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HomeMy WebLinkAbout1999-011Note: First Amendment - Ordinance No 99-187 #ote: Second Amendment - Ordinance No. 99-388 DOTE. Third Amendment - Ordinance No 2000-288 ORDINANCE NO ' 9_ D!l AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT WITH R J COVINGTON CONSULTING GROUP FOR CONSULTING SERVICES PERTAINING TO ELECTRIC RESTRUCTURING MATTERS AND THE POSSIBLE DIVESTITURE OF THE CITY'S ELECTRIC GENERATION AND DISTRIBUTION ASSETS, AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, AND PROVIDING AN EFFECTIVE DATE WHEREAS, the City Council deems it in the public interest to engage R J Covington Consulting to provide professional consulting services to the City pertaining to the electric restructuring matters and the possible divestiture of the City's electric generation and distribution assets, and WHEREAS, Chapter 2254 of the Texas Government Code, known as the "Professional Services Procurement Act", 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 and qualifications, and for a fair and reasonable price, and WHEREAS, the professional fees as provided in the Professional Services Agreement are fair and reasonable, considering all relevant factors, as well as the magnitude of the project for which R J Covington Consulting is being engaged, and said professional fees do not exceed any maximum provided by law for such professional services, 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 S CTION I That the City Manager is hereby authorized to execute a Professional Services 'Agreement with R J Covington Consulting for professional consulting services pertaining to electric restructuring matters and the possible divestiture of the City's electric generation and distribution assets, in substantially the form of the Professional Services Agreement attached hereto and incorporated herewith by reference SECTION II That the award of this Agreement is on the basis of the demonstrated competence and qualifications of R J Covington Consulting and the ability of R J Covington Consulting to perform the services needed by the City for a fair and reasonable price StCTION III That the expenditure of funds as provided in the attached Professional Services Agreement is hereby authorized SECTION IV That this ordinance shall become effective immediately upon its passage and approval PASSED AND APPROVED this the 'L_ day of 11999 JACK LER, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY By APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY By S \Our Documents\Ordinances\98\RJCovington Consulting PSA (Divest RFP) doc PROFESSIONAL SERVICES AGREEMENT FOR CONSULTING SERVICES RELATING TO THE DENTON MUNICIPAL ELECTRIC UTILITY STATE OF TEXAS COUNTY OF DENTON THIS AGREEMENT is made and entered into as of the—&--t, day oflM 1999, by and between the City of Denton, a Texas Municipal Corporation, wit is principal office at 215 E McKinney Street, Denton, Denton County, Texas 76201 ("CITY") and R J Covington Consulting, a sole proprietorship, with his principal office at 13276 Research Blvd, Suite 204, Austin, Travis County, Texas 78750 hereinafter ("COVINGTON"), acting herein by and through their respective duly authorized representatives WITNESSETH, that in consideration of the covenants and agreements herein contained, the CITY and COVINGTON do hereby AGREE as follows ARTICLE I EMPLOYMENT OF CONSULTANT The CITY hereby contracts with COVINGTON, as an independent contractor, and COVINGTON hereby agrees to perform the services herein in connection with the Scope of Services as stated in the Articles to follow, with diligence and in accordance with the highest professional standards customarily obtained for such services in the State of Texas ARTICLE 11 SCOPE OF SERVICES A Covington shall provide to the CITY professional consulting services pertaining to the potential divestiture of part or all of the City's electric utility COVINGTON shall work with City staff and project team members in gathering information and developing a Request For Proposals (RFP) to purchase the distribution system and/or generation assets COVINGTON will assist in the development of the Offering Memorandum, the draft Purchase Power Agreement and other necessary agreements and documents COVINGTON will assist in the marketing of utility assets and the evaluation of proposals received in response to the RFP Details of these and related tasks to be provided under this Agreement are set forth in Task Order 99-A B To consult with the City Manager, Assistant City Manager/Utilities, the Director of Electric Utilities, the City Attorney, and other designated administrative personnel regarding any and all aspects of the services to be performed pursuant to this Agreement ARTICLE III PERIOD OF SERVICE This Agreement shall become effective upon execution by both the CITY and COVINGTON, and shall remain in force for the period which may reasonably be required for the completion of the work described in Article I1 herein, or at such time that the total fee provided for herein shall be expended, whichever event shall first occur This Agreement may be sooner terminated in accordance with the provisions hereof Time is of the essence in this Agreement COVINGTON shall make all reasonable efforts to complete the services set forth herein as expeditiously as possible and to meet the schedule established by the CITY, acting through its City Manager or its Director of Electric Utilities ARTICLE IV COMPENSATION A COMPENSATION TERMS "Direct Non -Labor Expense" is defined as that expense for any assignment incurred by COVINGTON for supplies, long-distance telephone, telecopier, reproduction expense, overnight courier, photocopy expense, transportation, travel, communications, subsistence and lodging away from home and similar incidental expenses reasonably incurred in connection with that assignment B BILLING AND PAYMENT 1 For and in consideration of the professional services to be performed by