 for the additional services with a revised aggregate not to exceed total of
$326,000.
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7628 PSA – Amendment #2 Page 2 of 2
The Parties hereto agree, that except as specifically provided for by this Amendment, that
all of the terms, covenants, conditions, agreements, rights, responsibilities, and obligations
of the Parties, set forth in the Agreement remain in full force and effect.
IN WITNESS WHEREOF, the City and the Consultant, have each executed this
Amendment electronically, by and through their respective duly authorized representatives
and officers on this date _________________________.
“Consultant”
NEWGEN STRATEGIES AND
SOLUTIONS, LLC
By:
_________________________________
AUTHORIZED SIGNATURE, TITLE
APPROVED AS TO LEGAL FORM:
MACK REINWAND,
CITY ATTORNEY
By:
_________________________________
“CITY”
CITY OF DENTON, TEXAS
A Texas Municipal Corporation
By:
_______________________________
SARA HENSLEY, CITY MANAGER
ATTEST:
JESUS SALAZAR,
CITY SECRETARY
By:
_________________________________
THIS AGREEMENT HAS BEEN
BOTH REVIEWED AND APPROVED
as to financial and operational
obligations and business terms.
_______________ ________________
SIGNATURE PRINTED NAME
__________________________________
TITLE
__________________________________
DEPARTMENT
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DirectorScott Burnham
Electric
DME General Manager
Antonio Puente Jr
11/14/2023
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net
225 Union Boulevard
Suite 450
Lakewood, CO 80228
Phone: (720) 924-7134
Fax: (720) 633-9535
September 21, 2023
via email
Bill Shepherd
Executive Manager of Business Services
Denton Municipal Electric
601 E. Hickory St.
Denton, TX 76205
Subject: Denton Municipal Electric
2024 Rate Study Update Proposal
Dear Mr. Shepherd:
Thank you for inviting NewGen Strategies and Solutions, LLC (NewGen) to propose consulting services
related to updating the rate study in 2024 (Study) for Denton Municipal Electric (DME). As you are aware,
NewGen is a consulting firm that specializes in utility rates, engineering economics, financial accounting,
and business strategy for electric, natural gas, water, wastewater, and solid waste utilities.
The following letter conveys our proposed scope of services, NewGen’s project team, and the cost
estimate, which have been developed for DME based on our recent discussions with you and DME
management.
Project Approach
NewGen proposes to complete and support the Study in eleven tasks with the option for one additional
task.
Task 1: Data Request and Review
Task 2: Kickoff Meeting
Task 3: Financial Planning Model Update
Task 4: Cost of Service Model Results
Task 5: Rate Design Model Update
Task 6: Billing Impacts and Customer Usage Analysis
Task 7: Prepare Preliminary and Final Reports
Task 8: Present Findings to DME and City Council
Task 9: Pole Attachment Model Development
Task 10: In Ground Conduit Model Development
Task 11: Miscellaneous Services Charge Model Development
Optional Task 12: AMI TOU Rate Design Model
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Exhibit A
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DME 2024 Rate Study Update Proposal 09.21.23
Task 1: Data Request and Review
Upon receiving the notice to proceed, NewGen will deliver a Data Request to gather the data and
information required to perform the Study. As data is submitted, NewGen will review the DME data and
identify any potential gaps in information or additional data required to conduct our analyses.
The data request will include important information required in developing and updating the long-term
financial planning model, customer usage analysis, and rate design model. This data request will include
utility cost accounting data, system operating statistics, customer usage characteristics, customer billing
data, advanced metering infrastructure (AMI) data, and other important information as needed.
Once NewGen receives and reviews the requested data, we may follow up with additional requests and
questions so that we may better understand the information provided. This task assumes that the data
provided by DME is accurate and consistent. Inaccuracies or inconsistencies in the accounting data may
result in additional expenses and time required that have not been included in the cost estimates below.
Deliverables
Data request
Task 2: Kickoff Meeting
NewGen will lead a virtual Kickoff Meeting with DME to discuss project logistics (e.g., milestones,
schedule, communications). The Kickoff Meeting will also include a discussion about the future of rates,
pricing, and financial planning. We will discuss DME’s current situation and existing policies, and will
consider new policies. The outcome of the meeting will provide goals for the Study and direction for rate
design.
