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6804 Addendum No 1 Purchasing Department 901-B Texas St. Denton, TX 76209 (940) 349-7100 www.dentonpurchasing.com ADDENDUM #1 RFP # 6804 ENERGY TRADING RISK MANAGEMENT SOFTWARE Issue Date: February 5, 2019 Response due Date and Time (Central Time): February 14, 2019, 11:00 A.M. C.S.T RFP # 6804 ADDENDUM #1 The attached pages are the City’s response to clarification questions submitted by potential respondents and the City’s confidentiality agreement for the ETRM project. NO OTHER CHANGES AT THIS TIME. Please acknowledge addendum on Attachment F of the main solicitation document when submitting a proposal. QUESTIONS RECEIVED FROM PROSPECTIVE RESPONDENTS RFP 6804 – ETRM SOFTWARE 1. We received the referenced RFP and noticed the sentence: “The settlement functionality may potentially include invoicing, bilateral and ISO/Exchange settlements, or alternatively interfacing with existing systems that perform those functions, as well as cash application and accruals” We want to clarify if Denton is looking for stand-alone ETRM software or a complete solution which includes the back-office/settlements functionality? Denton’s response: The short answer is that we want a tool with what is commonly known as “back office” functionality, and that would include things like settlement and invoicing. Through experience we have seen that for some vendors this comes as standard, but for others it is offered as an option at additional cost. For the former type it’s no issue as their offer will include it. For the latter type however, they need to be sure that the back office option is added. That way we can be comparing ‘apples to apples’ as the saying goes. I would add for context that there is a significant difference between wholesale/exchange settlement in an ETRM and ISO settlement. Typically ETRM systems can and should be able to settle standard wholesale and Exchange transactions, but will have a more troublesome time with ISO settlements, where data comes in much small time buckets that vary for both prices and quantities on a regular basis. We are not requiring an ISO settlement tool to be built in, but we do expect a reasonable wholesale/Exchange, physical and financial capability to assist/support middle and back office functions. 2. For questions received for which related to the Confidentiality Agreement: Denton’s response: For the purpose of responding to the RFP, the section below is applicable: 1.6 Confidentiality DME has the expectation that detailed mutual exchanges of information that may be confidential, commercially sensitive, or are protected intellectual property may need to occur between Respondent(s) and DME at a future point during product exploration, or negotiation. For any such confidential information disclosed as part of a response to this RFP, the City of Denton will keep such information confidential and will not disclose to third parties to the extent that it is legally permitted. All respondents should be aware that Denton is required to comply with the Texas Public Information Act (Chapter 552 of the Texas Government Code) (“TPIA”) when responding to records requests made under the Act. The City of Denton has the expectation that it will select a group of semi-finalist from the RFP respondents and will engage in a deeper examination of the product or service in this phase. In this deeper examination detailed mutual exchanges of information that is confidential, of a competitive nature that may reveal cyber system architecture/security QUESTIONS RECEIVED FROM PROSPECTIVE RESPONDENTS RFP 6804 – ETRM SOFTWARE features, or may be protected intellectual property may be required between Respondent and the City Denton. In anticipation of this, the City of Denton has provided a proposed Confidentiality Agreement as part of this RFP that Respondent may execute and include with its response. Respondent my also propose its own Confidentiality Agreement or Non- Disclosure Agreement for review by the City of Denton’s Legal Department, who will review and advise the City of its acceptability. If not acceptable, additional negotiations and changes will occur prior to execution. The respondent should mark the portions of their response as ‘confidential’ or ‘protected’ and as described above we will respect that designation. It also described that there may be an additional phase where a few vendors will have demonstrations involving additional information where they prefer to have a CA in place. In anticipation of that, Denton has supplied the attached document as a template with this addendum. If your company has an existing CA with DME, a new CA will need to be established. 3. What is the physical power scheduling system you currently use to interface with ERCOT to do your DA/RT trading? Denton’s response: Currently DME utilizes nMarket as its ERCOT ISO communications interface but expects to phase out nMarket and utilize OSI as its future ERCOT ISO communications interface with the successful ETRM system for its QSE scheduling activities with ERCOT. 4. We request that we have an additional one more week to send us our response. Please let us know if this is possible. Denton’s response: The RFP submittal deadline will not be extended. 