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Exhibit 1 - Agenda Information SheetCity of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Procurement & Compliance ACM: David Gaines DATE: November 16, 2021 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 Southern Ionics, Inc., for the supply of emissions reagent for the Denton Energy Center; providing for the expenditure of funds therefor; and providing an effective date (IFB 7548 – awarded to Southern Ionics, Inc., for three (3) years, with the option for two (2) additional one (1) year extensions, in the total five (5) year not-to-exceed amount of $2,793,000.00). The Public Utilities Board recommends approval (6 - 0). INFORMATION/BACKGROUND The Denton Energy Center (DEC) reached commercial operation in June 2018. The DEC provides power at times that renewable energy sources are not readily available and is a critical component of the City of Denton’s Renewable Resource Plan. The DEC is required by the State of Texas Commission on Environmental Quality (TCEQ) and Federal Environmental Protection Agency (EPA) regulations to meet standard air permit requirements while in operation and the emissions system reagent (Aqueous Ammonia) is the key consumable used to comply with the facility Air Permit requirements. The DEC receives 6,500-gallon shipments of 19% Aqueous Ammonia bi-weekly where it is stored onsite in 30,000-gallon bulk storage tanks, and it is then injected into the exhaust stream on operating units to assist in the chemical reaction within the selective catalytic reduction unit to reduce 98% of our potential emissions of nitrogen oxides, a regulated ozone precursor. Thus far, we have been under contract with Southern Ionics, Inc. for our supply of aqueous ammonia, however, this contract will expire on 10/31/2021. Without a supply of aqueous ammonia, the DEC cannot be operated pursuant to the TCEQ operating permit. Based on historical trends, our expenditure of reagents is $105,000 annually. Currently, we are projecting an expenditure of $929,321 total based on operating hour forecasts. However, since the facility is dispatched based on the Electric Reliability Council of Texas (ERCOT) wholesale market prices in real-time, the contract amount must be able to accommodate the full range of potential operating hours and associated reagent demand. Consequently, the contract total authorization of $2,793,000 is based on the maximum consumption of reagent over the contract period to ensure funds are available if needed. The costs for material purchased under the proposed agreement will be funded out of the DEC operating budget and ordered as needed, based on operations. City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com Project Description Estimated Expenditure Year One $558,600 Year Two $558,600 Year Three $558,600 Year Four – If extended $558,600 Your Five – if extended $558,600 Total $2,793,000 Invitation for Bids was sent to 54 prospective suppliers. In addition, specifications were placed on the Materials Management website for prospective suppliers to download and advertised in the local newspaper. One (1) bid was received, and references were checked to ensure the vendor can provide the services requested in the Scope of Work. The department is awarding the contract to Southern Ionics, Inc. NIGP Code Used for Solicitation: 180-Chemical Raw Materials (In Large Quantities Primarily for Manufacturing Janitorial and Laundry Products) Notifications sent for Solicitation sent in IonWave: 54 Number of Suppliers that viewed Solicitation in IonWave: 1 HUB-Historically Underutilized Business Invitations sent out: 5 SBE-Small Business Enterprise Invitations sent out: 21 Responses from Solicitation: 1 PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On November 8, 2021, the Public Utilities Board (PUB) recommended this item to the City Council for consideration. RECOMMENDATION Award a contract with Southern Ionics, Inc., for the supply of emissions reagent for the Denton Energy Center, in a three (3) year, with the option for two (2) additional one (1) year extensions, in the total five (5) year not-to-exceed amount of $2,793,000. PRINCIPAL PLACE OF BUSINESS Southern Ionics, Inc. West Point, MS ESTIMATED SCHEDULE OF PROJECT This is an initial three (3) year contract with options to extend the contract for two (2) additional one (1) year periods, with all terms and conditions remaining the same. FISCAL INFORMATION These items will be funded from Electric Operating Funds. The City will only pay for services rendered and is not obligated to pay the full contract amount unless needed. EXHIBITS Exhibit 1: Agenda Information Sheet Exhibit 2: Presentation Exhibit 3: Ordinance and Contract Respectfully submitted: Lori Hewell, 940-349-7100 Purchasing Manager For information concerning this acquisition, contact: Jason Brown, 940-349-7140. Legal point of contact: Marcella Lunn at 940-349-8333.