Deliverables
Kickoff Meeting
Task 3: Financial Planning Model Update
In 2022, NewGen developed a Microsoft Excel-based (Excel) electric utility financial model for DME. The
model forecasts potential rate, debt, and capital impacts. The model contains a dashboard that shows
the projected revenue, expense, debt, and other results graphically. The model is based on Federal Energy
Regulatory Commission’s (FERC) accounting system. The financial model forecasts revenues and expenses
for a study period of 10 years to evaluate potential rate, debt, and capital impacts. Revenues are
forecasted using base rates, the Energy Cost Adjustment (ECA), and the Renewable Cost Adjustment (RCA)
independently. Forecasting base rates and related cost recovery factors’ revenue improves rate analysis
and evaluation by allowing a better understanding of those costs that are fully controlled by DME and
those that are not (e.g., purchased power). Currently, the model uses 2023 as a base year; NewGen will
work with DME to update this model to use 2024 as the base year.
One of the benefits of the financial model is scenario analysis to support DME decision making. The
financial model includes the ability to evaluate the impacts of base rate changes, debt issuances, changes
to capital programs, and significant budgetary changes. Scenario analysis provides DME flexibility in
determining the appropriate mix of rate changes, capital projects, and debt issuances to meet budgetary
or capital constraints. The total company cash requirements will be based on financial and operating
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DME 2024 Rate Study Update Proposal 09.21.23
objectives defined by the utility, including financial and key ratio objectives. This task will project cash
reserves at existing rates for each year of the Study Period for comparison with DME’s cash reserve goals.
During the modeling process, designated DME staff will be included in periodic progress updates and will
provide feedback on draft versions of the model. The results of the financial model will be presented to
DME for feedback and eventual endorsement. The cost estimate for this task assumes that the NewGen
team will facilitate a webinar with DME.
The final financial planning model will provide the revenue requirement for the Cost of Service (COS) in
Task 4. Estimated revenue requirements will include production expenses, transmission expenses,
distribution system costs, customer expenses, administrative and general expenses, investment income
(as a credit), an allowance for capital improvements and additions, and other pertinent expenses.
Deliverables
Financial forecast model
Webinar to discuss financial forecast model results
Task 4: Cost of Service Model Results
In 2022, NewGen developed an Excel-based cost of service model for DME. Utilizing the updated financial
forecast from Task 3, the COS will be updated to reflect a new test year revenue requirement. This task
will include updating the AMI data, billing determinants, lighting information, and any other allocation
data that has changed since the last COS update. The updated COS will assume that the classes used in
the last study have not changed (class energy and demand thresholds that define the commercial classes).
Deliverables
COS Model
Webinar to discuss the cost of service model results
Task 5: Rate Design Model Update
In 2022, NewGen developed an Excel-based rate design model for DME. Using the tariff rates (base rates,
ECA, RCA) and test year billing determinants, the rate design model calculates the revenues under current
rates and under any proposed rates. The rate design model allows NewGen and DME to adjust rates to
increase or decrease revenues, improve fixed cost recovery, and make any rate structure changes. The
rates will be designed to recover the revenue requirement determined in Task 3.
NewGen recommends a conference call with DME staff to review the overall results of the Study and to
jointly reconfirm or modify Study goals. NewGen and DME staff will discuss the Study results to date,
including:
Updated billing database
Proposed rates for years 2025 and 2026
Fixed cost recovery improvement
Rate simplification:
• Remove the seasonal summer rates and slowly phase out the declining winter block rates
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DME 2024 Rate Study Update Proposal 09.21.23
Deliverables
Rate Design model
Webinar to discuss the rate design model rates, revenues, and results
Task 6: Billing Impacts and Customer Usage Analysis
The rate design model also calculates billing impacts for each customer in each class for a period of 12
months. The average bills and average customer rate impacts are calculated compared to existing rates.
