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HomeMy WebLinkAboutExhibit 1 - Agenda Information SheetCity of Denton __________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Procurement ACM: Christine Taylor DATE: September 15, 2026 SUBJECT Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the City Manager to execute a Professional Services Agreement with DNV Energy USA Inc., to provide transmission planning professional services for Denton Municipal Electric as set forth in the contract; providing for the expenditure of funds therefor; and providing an effective date (RFQ 9008 – Professional Services Agreement for transmission planning services awarded to DNV Energy USA Inc., for one (1) year, with the option for four (4) additional one (1) year extensions, in the total five (5) year not- to-exceed amount of $2,487,263.73). The Public Utilities Board recommends approval (6 - 0). STRATEGIC ALIGNMENT This action supports Key Focus Area: Enhance Infrastructure and Mobility. INFORMATION/BACKGROUND As a transmission owner/operator, transmission planner, and generation owner, Denton Municipal Electric (DME) is required to adhere to regulatory protocols, requirements, and standards from regulatory agencies including the Federal Energy Regulatory Commission (FERC), North American Electric Reliability Corporation (NERC), Texas Reliability Entity (TRE), and the Electric Reliability Council of Texas (ERCOT). The requirements include completing annual transmission planning studies such as the FERC 715 study, performing modeling updates and submitting system information on a weekly basis, coordinating transmission system changes with each ERCOT modeling group and other electric utilities, attending ERCOT working group meetings, and preparing additional studies as needed. DME is also obligated to review projects proposed by other utilities and generation entities. The annual FERC, NERC, TRE, and ERCOT requirements that DME is obligated to complete and include in the proposed contract are: • Preparation of the FERC 715 Annual Transmission Assessment (detailed evaluation of transmission performance for a five (5) year period and development of solutions that will resolve all NERC or ERCOT performance standard violations that were discovered in the analyses). • Preparation of the ERCOT Annual Steady State Working Group Data Sets (The Data Set consists of the transmission computer models for eight seasonal cases for the first future year and consists of the transmission computer models for future years two through six, which requires a total of seven additional cases). City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com • Preparation of the ERCOT System Protection Working Group present and future year short circuit cases (preparation of five short circuit models). • Submission of dynamics data in response to requests from the ERCOT Dynamics Working Group. • Preparation and maintenance of a Geomagnetic Disturbance Model. • Review and verify the ERCOT loss factor calculations • Review and update ERCOT contingency definitions • Review and update the ERCOT Data Dictionary (definition of all buses in the ERCOT power system model) • Response to inquiries and requests for information from ERCOT and any of its working groups related to modeling issues. • Coordination of planned transmission system projects with adjacent transmission owners to include review of system protection plans and changes. • Coordinate discussions with other utilities for transmission planning to ensure that projects proposed will provide the best benefit to all transmission owners in the area and represent the best solutions for resolving performance issues for all transmission service providers. • Preparation of project approval documentation for ERCOT regional planning group and ERCOT submissions. • Preparation of reports and documentation in response to ERCOT, NERC, TRE, or other utility inquiries. • Attendance at meetings to assist and represent DME, including participation in conference calls. • Preparation of Facility Interconnection Studies for submission to ERCOT for any generation interconnection requests received, including preparation of responses to any questions received from market participants. (Generation Interconnection Requests are infrequent occurrences but must be responded to when received.) It should be noted that FERC, ERCOT, and NERC requirements are “relatively” stable, but they are not static. Therefore, additional funding has been included that covers anticipated regulatory changes, the potential need for preparation of project approval submittals to ERCOT, the possibility that DME could require analytical or technical representation for proposals submitted by ERCOT or other utilities, preparation of generation interconnection requests should any be received, and for other analytical or compliance-related support needs that may arise. This proposed professional service contract is structured to be billed on an hourly basis for work performed and does not obligate DME to provide work to fulfill the contract amount or to make any minimum expenditure. Estimated Five (5) Year Expenditure Year Estimated Costs July 2026 through December 2026 $138,750.00 January 2027 through December 2027 450,660.00 January 2028 through December 2028 473,193.00 January 2029 through December 2029 496,852.66 January 2030 through December 2030 521,695.28 January 2031 through July 2031 406,112.79 Total: $2,487,263.73 Request for Qualifications (RFQ) for transmission planning services was sent to 1,902 prospective firms, including 90 Denton firms. In addition, the RFQ was placed on the Procurement website for prospective respondents to download and advertised in the local newspaper. Eleven (11) statements of qualifications (SOQ) were received. The SOQs were evaluated based on published criteria, including identification and understanding of the City’s requirements, past performance and experience, and experience and qualifications. Based upon this evaluation, the recommended award is to DNV Energy USA Inc., and is determined to be the most qualified firm for the City. NIGP Code Used for Solicitation: 285, 907, 925, 961, and 962 Notifications sent for Solicitation sent in IonWave: 1,902 Number of Suppliers that viewed Solicitation in IonWave: 89 HUB-Historically Underutilized Business Invitations sent out: 259 SBE-Small Business Enterprise Invitations sent out: 673 Responses from Solicitation: 11 PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On August 24, 2026, the Public Utilities Board (PUB) recommended this item to the City Council for consideration. RECOMMENDATION Award a contract with DNV Energy USA Inc., to provide transmission planning professional services for Denton Municipal Electric, in a one (1) year, with the option for four (4) additional one (1) year extensions, in the total five (5) year not-to-exceed amount of $2,487,264.73. PRINCIPAL PLACE OF BUSINESS DNV Energy USA Inc. Plano, TX ESTIMATED SCHEDULE OF PROJECT This is an initial one (1) year contract with options to extend the contract for four (4) additional one (1) year periods, with all terms and conditions remaining the same. Work will continue on ERCOT and FERC requirements immediately upon approval by the City Council and will proceed in accordance with technical needs. FISCAL INFORMATION The charges for work under this contract will not exceed $2,487,264.73 and will be funded from operations and maintenance budget for non-project items. Project item costs for this contract are attributable to the transmission category and will ultimately be recovered through the Public Utility Commission transmission cost of service program (TCOS). EXHIBITS Exhibit 1: Agenda Information Sheet Exhibit 2: Evaluation Sheet Exhibit 3: Ordinance and Contract Respectfully submitted: Lori Hewell, 940-349-7100 Purchasing Manager For information concerning this acquisition, contact: Mark Zimmerer, 940-349-7169. Legal point of contact: Leah Bush at 940-349-8333.