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Home My WebLink About2001-229ORDINANCE NO ail-aa9 AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT IN THE FORM OF TASK ORDER NO 01-C WITH R J COVINGTON CONSULTING FOR SERVICES RELATING TO TRANSITION SERVICES FOR DENTON MUNICIPAL ELECTRIC, AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, AND PROVIDING AN EFFECTIVE DATE WHEREAS, the City Council deems it in the public interest to engage the firm of R J Covington Consulting, of Austin, Texas ("Covington"), to provide consulting services to the City relating to Denton Municipal Electric, including, without limitation, transition services, and WHEREAS, the City staff has reported to the City Council that there is a substantial need for the above -described professional services, and that limited City staff cannot adequately perform the services and tasks with its own personnel, and WHEREAS, Chapter 2254 of the Texas Government Code, known as the "Professional Services Procurement Act", generally provides that a City may not select a provider of professional services on the basis of competitive bids, but must select the provider on the basis of demonstrated competence, knowledge, and qualifications, and for a fair and reasonable price, and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the professional services, as set forth in the Professional Services Agreement, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION 1 That the City Manager is hereby authorized to execute a Professional Services Agreement in the form of Task Order No 01-C by and between the City of Denton, Texas and R J Covington Consulting, of Austin, Texas, for professional consulting services relating to Denton Municipal Electric in the area of transition services, in substantially the form of the Task Order No 01-C attached hereto and incorporated herewith by reference SECTION 2 That the award of this Agreement by the City is on the basis of the demonstrated competence, knowledge, and qualifications of Covington and the ability of Covington to perform the professional services needed by the City for a fair and reasonable price SECTION 3 That the expenditure of funds as provided in the attached Professional Services Agreement is hereby authorized SECTION 4 That this ordinance shall become effective immediately upon its passage and approval PASSED AND APPROVED tlus the =/day of 2001 6d'4 � kor4k EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY By APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY S \Our Documents\Ordinances\01\Covmgton Consulting PSA-DME-TO No 01 C ord doe Task Order 01-C ATTACHMENT TO PROFESSIONAL SERVICES AGREEMENT DATED JUNE, 2001 BETWEEN THE CITY OF DENTON AND R,J COVINGTON CONSULTING TASK ORDER NO 01-C Transition Services Tasks provided for in this Attachment are directed at assisting the City staff (Staff) in areas associated with the continuing restructuring of the electric industry in Texas and assistance in maintaining and improving the analytical tools used by Staff to evaluate and project financial results for budgeting and operating purposes Following is a discussion of each of the primary areas of assistance Regulatory Support at PUC and ERCOT This area of activity includes continuing participation at the Public Utility Commission of Texas (PUC) and at the Electric Reliability Council of Texas (ERCOT) on issues affecting the City During the first part of 2001, critical issues that arose included protecting the cities' grandfathered congestion management rights and commenting on the move to charge intrazonal congestion, issues in the new transmission rule regarding retail access over municipal distribution facilities and requirements to physically unbundle operations, and DFW reliability concerns, as well as other issues As the restructuring legislation is transformed into new rules and operating protocols, issues will continue to arise that can substantially affect the City's cost of doing business RJC effectively works with Staff and the City's attorneys to provide notification, evaluation and intervention as needed to protect the City's interest These and other regulatory related activities will directly and indirectly affect the City's municipal electric system and its ability to contribute to the funding of City operations Audit of Transition Power Agreement This Task Order will also provide for assistance to Staff to implement the appropriate monitoring functions for the new Transition Power Agreement (TPA) Implementation activities can include resolving issues associated with billing, metering, settlement and other Qualified Scheduling Entity (QSE) issues RJC will assist in monitoring the wholesale supplier costs to insure it meets the 1 of 4 Task Order 01-C TPA terms until Staff financial personnel are familiar with the mechanics of the billing under the TPA Assist Staff in Updating of Financial Model RJC will work with Staff in updating the financial model to incorporate the new power supply arrangements, as well as looking at other changes that may be needed to incorporate recent changes as a result of new ERCOT protocols and PUC regulations RJC will work with new staff that will be taking on the modeling function to assist them in becoming familiar with the models and their inputs requirements RJC may also work on other activities as identified by the Director of Electric Utilities Scope of Services Task A Reeulatojy Support at PUC and ERCOT Task A-1 Attending Workshops At PUC And ERCOT 1 RJC will stay informed on activities at the PUC and ERCOT Independent System Operator (ISO) and will attend workshops as needed 2 When appropriate, RJC will participate in workshops to represent interests of City based on directions of Staff 3 RJC will work with Staff in developing positions which should be taken and strategies for working with parties involved Task A-2 Analyze Proposed Rules and Policies 1 Proposed new rules and rule changes from the PUC and associated proposed policies from the ISO will be analyzed 2 RJC will discuss proposed new rules and protocols, and changes to existing rules and protocols with Staff, helping to identify areas of concern and preparing positions that represent the interests of the City 3 RJC will meet with PUC staff and other parties as appropriate to discuss proposed rules and protocols, and present the City's concerns regarding such proposals Task A-3 Preparation of Comments 1 RIC will prepare or assist in preparing comments to be filed with the PUC representing City's position on issues brought up in proposed rules and dockets 2 These comments will be coordinated through Staff and the City's legal team 2of4 Task Order 01-C 3 RJC will assist the City's legal team as necessary in the preparation and filing of comments Task A-4 Work With Staff And Legal Team 1 RJC will have continuing communication with Staff and the City's legal team in order to monitor proposed industry changes and address those issues affecting municipalities 2 An on -going dialog will be maintained with Staff and the legal team in order to evaluate changing operating and market requirements and conditions, and evaluate potential effects on City operations 3 Information necessary to supplement and support the decision making process will be provided as requested Task A-5 Technical Support 1 RJC will provide technical support to the City's legal team to assist in the evaluation of proposals and the potential impact on the City under different scenarios 2 RJC will provide technical support to Staff, providing information as requested from time to time to assist Staff in its evaluations and planning processes 3 RJC will evaluate scenarios and proposals from perspective of City utility and as a member of TMPA Task,B Audit of Transition Power Aicreement Task B-1 Audit of TPA Billing 1 RJC will monitor the billing from supplier for the first few months to insure the billing terms are properly implemented between City and power supplier 2 RJC will assist Staff in developing auditing procedures for auditing monthly billing and work with Staff in automating the audit process Task C Assist Staff in Updating of Financial Model Task C-1 Review of Financial Model 1 RJC will work with Staff to review the DME financial model and incorporate changes needed to model and forecast power billing under the TPA 2 RJC will also discuss with Staff other possible changes needed to reflect changing ERCOT operations and market conditions, particularly in the area of how changing gas prices will affect power billing to DME, new ERCOT fees to look for, and new loss allocations within ERCOT 3of4 Task Order 01-C Budget RJC recommends a not to exceed budget of $60,000 for labor and expenses This budget will not be exceeded without prior approval of the City RJC will bill monthly with supporting documentation of activities performed The work being performed will be under the supervision of the Director of Electric Utilities and may be modified at any time upon appropriate notice to RJC EXECUTED this =day of 2001 AUTHORIZED BY CITY OF DENTON, TEXAS //// Dated 07LI7101 ATTEST JENNIFER WALTERS CITY SECRETARY ACCEPTED BY R J COVINGTON CONSULTING _,�. iFOR RL.rfc. Dated APPROVED AS TO LEGAL FORM HERBERT L PROUTY CITY ATTORNEY By By Date Dated I7117,0 4of4