Using the rate design model, NewGen will conduct a customer usage analysis. To conduct the analysis,
NewGen will request from DME a complete database of its customer bills for a minimum 12-month
historical period in electronic format. With this information, NewGen will be able to model the DME billing
system in a database. The database will allow NewGen to analyze customer usage characteristics,
duplicate customer bills, and model any rate differentials between the existing and proposed rates. This
analysis is particularly important if significant changes to rate structure or rate design are anticipated.
Currently, the model uses the 2021 billing database for billing impacts; NewGen will update this model to
use the 2023 billing database for billing impacts and usage analysis. Using the database, NewGen will
provide DME with complete and comprehensive statistical information related to rate impacts on the
customers from implementing these rates. NewGen will sort and identify those customers with the
greatest rate impacts so that DME may contact these customers directly prior to rate implementation, if
desired.
This task will also include a review of DME’s customers’ billing determinants. Since billing determinants
multiplied by rates equal class rate revenues, customer and class billing determinant information is critical
in the rate design phase of the Study. NewGen will duplicate DME billing under current rates. This task
ensures that the expected results match actual results. In many cases, NewGen has found billing
discrepancies within the current billing system that require correction. This effort provides an "audit" of
the existing billing system's treatment and interpretation of customer usage compared to rates.
Deliverables
Rate Design Model with billing impacts
Task 7: Prepare Preliminary and Final Reports
Upon completion of Tasks 1 through 6, NewGen will prepare a written report describing the analyses
undertaken in the Study and the results of the analyses. NewGen will present this preliminary report to
DME for review and comment.
The report will include:
Revenue Requirement
Proposed rates for each customer class
Bill comparison between existing and proposed rates for all customers in each rate class
Projected operating results and cash reserves at proposed rates
Recommendations for needed changes to DME’s rates to improve its financial stability
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DME 2024 Rate Study Update Proposal 09.21.23
Based on comments received from DME staff, NewGen will finalize the report and submit an electronic
copy to DME.
Deliverables
Draft Report
Final Report
Webinar to discuss the reports
Task 8: Presentation of Study Results
NewGen will develop a PowerPoint presentation of the Study results for DME and for use at stakeholder
meetings and with the Public Utilities Board and the City Council. NewGen will provide a draft
presentation for feedback from DME and will integrate feedback in the final presentation to use with
stakeholders. NewGen has included one trip to Denton to present the findings and recommendations of
the Study in our budget estimate.
Deliverables
Presentation
Task 9: Wireline and Wireless Pole Attachment Model
Texas is regulated by the Federal Communications Commission (FCC); thus DME must adhere to the Pole
Attachment Act, 47 U.S.C. § 224. Section 224 was amended by the Telecommunications Act of 1996 and
by several modifications approved by the FCC since 1996. Congress authorized the FCC to regulate rates,
terms, and conditions for pole attachments, ducts, and conduits under Section 224. Per the FCC, the term
“pole attachment” means any attachment by a cable television system or provider of telecommunications
service to a pole, duct, conduit, or right-of-way owned or controlled by a utility. NewGen will review
DME’s current pole attachment Wireless Node Attachment rates charged and determine if any changes
should be made to better align with the FCC pole attachment formula.
Deliverables
Pole Attachment model
Task 10: In Ground Conduit Attachment
NewGen proposes to estimate the value of DME’s existing conduit based on the value of the conduit
determined from the FCC’s attachment rate formula for conduit. The value will be expressed per linear
foot of conduit or duct in the conduit.
The FCC attachment rate formula calculates the rate for conduit attachments as follows:
Conduit Rate = % of Conduit Capacity x Net Linear Cost of a Conduit x Carrying Charge Rate
The conduit capacity factor considers the percentage of total duct capacity occupied by an attachment.
The net linear cost of a conduit is equal to the conduit investment (net of accumulated depreciation)
divided by the total system duct length, i.e., net investment per linear foot of conduit. The annual carrying
charge rate includes the following cost elements: administration, maintenance, depreciation, applicable
taxes and fees, and rate of return (cost of capital).
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DME 2024 Rate Study Update Proposal 09.21.23
NewGen will develop the annual conduit attachment rate on a per linear foot basis using financial and
operating system data provided by DME.
