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Exhibit 1 - Agenda Information Sheet Amendment 2City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Procurement & Compliance CFO: Antonio Puente, Jr. DATE: December 17, 2019 SUBJECT Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the approval of a second amendment to a Professional Services Agreement between the City of Denton and POWER Engineers, Inc., amending the contract approved by City Council on October 9, 2018, in the not-to-exceed amount of $776,600; amended by Amendment 1 approved by the Purchasing Staff; said second amendment to provide services for CIP projects, where relay and control commissioning is required, for periodic NERC testing, meeting obligations of the Texas Municipal Power Agency (TMPA) Transmission Operator, Maintenance, and Construction Services Agreement; providing for the expenditure of funds therefor; and providing an effective date (File 6861 - providing for an additional second amendment expenditure amount not-to-exceed $604,800, with the total contract amount not-to-exceed $1,381,400). The Public Utilities Board recommends approval (7 - 0). INFORMATION/BACKGROUND Denton Municipal Electric (DME) requires the services of consultants for substation relay and control system commissioning, NERC required periodic testing of relay and control systems, support for Texas Reliability Entity (TRE) audits of commissioning and testing activities (verification of records, interpretation of records and test results, explanations of testing, etc.), review and analysis of relay operations in response to system events, technical consultations when system protection events occur or system protection questions arise, and consultation for NERC standards compliance. Over time, there will not be sufficient work to justify a full-time staff with the expertise necessary to address all these needs. Using outside resources is an efficient and reasonable method for obtaining the temporary and specialized services needed. DME has a contract with POWER Engineers, Inc. (PEI), in place for such services, but the funds approved for the contract will not be sufficient for services necessary during approximately the next two years. DME proposes an amendment to the existing contract with PEI for the professional and technical services needed to complete the tasks listed in Exhibit 2. One contingency item is included in this exhibit that provides funding for responding to emergencies or urgent needs related to relay and control system issues. This proposed second amendment adds $604,800 to the original contract amount of $776,600 for a total of $1,381,400. Amendment #1 was for a no-cost change to the contract to add testing equipment billing rates that were included in the cost but inadvertently omitted from the original contract documentation. If the responsibilities for the projects listed in Exhibit 2 are assigned to a consultant other than PEI, that consultant would require significant time to become familiar with the DME transmission system and the relay and control schemes used by DME. This would also require time from DME staff to train a new City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com consultant so that they understand all NERC and DME compliance procedures and needs, understand DME protection philosophies and testing requirements, and that they are properly trained in DME safety procedures. Also, contracting with a new firm would require that the new firm repeat testing already completed by PEI. For example, Item 2 in Exhibit 2 requires PEI to commission the new Masch Branch Substation. This testing will have to include setting and testing the transmission line protection relays in Masch Branch Substation so that they will coordinate with the transmission line protection relays in the existing adjacent substations (Jim Christal and Denton North). The transmission line protection relays in the adjacent substations were tested by PEI when those respective projects were completed. If the work is completed by PEI, then only minor testing at the existing adjacent substations would be required. PEI can rely on previous testing to certify the performance of those protection systems. If a new firm is assigned to complete this work, the transmission line protection relays in the existing adjacent substations will have to be completely retested by the new firm in order for them to certify the function of the whole protection system. Also, being unfamiliar with DME’s system and control schemes increase the potential for errors that could lead to misoperations and outages. If PEI is retained, the cost due to the time for learning and retesting mentioned above will not be incurred. PEI has been providing these types of services to DME and TMPA for several years. They are TMPA’s engineering firm of choice for system protection testing and commissioning. The charges for work under this contract amendment will not exceed $604,800. $245,900 of the total contract amendment is for testing and commissioning of Capital Improvement Program (CIP) projects and will be charged to the respective CIP project accounts. The remaining amendment amount is for operations, maintenance, and required periodic NERC testing and will be charged to the appropriate expense accounts. A majority of the work proposed will be in the transmission category. These costs for transmission projects and transmission maintenance expenses will ultimately be recovered through the Public Utility Commission transmission cost of service program (TCOS). The proposed amendment will not increase CIP costs. Amounts for all capital projects were included in the approved CIP. RECOMMENDATION Award Amendment No. 2 with POWER Engineers, Inc., for additional professional services for CIP projects where relay and control commissioning is required, for required periodic NERC testing, and meeting obligations of the Texas Municipal Power Agency (TMPA) Transmission Operator, Maintenance, and Construction Services Agreement, in the not-to-exceed amount $604,800, for a total amended contract amount of $1,381,400. PRIOR ACTION/REVIEW On October 9, 2018, City Council approved a contract with POWER Engineers, Inc., in the not-to-exceed amount of $776,600 (Ordinance 18-1483). On March 14, 2019, Purchasing approved Amendment 1 with POWER Engineers, Inc. On December 9, 2019, the Public Utilities Board (PUB) recommended this item to the City Council for consideration. PRINCIPAL PLACE OF BUSINESS POWER Engineers, Inc. Hailey, ID ESTIMATED SCHEDULE OF PROJECT This project will be started upon approval until complete. FISCAL INFORMATION These services will be funded from DME account 603246491.1360.3560. PO #187256 will be increased in the Purchasing Software in the amount of $604,800. The budgeted amount for this item is $1,381,400. EXHIBITS Exhibit 1: Agenda Information Sheet Exhibit 2: Power Engineers Task List Exhibit 3: Original Ordinance and Contract Exhibit 4: Amendment 1 Exhibit 5: Ordinance and Amendment 2 Respectfully submitted: Lori Hewell, 940-349-7100 Purchasing Manager For information concerning this acquisition, contact: Chuck Sears, 940-349-7111. Legal point of contact: Mack Reinwand at 940-349-8333.