HomeMy WebLinkAboutExhibit 1 - Agenda Information SheetCity of Denton
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AGENDA INFORMATION SHEET
DEPARTMENT: Procurement
ACM: Christine Taylor
DATE: October 13, 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 contract with Power Costs Inc., for the Energy Trading and Risk
Management (ETRM) Software, a Software as a Service (SaaS), for Denton Municipal Electric; providing
for the expenditure of funds therefor; and providing an effective date (RFP 9003 – awarded to Power Costs
Inc., in the five (5) year not-to-exceed amount of $2,891,537.00). The Public Utilities Board recommends
approval (5 - 0).
STRATEGIC ALIGNMENT
This action supports Key Focus Area: Pursue Organizational Excellence and Collaborative and Respectful
Leadership.
INFORMATION/BACKGROUND
Denton Municipal Electric (DME) implemented its Energy Trading Risk Management (ETRM) system
following a 2020 recommendation from Deloitte. Core functionality was completed by early 2021, with
ongoing enhancements continuing to improve system capability. Because ETRM platforms are typically
used for seven (7) to ten (10) years before replacement, DME is approaching a natural evaluation point—
especially as its current vendor only offers two (2) year agreements, with the latest expiring in 2026. This
contract cycle, combined with ongoing system performance issues, prompted DME to issue a Request for
Proposals (RFP) to explore alternative ETRM solutions. The goal is to identify systems that offer stronger
Electric Reliability Council of Texas (ERCOT) integration, improved settlements workflow, customized
reporting, and more accessible web-based data tools.
The purpose of an ETRM system is to track portfolio positions and movements in commodity market prices,
quantify the risk associated with hedging activities, and provide the appropriate level of internal controls
and oversight needed to support DME’s Energy Risk Management Policy.
A contingency allowance of 15% of the contract total is recommended to accommodate potential unforeseen
requirements during the ETRM implementation. Complex system integrations often reveal technical needs
that cannot be fully defined in advance. This contingency ensures the project can address emerging
requirements without delaying schedules, interrupting daily operations, or compromising compliance.
City Hall
215 E. McKinney Street
Denton, Texas
www.cityofdenton.com
Implementation and Annual Subscription Cost
Year Description Off-Prem Software ERCOT QSE Total
Year 1 Implementation $350,000 $200,000 $550,000
Year 1 Annual License 250,000 120,000 370,000
Year 2 Annually & CPI (est 3%) 257,500 123,600 381,100
Year 3 Annually & CPI (est 3%) 265,225 127,308 392,533
Year 4 Annually & CPI (est 3%) 273,182 131,127 404,309
Year 5 Annually & CPI (est 3%) 281,377 135,061 416,438
Contingency (15%) 377,157
Total NTE: $2,891,537
Request for Proposals was sent to 1,657 prospective suppliers, including three 48 Denton firms. In addition,
specifications were placed on the Procurement website for prospective suppliers to download and advertised
in the local newspaper. Six (6) proposals were received, with five (5) meeting specifications. References
were checked, and proposals were evaluated based upon published criteria, including price, delivery, and
compliance with specifications. Best and Final Offers (BAFO) were requested from the top firm. Based
upon this evaluation, Power Costs Inc. was ranked the highest and determined to be the best value for the
City.
NIGP Code Used for Solicitation:
918 - (Service Only) - Consulting
Services & 920 - (Service Only) - Data
Processing, Computer, Programming,
and Software Services
Notifications sent for Solicitation sent in IonWave: 1,657
Number of Suppliers that viewed Solicitation in IonWave: 39
HUB-Historically Underutilized Business Invitations sent out: 259
SBE-Small Business Enterprise Invitations sent out: 624
Responses from Solicitation: 6
Responses Meeting Specifications: 5
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On October 5, 2026, the Public Utilities Board (PUB) recommended this item to the City Council for
consideration.
RECOMMENDATION
Award a contract with Power Costs Inc., for the Energy Trading and Risk Management (ETRM) Software,
a Software as a Service (SaaS), for Denton Municipal Electric, in a (5) year not-to-exceed amount of
$2,891,537.
PRINCIPAL PLACE OF BUSINESS
Power Costs Inc.
Norman, OK
ESTIMATED SCHEDULE OF PROJECT
This is a five (5) year contract.
FISCAL INFORMATION
The implementation will initially be funded from Denton Municipal Electric CIP budget
605845500.1365.3980, with subsequent years funded from the operating budget. Requisition #176900 has
been entered into the Purchasing software system in the amount of $920,000. Future years will be budgeted
in DME’s operating account to align with the contract terms and annual expenditures. The City will only
pay for items purchased and is not obligated to pay the full contract amount unless needed. The budgeted
amount for this item is $2,891,537.
EXHIBITS
Exhibit 1: Agenda Information Sheet
Exhibit 2: Pricing Evaluation
Exhibit 3: Ordinance
Respectfully submitted:
Lori Hewell, 940-349-7100
Purchasing Manager
For information concerning this acquisition, contact: Juan Miguel Pagoada Reyes, 940-349-7529.
Legal point of contact: Leah Bush at 940-349-8333.