Deliverables
Conduit Rate Model
Task 11: Miscellaneous Service Charges
In 2022 NewGen developed a Miscellaneous Fees Model to estimate DME’s costs associated with new
customer applications, new service charges, meter reconnect charges, meter charges, and penalties.
NewGen will add the Banner Install Fee and the Electric Vehicle Charging Rate to this model.
The City of Denton utilizes DME to install multi-purpose banners due to DME’s access to bucket trucks.
Discussion with DME staff will be conducted to determine costs to install/remove banners and a
reasonable charge to recover these costs.
DME currently provides Electric Vehicle (EV) charging in the City of Denton through ChargePoint level 2
charging stations. ChargePoint is an EV service providing charging stations, billing collection, and
maintenance. NewGen will evaluate the current costs of maintaining the chargers as well as cost of
electricity through the COS analysis to determine if the current EV rate is recovering applicable charges.
Deliverables
Miscellaneous service charges model
Optional Task 12: AMI TOU Rate Design Model
To properly develop time of use (TOU) rates, AMI data in the targeted customer class should be used to
accurately design rates and evaluate impacts. NewGen proposes an optional task to develop an AMI Rate
Design Model for DME. The model will provide for a more robust AMI-based rate design and can be used
to integrate and inform resource planning. With the penetration of AMI systems increasing, utilities are
further evaluating TOU and other rate options and structures to leverage this investment and improve
system efficiency, manage system load profiles, offer customers choices, and reduce costs. The current
and potential proliferation of EVs and distributed generation (e.g., rooftop solar) further emphasize the
need to view ratemaking as a strategic tool by integrating it with resource planning.
The AMI Rate Design Model will allow for dynamic and instantaneous analysis of all elements of TOU rates
including seasons, on/off peak periods, and pricing differentials. This unique model allows decision
makers to immediately evaluate and compare TOU structural options such as shifting rates from demand
to energy, or larger price differentials to deliver desired results. This functionality is also available to
better inform the design of EV rates or evaluate the impacts of broader distributed generation
penetration.
Some of the key components of this model include time-differentiated rate structure selections (i.e., TOU
periods and pricing); annual and customer monthly existing load profiles; and customer class monthly
billing impacts. As shown in the following figures, the model allows the user to select the months to
display customer class monthly load profiles. This allows the user to identify the peak and off-peak hourly
periods and visually see when and to what extent each customer class contributes to the system load
peak. These graphics and the ability to select options (e.g., Jun.–Aug. versus Jun.–Sept. summer months)
support the development of optimal TOU rates.
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DME 2024 Rate Study Update Proposal 09.21.23
Deliverables
Optional TOU dynamic model
Webinar to discuss the TOU rate design options
Project Team
The project team will consist of Jill Schuepbach, Kyle Palm, Nina Hartley, and administrative staff, as
necessary. Brief summaries of each team member’s experience are included below.
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DME 2024 Rate Study Update Proposal 09.21.23
Key Personnel Role, Experience, and Qualifications
Jill Schuepbach, PE
Principal
Project Role: Project Manager
Ms. Schuepbach has performed numerous utility financial forecast, cost of service, and rate design projects. Her Financial Forecast tasks include developing models to balance capital spending and rate increases, support compliance with debt covenants, and assist with general short-term and long-term decision making. Her Cost of Service tasks include the development of the revenue requirement, functionalization and classification of costs, and allocation of costs to customer classes. Her Rate Design tasks include a review of existing customer class criteria, design, tariff development, and transitioning of models for the DME’s future use. Her additional analysis includes the evaluation of miscellaneous charges and fees based on the utility’s costs and local and state policy. She has assisted with training and workshops regarding cost of service and rate design theory, industry practice, and rate strategies to governing bodies and boards. She has also presented rate study results and provided financial recommendations to governing bodies, boards, and city councils.
Ms. Schuepbach has performed electric, natural gas, and photovoltaic cost of service studies. Her efforts have included COS and TCOS studies with DME.
Kyle Palm
Senior Consultant
Project Role: Lead Analyst
Mr. Kyle Palm joined NewGen as a full-time analyst in May 2021. He assists on cost of service and rate design projects, emphasizing data-driven analytics. His efforts have included COS and TCOS studies with DME.
