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Exhibit 1 - Agenda Information SheetCity of Denton __________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Procurement and Compliance ACM: David Gaines DATE: August 18, 2020 SUBJECT Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the approval of a third amendment to a Professional Services Agreement between the City of Denton and GL PwrSolutions Inc., amending the contract approved by City Council on February 5, 2013, in the not-to-exceed amount of $857,469.06; amended by Amendment 1 approved by the City Manager; amended by Amendment 2 approved by the City Council; said third amendment to continue to provide compliance, studies, modeling, and other professional services for Denton Municipal Electric’s transmission and generation assets as required by 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); providing for the expenditure of funds therefor; and providing an effective date (File 5148 – providing for an additional third amendment expenditure amount not-to-exceed $284,259, with the total contract amount not-to-exceed $2,253,668.14). The Public Utilities Board recommends approval (4 - 0). INFORMATION/BACKGROUND As a transmission owner/operator, transmission planner, and a generation owner, Denton Municipal Electric (DME) is required to adhere to regulatory protocols, requirements, and standards from FERC, NERC, TRE, and ERCOT to develop annual transmission planning studies such as the FERC 715 study, perform modeling information on an weekly basis, coordinate transmission system changes with each ERCOT modeling group and other electric utilities, attend ERCOT working group meetings, and prepare additional studies as needed. DME is also obligated to review projects proposed by other utilities and generation entities. GL PWR Solutions Inc. currently provides these professional services under contract 5148. The remaining funding on this contract allows GL PWR Solutions Inc. to start the required studies and modeling related to transmission compliance requirements for 2021, but there is insufficient funding to complete these tasks. The deadline for several activities is approaching. Since timing is important, the requested amendment to utilize GL PWR Solutions, Inc. will allow DME to complete the FERC 715 study and modeling submissions before their deadline. DME must meet deadlines for all submissions to avoid being in violation of NERC, ERCOT, and TRE requirements. DME does not possess all the software and training necessary to complete the requirements. The third amendment will provide funding necessary to complete these activities for 2021. DME does intend to complete the RFQ process for a new contract for 2022 and beyond. A summary of how the City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com amendment estimate was constructed is included in the proposal attached as Exhibit 1. Amendment #1 added funding to perform studies related to the Denton Energy Center and amendment #2 added funding to extend services for 3 years. The annual FERC, NERC, TRE, and ERCOT requirements that are in effect currently are: • Preparation of the FERC 715 Annual Transmission Assessment (detailed evaluation of transmission performance for a five-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.). • 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. This requirement was added in 2016. • Review and verify the ERCOT loss factor calculations • Review and update ERCOT contingency definitions • Review and update the ERCOT Data Dictionary (definition of all busses in the ERCOT power system model) • Response to inquiries and requests for information from ERCOT and any of their 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. • Perform such follow up analysis as needed by DME to fully define project requirements. • 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. DME is working on concluding evaluation of the interconnection request for the Denton Energy Center at this time.) GL PWR Solutions has provided the above listed services for DME since November of 2010. The knowledge base that they have acquired and the computer data that has been assembled by GL PWR Solutions for the studies and ERCOT submissions since that time builds experience and understanding with the DME transmission system and provides great advantage for the future evaluations and modeling that must be completed. All the services proposed to be obtained from GL PWR Solutions are related and require much of the same data, files, knowledge, and expertise. Making use of a single entity to address all the requirements stated above, and leveraging the knowledge and data assembled by GL PWR Solutions continues to be the most efficient use of resources. 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. Contract #5148 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. DME recommends an amendment to the existing contract. This recommendation is based on reference comments from Purchasing Department, timing related to submission deadlines, and due to studies and model developments presently in process. Both entities are satisfied with the terms and conditions in the existing contract. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On February 5, 2013, City Council approved a contract with GL PwrSolutions Inc., in the not-to-exceed amount of $857,469.06 (Ordinance 2013-023). On November 2, 2016, City Manager approved Amendment 1 with GL PwrSolutions Inc., in the not- to-exceed amount of $99,500. On February 7, 2017, City Council approved Amendment 2 with GL PwrSolutions Inc., in the not-to- exceed amount of $1,012,440.08 (Ordinance 2017-033). On August 10, 2020, the Public Utilities Board (PUB) recommended this item to the City Council for consideration. RECOMMENDATION Award Amendment No. 3 with GL PwrSolutions Inc., to continue to provide compliance, studies, modeling, and other professional services for Denton Municipal Electric’s transmission and generation assets as required by 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), in the not-to-exceed amount of $284,259, for a total amended contract amount of $2,253,668.14. PRINCIPAL PLACE OF BUSINESS GL PwrSolutions Inc. Dallas, TX ESTIMATED SCHEDULE OF PROJECT This project is ongoing. FISCAL INFORMATION These services will be funded from operations and maintenance budget account 600500.7854.5880A. Purchase Order #161435 will be revised to include the third amendment amount of $284,259. The total amount of this contract is $2,253,668.14. 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: Original Ordinance and Contract Exhibit 3: Amendment 1 Exhibit 4: Ordinance and Amendment 2 Exhibit 5: Ordinance Respectfully submitted: Lori Hewell, 940-349-7100 Purchasing Manager For information concerning this acquisition, contact: Mark Zimmerer, 940-349-7169. Legal point of contact: Mack Reinwand at 940-349-8333.