5. In the 6804-4 ETRM Technical Questionnaire spreadsheet, question 42 and 43 refer to “question 69”, but there are only 43 questions, and 53 rows. Please clarify which question this is referring to. Denton’s response: References to “question 69” should be replaced with “question 41” (on row 51 of the spreadsheet. 6. Section 1.1 of document 6804-3 outlines roles for 10 unique users. Has DME considered the required number of concurrent users (ex: 10 unique users but max of “x” in the system at any given time)? Denton’s response: Six (6) concurrent users 7. Please can you clarify what is expected in response to the SOW? Based on the RFP submission requirements it states that the document 6408-3 should be reviewed as part of the process. Can you QUESTIONS RECEIVED FROM PROSPECTIVE RESPONDENTS RFP 6804 – ETRM SOFTWARE confirm if you are expecting responses to the questions outlined in this document to be included within the document and returned as part of the response? Denton’s response: Responses should include answers to the questions shown in the SOW labeled as 6804-3 ETRM Software SOW Technical Specifications as well as the technical questions in the document labeled as 6804-4 ETRM Technical Questionnaire. See Question 27 for further detail. 8. In section 1.2 of document 6804-3 one of the front office management functions listed is scheduling. Please can you clarify if this is referring to gas and/or power scheduling and provide detail of the scheduling activities you are doing / plan to do that would be in scope of the project? Denton’s response: See answer to Question 3. 9. Part of the middle office functionality that is requested in section 2.5 of document 6804-3 is around market data gathering. Please can you elaborate on the market data you are capturing here- for example is this referring to price data, bids / offers from ERCOT, etc.? Denton’s response: The market data referred to in section 2.5 described in paragraph 3 includes all information needed for pricing and trade valuation decisions and includes ERCOT day-Ahead and real time prices, results of ERCOT congestion auctions (for CRRs), forward and futures price curves for energy and ancillary services (bids and offers), interest rates, correlations and volatilities. 10. Is there any intent to capture/migrate historical data in the selected system? Denton’s response: Yes. See answer to Question 18. 11. What are DME’s expectations for participation by their resources during Project Implementation (i.e. # of FTE’s and their roles)? Denton’s response: One (1) FTE has been approved for Project Implementation. 12. Are there any blackout periods to be noted pre or post implementation (i.e. Q4)? Denton’s response: No blackout periods have been identified at this time. 13. What are the business continuity and disaster recovery requirements for the proposed solution (Target RPO and RTO)? Denton’s response: DME is only interested in a hosted solution. We are looking for a target RPO of 15 minutes and a target RTO of one (1) hour. QUESTIONS RECEIVED FROM PROSPECTIVE RESPONDENTS RFP 6804 – ETRM SOFTWARE 14. Most ETRM platforms require significant up-front analysis and planning, followed by continuous oversight and review by independent business & technology experts, to be successful. With this in mind, is Denton Municipal Electric (DME) open to response submissions from respondents who are not "software providers" per se, but "system integrators" (SIs) with deep implementation experience across a variety of leading ETRM software platforms? These responses will address the project planning, execution methodology, approach and expertise which such a respondent can provide to DME, regardless of the ETRM software platform they choose. Denton’s response: Yes, DME is open to response submissions from respondents who are not “system integrators” 15. If the ETRM platform's 'Reporting Solution' is unable to fulfill all requirements out of the box, then is there going to be a ""Reporting Database"" which will be distinct from the ETRM and the Data Warehouse? Denton’s response: There are no plans for a separate “Reporting Database”. DME is looking for an ETRM system that supports its full reporting requirements If yes, then: a. Should this be included in the respondent's proposal? Denton’s response: N/A (see above) b. Should it contain (possibly redundant) data that might be needed in the Data Warehouse as well? Denton’s response: N/A (see above) Asking this question because of multiple references to ""denormalized"" tables for various activities such as Trade Data, Credit Exposure, Accounting, Invoices et al in the requirements for the software vendor. c. Is it correct to assume that this requirement for a "Reporting Solution" is valid only if the ETRM software supports it out-of-the-box, and it is not required to create another reporting DB in parallel to the ETRM for reporting? Denton’s response: N/A (see above) 16. Does DME use a single source vendor for price feeds or do they receive prices from each publication individually? Denton’s response: This has not yet been determined. The system should be capable importing prices from multiple vendors. 