Nina Hartley
Data Scientist
Project Role: AMI Analyst
Ms. Nina Hartley joined NewGen as a full-time head data scientist in July 2022. She assists with cost of service and rate design projects, emphasizing data-driven analytics. Ms. Hartley has a B.S. in Applied Mathematics from Colorado State University.
Cost Estimate
Our services will be billed on a time and materials basis, and our current rates are shown below.
NewGen Strategies and Solutions 2024 Billing Rates – Subject to Change
Position Hourly Billing Rate
Partner $265 – $405
Principal $250 – $405
Senior Manager $225 – $280
Manager $195 – $225
Senior Consultant $170 – $195
Consultant $160 – $170
Administrative Services $130
Note: Billing rates are subject to change based on annual reviews and salary increases.
NewGen proposes to complete the enclosed Tasks 1 through 11 on a time and materials basis for an
estimated budget of $71,000 without the optional TOU model. Our fee estimate includes one trip to
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DME 2024 Rate Study Update Proposal 09.21.23
Denton to present the findings and recommendations of the Study at $2,500. The Task 12 Optional TOU
Model cost estimate is $8,000. With the optional TOU model, the estimated budget is $79,000.
Task Description Cost Estimate
Tasks 1–8: Rate Study Update $46,000
Task 9: Pole Attachment
Task 10: In Ground Conduit Attachment
Task 11: Miscellaneous Service Charges
$7,000
$7,000
$11,000
Subtotal $71,000
Optional Task 12: AMI Model $8,000
Total for Tasks 1–12 $79,000
Schedule
The Study is assumed to begin in January 2024 and will continue through April 2024, a period of 4 months.
We appreciate the opportunity to assist DME with this important project. If the above scope of services
and proposed budget are acceptable, please sign this letter and return it to my attention.
We look forward to working with you and your staff on this important assignment. Please contact me at
(720) 633-9496 if you have any questions.
Sincerely,
NewGen Strategies and Solutions, LLC
Tony Georgis
Managing Partner, Energy Practice
DME NewGen Strategies and Solutions, LLC Signature Signature
Name Name Tony Georgis
Title Title Managing Partner, Energy Practice
Date Date
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9/21/2023
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Sara Hensley
City Manager
11/15/2023
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net
225 Union Boulevard
Suite 450
Lakewood, CO 80228
Phone: (720) 633-9514
Fax: (720) 633-9535
October 12, 2023
via email
Bill Shepherd
Executive Manager of Business Services
Denton Municipal Electric
601 East Hickory Steet
Denton, TX 76205
Subject: Denton Municipal Electric: Value of Solar Study Proposal
Dear Mr. Shepherd:
Thank you for inviting NewGen Strategies and Solutions, LLC (NewGen) to propose consulting services
related to the development of a Value of Solar (VoS) study (Study) for Denton Municipal Electric (DME).
As you are aware, NewGen is a consulting firm that specializes in utility rates, engineering economics,
financial accounting, and business strategy for electric, natural gas, water, wastewater, and solid waste
utilities.
DME is seeking to develop a fair, equitable, and defensible VoS rate for residential and commercial
customers with on-site solar generation that is situated behind their premise meter. The purpose of the
VoS analysis is to develop a rate that compensates customers with solar generation using industry
accepted methods.
The following letter conveys our proposed scope of services, NewGen’s project team, and the cost
estimate, which have been developed for DME based on our recent discussions with you and DME
management.
Scope of Services
NewGen proposes to complete and support the VoS study in six tasks:
Task 1: Data Request and Kickoff Meeting
Task 2: Review City of Denton’s Climate Action Plan (CCAP) and Review Current DME Methodology
Task 3: Develop Value of Solar Model
Task 4: Benchmark Industry Solar Policy
Task 5: Draft and Final Reports
Task 6: Presentation of Study Results
Task 1 – Data Request and Kickoff Meeting
Upon receiving the notice to proceed, NewGen will deliver a Data Request to gather the data and
information required to perform the Study. As data is submitted, NewGen will review the DME data and
identify any potential gaps in information or additional data required to conduct our analyses.
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DME_VOS Proposal_10.12.23
After reviewing the data, NewGen will schedule a virtual Kickoff Meeting with DME. The purpose of the
meeting is the following:
Discuss the approach, work plan, and goals for the Study, including the City of Denton (City) and DME’s
philosophy for solar compensation and the CCAP.
Review the current rate structure and rate policies for DME solar customers.
Review the data available and recommend ways to address any data challenges.
Discuss Study schedule.
Deliverables
Data Request
Kickoff Meeting
Task 2 – Review the City’s Climate Action Plan (CCAP) and Current DME Methodology
NewGen will review the CCAP to understand the City’s sustainability strategies and goals. NewGen will
consider and incorporate these strategies and goals into the Value of Solar study. NewGen will also review
the current rates and rate structure for serving solar customers and the policies supporting those rates.
Our understanding is that currently DME’s solar customers are given a full base rate (not including riders)
credit as well as a Renewable Cost Adjustment (RCA) credit for each kilowatt-hour (kWh) generated in
excess of the customers’ usage.
Task 3 – Develop Value of Solar Model
NewGen will develop an analysis to determine the value that solar brings to DME in the context of DME’s
policies and commitments to distributed solar and renewable energy in general. The VoS analysis will
consider the value to DME (primarily avoided costs) as well as the potential value to the wider community.
These value elements may include benefits and externalities that are difficult to quantify, such as those
related to societal benefits and DME policy.
There are generally three categories of value elements that can be included, but are not required, in a
VoS analysis. NewGen will investigate the following three components of VoS:
1. Avoided Costs
2. Societal Benefits
3. Public Policy Incentives (if any)
The Avoided Cost value element is strictly a calculation of estimated cost savings (i.e., cost avoidance) to
DME as a result of the generation from distributed solar. Our proposed approach to determine an avoided
cost rate includes estimating cost savings for avoided energy, transmission charges, and ancillary services
charges. We propose to utilize a “typical” solar generation profile based on available data provided by
the National Renewable Energy Laboratory (NREL). The solar generation profile will be aligned with
historical hourly price data from the Energy Reliability Council of Texas (ERCOT) for energy and ancillary
services. Transmission cost savings will be estimated based on the potential reductions to DME’s four
coincident peaks (4CP) as a result of the customers’ solar generation. NewGen will work with DME to
review and evaluate these cost savings approaches and make adjustments, as appropriate, based on
DME’s specific load, costs, and preferences.
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As an option, the Avoided Cost rate may be developed with consideration given to customers that have
on-site battery storage. To accommodate those customers with battery storage, NewGen proposes an
Avoided Cost using a time-of-use or time-based approach. This approach requires an hourly rate design
model utilizing DME’s advanced metering infrastructure (AMI) data. This task is offered as optional and
is priced separately below.
The Societal Benefits value element can include quantifying the reduced emissions from fossil fueled
generation as a result of distributed solar generation. One method with which we are familiar is to
estimate the value of the reduced emissions using data from the Energy Information Administration (EIA).
The EIA provides national estimates of costs associated with carbon, methane, and nitrous oxide
emissions. We understand that DME has procured renewable resources to meet 100% of its load;
therefore, emission reductions would be estimated from ERCOT in general. NewGen will discuss its
approach to estimated Societal Benefits with DME and make adjustments, as necessary, based on DME’s
specific policies and preferences.
The Public Policy Incentive value element may include quantifying DME’s goals for distributed renewable
energy adoption and incentives for renewable energy codified in its policy and/or public commitments.
The Public Policy Incentive value element may result in increasing the overall VoS rate, depending on the
specifics of the City and DME’s policy objectives. NewGen proposes to work with DME to review its
current policies as they relate to distributed generation and renewable resources to estimate this value
element. Additionally, NewGen will consider any potential changes to DME’s policies that may directly or
indirectly impact this value element.
The VoS analysis will also consider the other utility distributed generation rate structures, programs, and
policies observed in Texas as well as in other jurisdictions (e.g., buy-all/sell-all, installed capacity charges,
net metering, feed-in tariffs, etc.). We will include a review of these other approaches to determine if
they are applicable to DME’s specific situation. For example, our recommended VoS rate structure and
program will consider DME’s current metering and billing capabilities.