17. Methodology: Have DME identified the project execution methodology or are you expecting direction from the vendor or system integrator (SI)? Denton’s response: DME has not yet adopted a project execution methodology. As noted in Section 19 of 6804-0 Energy Trading Risk Management Software Main Solicitation, 10% of the Evaluation will be based on the Respondent’s schedule to complete the project, including the ability to meet required milestones for completion. QUESTIONS RECEIVED FROM PROSPECTIVE RESPONDENTS RFP 6804 – ETRM SOFTWARE 18. Data Migration: Please provide the counts and ranges of transactions, books, counterparties, pipelines (PZL) and other relevant data entities which are expected to be migrated to the new system. Also, please provide any guidelines or requirements for migration (such as trade history etc.). Denton’s response: Data migration from existing system will be minimal; about 600 transactions, 12 Books, 17 Counterparties and 1 Pipeline covering mid-2014 to present. However, the ability to upload data programmatically (with no user intervention) is an important feature DME is looking for (e.g. several years’ worth of forward prices for multiple time of use periods and ERCOT locations). 19. In case of DME selecting a cloud based ETRM implementation, there will be requirements to integrate the cloud solution with existing, on-premise decision support tools, applications, database and shared folders. a. Is the Implementation Provider expected to design and provision the connection, VPN and integration routes between the two setups, or will it be handled by DME's own network teams? Denton’s response: DME’s network team will be the primary contact for designing and implementing the VPN connection and integration routes. DME will perform the networking activity on its side of the connection. The vendor will perform the networking implementation for their side of the connection. b. If the Implementation Provider is expected to provide these services and include them in the scope of the RFP; please provide a detailed list of locations, VPN/security requirements, integration routes (protocols, ports etc.) and any other details which might have an impact on such design/implementation. Denton’s response: N/A. DME will provide the VPN services in collaboration with the Vendor. c. Will there be similar requirements for development and test environments? Denton’s response: A Dev/Test environment, if required, should meet all the design specifications of the production system. 20. Does DME IT have guidelines for development and integration technologies? If yes, please share them with the respondents. Denton’s response: DME does not have formal guidelines for development and integration technologies. DME does not have any developers on staff to perform application development or software integrations. However we follow industry standards and best practices and we are also subject to various regulatory requirements that could impact design. If there is a specific development or integration question or concern, please let us know and we will address it. 21. List the number of external systems (Price sources, ISO's, Pipeline, exchanges etc.) that connect to ETRM or provide current system landscape diagram. Denton’s response: See diagram below QUESTIONS RECEIVED FROM PROSPECTIVE RESPONDENTS RFP 6804 – ETRM SOFTWARE 22. Would DME like to utilize a system integrator's (SI) advice and inputs in choosing ETRM products? Denton’s response: DME is open to considering proposals that utilize a system integrator’s advice and inputs. 23. The requirements provided with the RFP provide a high level view of DMEs business and technology landscape. This means that the estimates need to include time for detailed requirements gathering. Is this a correct assumption, or would DME provide detailed requirements after respondent selection? Denton’s response: DME will provide detailed requirements after respondent selection as part of its negotiation of final pricing, terms and conditions. 24. Implementation provider (SI) can only identify the customization/out of box areas after the vendor product selection is complete, and based on the detailed requirements. Does DME expect a refinement of estimates and implantation plan after vendor product selection? Denton’s response: Correct, DME expects a refinement of estimates and implantation plans after vendor product selection as part of the negotiation of final pricing, terms and conditions. 25. Does DME's Project Steering Committee (or a similar body) have any "guiding principles" for handling scope changes or schedule interruptions, e.g. prioritize schedule over functionality; or prioritize functionality over budget, etc.? If so, please share. Denton’s response: No “guiding principles” for handling scope changes or schedule interruptions have been adopted at this time. QUESTIONS RECEIVED FROM PROSPECTIVE RESPONDENTS RFP 6804 – ETRM SOFTWARE 26. Does DME envision extensive, full team trainings, or a "train the trainer" approach? Denton’s response: DME prefers a full team training approach. 27. Regarding the submission format for RFP #6804. In the RFP, the outlined submission format does not include Exhibit 3. Can you please tell us where in the proposal we are supposed to include the answers to the questions in Exhibit 3? Denton’s response: Please include your response to the questions in Section 2.9 of Exhibit 3 in a separate document and clearly label it as “Response to Exhibit 3, Section 2.9 Questions”.