Deliverables
Value of Solar Model
Discussions with DME management and staff to review approaches to value
Task 4 – Benchmark Industry Solar Policy
Recently, several states and municipal electric utilities have initiated reform efforts for their solar rates
and associated customer-sited solar systems. Specifically, NewGen will review six to eight Texas utilities
and provide a summary on how they address their distributed generation customers via rates, rate
structure, billing, and metering. We will work with DME to determine the utilities included in the
benchmark analysis. We will review and summarize these efforts to ensure that any VoS rate DME pursues
is informed by current industry practices.
Deliverables
Benchmarking Analysis
Task 5 – Draft and Final Reports
Upon completion of Tasks 1 through 4, NewGen will prepare a draft report that will describe the process,
assumptions, and policies included in this VoS Study. The report will also include benchmarking with the
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October 12, 2023
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DME_VOS Proposal_10.12.23
industry. NewGen will submit the draft report electronically to DME for review and comment. The draft
report will be reviewed with DME and NewGen will incorporate edits, comments, and changes, as
appropriate, into the final report suitable for public dissemination.
Deliverables
Draft Report
Final Report
Task 6 – Presentation of Study Results
NewGen will develop a PowerPoint presentation of the Study results for DME and for use at stakeholder
meetings and with the Sustainable Framework Advisory Committee, Public Utilities Board, and City
Council. NewGen will provide a draft presentation for feedback from DME and integrate feedback into
the final presentation to use with stakeholders. NewGen has included two trips to present the findings
and recommendations of the Study in our budget estimate.
Deliverables
Presentation of Study results to the Sustainable Framework Advisory Committee, Public Utilities
Board, and/or City Council
Project Team
The project team will consist of Jill Schuepbach (Project Manager), Grant Rabon (Advisor), Scott Burnham
(Advisor), Kyle Palm (Lead Analyst), and administrative staff, as necessary. Resumes are available upon
request.
Cost Estimate
NewGen proposes to conduct the Kickoff Meeting via a virtual platform (e.g., Microsoft Teams or Zoom),
unless otherwise requested by DME. Our fee estimate includes two trips to present the findings and
recommendations of the Study at $2,500 per trip. Per DME’s request, we can invoice DME for actual
services performed under the current Purchase Order No. 196462 dated April 2021. Our services will be
billed on a time and materials basis, and our current rates are shown below.
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Mr. Shepherd
October 12, 2023
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DME_VOS Proposal_10.12.23
NewGen Strategies and Solutions 2024 Billing Rates – Subject to Change
Position Hourly Billing Rate
Partner $265 – $405
Principal $250 – $405
Senior Manager $225 – $280
Manager $195 – $225
Senior Consultant $170 – $195
Consultant $160 – $170
Administrative Services $130
Note: Billing rates are subject to change based on annual reviews and salary increases.
NewGen proposes to complete the VoS Study as defined in the enclosed scope of services on a time and
materials basis for an estimated budget of $30,000 without the optional TOU modeling. The Task 3
Optional TOU Modeling cost estimate is $10,000. With the optional TOU modeling, the estimated budget
is $40,000.
Task Description Cost Estimate
Tasks 1–6 without Optional TOU Modeling $30,000
Optional Task 3: TOU Modeling $10,000
Total for Tasks 1–6 $40,000
Schedule
This project will begin immediately upon receipt of authorization. NewGen anticipates completion of the
Study within a two to four month timeframe.
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Mr. Shepherd
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DME_VOS Proposal_10.12.23
We appreciate the opportunity to assist DME with this important project. If the above scope of services
and proposed budget are acceptable, please sign this letter and return it to my attention.
We look forward to working with you and your staff on this important assignment. Please contact me at
(720) 924-7134 if you have any questions.
Sincerely,
NewGen Strategies and Solutions, LLC
Jill Schuepbach
Principal
DME NewGen Strategies and Solutions, LLC
Signature
Signature
Name Name Grant Rabon Title Title Partner
Date Date
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10/12/2023
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11/15/2023
City Manager
Sara Hensley
Certificate Of Completion
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Subject: Please DocuSign: City Council Contract 7628 - Cost of Study Amendment 2
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