COVINGTON herein, the CITY agrees to pay COVINGTON, a total fee, including reimbursement for direct non -labor expense, not to exceed Two Hundred Ninety -Eight Thousand One Hundred Dollars ($298,100) 2 The fee for the services described in this Agreement to be performed by COVINGTON are to be billed at the rates as set forth in Exhibit A attached hereto and incorporated herewith by reference Billing shall be reported in minimum one -quarter (1/4) hour increments 3 Payments to COVINGTON will be made by the CITY on the basis of detailed monthly statements rendered to and approved by the CITY through its City Manager or the Director of Electric Utilities However, under no circumstances shall any monthly statement for services exceed the value of the work performed at the time a statement is rendered 4 Nothing contained in this Article shall require the CITY to pay for any work which is unsatisfactory as reasonably determined by the City Manager or the Director of Electric Utilities, or which is not submitted in compliance with the terms of this Agreement The City shall not be required to make any payments to COVINGTON when COVINGTON is in default under this Agreement 5 It is specifically understood and agreed that COVINGTON shall not be authorized to undertake any work pursuant to this Agreement which would require additional payments by the Covington Professional Services Agreement Page 2 CITY for any charge, expense or reimbursement above the maximum not -to -exceed fee as stated, without first having obtained written authorization from the CITY C PAYMENT If the CITY fails to make payments due COVINGTON for services and expenses within forty five (45) days after receipt of COVINGTON'S undisputed statement thereof, the amounts due COVINGTON will be increased by the rate of one percent (1%) per month from the said forty-fifth (45th) day, and in addition, COVINGTON may, after giving ten (10) days' written notice to the CITY, suspend services under this Agreement until COVINGTON has been paid in full all amounts due for services, expenses and charges provided However, nothing herein shall require the CITY to pay the late charge of one percent (1%) set forth herein if the CITY reasonably determines that the work of COVINGTON is unsatisfactory, in accordance with this Article IV, Compensation ARTICLE V OBSERVATION AND REVIEW OF THE WORK COVINGTON will exercise reasonable care and due diligence in discovering and promptly reporting to the CITY any defects or deficiencies in his work or the work of any subconsultants performed hereunder ARTICLE VI OWNERSHIP OF DOCUMENTS All documents prepared or furnished by COVINGTON (or COVINGTON's subconsultants) pursuant to this Agreement, are instruments of service and shall become the property of the CITY upon the termination of this Agreement COVINGTON is entitled to retain copies of all such documents The documents prepared and furnished by COVINGTON are intended only to be applicable to this professional engagement and CITY'S use of these documents in other projects shall be at CITY'S sole risk and expense In the event the CITY uses the Agreement in another project or for other purposes than specified herein for any of the information or materials developed pursuant to this Agreement, COVINGTON is released from any and all liability relating to its use in that project ARTICLE VII INDEPENDENT CONTRACTOR COVINGTON shall provide services to the CITY as an independent contractor, not as an employee of the CITY COVINGTON shall not have or claim any right arising from employee status ARTICLE VIII INDEMNITY AGREEMENT COVINGTON shall indemnify and save and hold harmless the CITY and its officers, agents, and employees from and against any and all liability, claims, demands, damages, losses and expenses, including but not limited to court costs and reasonable attorney's fees incurred by Covington Professional Services Agreement Page 3 the CITY, and including without limitation, damages for bodily and personal injury, death and property damage and damages for professional malpractice resulting from the negligent acts or omissions of COVINGTON or any subconsultants, in performance of this Agreement COVINGTON's liability under this Article VIII is expressly limited to the limit of COVINGTON's insurance as set forth in Article IX Nothing in this Agreement shall be construed to create a liability to any person who is not a party to this Agreement and nothing herein shall waive any of the parry's defenses, both at law or equity, to any claim, cause of action or litigation filed by anyone not a party to this Agreement, including the defense of governmental immunity, which defenses are hereby expressly reserved ARTICLE IX INSURANCE During the performance of the Services under this Agreement, COVINGTON shall maintain the following insurance with an insurance company licensed to do business in the State of Texas by the State Insurance Commission or any successor agency that has a rating with Best Rate Carriers of at least an "A-" or above A Comprehensive General Liability Insurance with bodily injury limits of not less than $500,000 for each occurrence and not less than $500,000 in the aggregate, and with property damage limits of not less than $100,000 for each occurrence, and not less than $100,000 in the aggregate B Automobile Liability Insurance with bodily injury limits of not less than $500,000 for each person and not less than $500,000 for each accident, and with property damage limits of not less than $100,000 for each accident C Professional Liability Insurance with policy limits of not less than $1,000,000 annual aggregate D COVINGTON shall furnish insurance certificates or insurance policies at the CITY's request to evidence such coverages The insurance policies shall name the CITY as an additional insured on all such policies to the extent legally possible, and shall contain a provision that such insurance shall not be canceled or modified without thirty (30) days prior written notice to CITY and COVINGTON In such event, COVINGTON shall, prior to the effective date of the change or cancellation, deliver substitute policies furnishing the same coverage to the CITY ARTICLE X ARBITRATION AND ALTERNATE DISPUTE RESOLUTION The parties agree to settle any disputes under this Agreement by submitting the dispute to arbitration or other means of alternate dispute resolution such as mediation No arbitration or alternate dispute resolution arising out of or relating to, this Agreement involving one party's disagreement may include the other party to the disagreement without the other's approval Covington Professional Services Agreement Page 4 ARTICLE XI TERMINATION OF AGREEMENT A Notwithstanding any other provision of this Agreement, either party may terminate this Agreement by giving thirty (30) days advance written notice of termination to the other party B This Agreement may also be terminated in whole or in part in the event of either party substantially failing to fulfill its obligations under this Agreement No such termination will be effected unless the other party is given (1) written notice (delivered by certified mail, return receipt requested) of intent to terminate and setting forth the reasons specifying the nonperformance, and not less than ten (10) business days in which to cure the failure, and (2) an opportunity for consultation with the terminating party prior to termination C If this Agreement is terminated prior to completion of the services to be provided hereunder, COVINGTON shall immediately cease all services and shall render a final bill for services to the CITY within 30 days after the date of termination The CITY shall pay COVINGTON for all services properly rendered and satisfactorily performed and for reimbursable expenses to termination incurred prior to the date of termination in accordance with Article IV, Compensation Should the CITY subsequently contract with a new consultant for the continuation of services on the Project, COVINGTON shall cooperate in providing information COVINGTON shall turn over all documents prepared or furnished by COVINGTON pursuant to this Agreement to the CITY on or before the date of termination, but may maintain copies of such documents for its use ARTICLE XII RESPONSIBILITY FOR CLAIMS AND LIABILITIES Approval by the CITY shall not constitute nor be deemed a release of the responsibility and liability of COVINGTON, or any subconsultants of COVINGTON, for the accuracy and competency of their work product ARTICLE XIII NOTICES All notices, communications, and reports required or permitted under this Agreement shall be personally delivered or mailed to the respective parties by depositing same in the United States mail at the address shown below, certified mail, return receipt requested unless otherwise specified herein Mailed notices shall be sent to the parties at the following addresses To COVINGTON R J Covington Consulting ATTN Richard J Covington 13276 Research Blvd, Suite 204 Austin, Texas 78750 To CITY City of Denton ATTN Sharon Mays, Director of Electric Utilities 901-A Texas Street Denton, Texas 76201 Covington Professional Services Agreement Page 5 All notices shall be deemed effective upon receipt by the party to whom such notice is given ARTICLE XIV ENTIRE AGREEMENT This Agreement consisting of eight (8) pages constitutes the complete and final expression of the agreement of the parties and is intended as a complete and exclusive statement of the terms of their agreements and supersedes all prior contemporaneous offers, promises, representations, negotiations, discussions, communications and agreements which may have been made in connection with the subject matter hereof ARTICLE XV SEVERABILITY If any provision of this Agreement is found or deemed by a court of competent jurisdiction to be invalid or unenforceable, it shall be considered severable from the remainder of this Agreement and shall not cause the remainder to be invalid or unenforceable In such event, the party stall reform this Agreement to replace such stricken provision with a valid and enforceable provision which comes as close as possible to expressing the intention of the stricken provision ARTICLE XVI COMPLIANCE WITH LAWS COVINGTON shall comply with all federal, state, local laws, rules, regulations, and ordinances applicable to the work covered hereunder as they may now read or hereinafter be amended ARTICLE XVII DISCRIMINATION PROHIBITED In performing the services required hereunder, COVINGTON shall not discriminate against any person on the basis of race, color, religion, sex, national origin or ancestry, age, or physical handicap ARTICLE XVIII PERSONNEL COVINGTON represents that he has secured, or will secure at his own expense any additional personnel required to perform all the services required under this Agreement Such personnel shall be subconsultants of COVINGTON, and shall not be employees or officers of, nor have any contractual relations with the CITY COVINGTON shall inform the CITY of any conflict of interest or potential conflict of interest that may arise during the term of this Agreement Covington Professional Services Agreement Page 6 All services required hereunder will be performed by COVINGTON or under his supervision All personnel engaged in work shall be qualified and shall be authorized and permitted under state and local laws to perform such services ARTICLE XIX ASSIGNABILITY COVINGTON shall not assign any interest in this Agreement and shall not transfer any interest in this Agreement (whether by assignment, novation or otherwise) without the prior written consent of the CITY ARTICLE XX MODIFICATION No waiver or modification of this Agreement or of any covenant, condition, limitation herein contained shall be valid unless in writing and duly executed by the party to be charged therewith and no evidence of any waiver or modification shall be offered or received in evidence in any proceeding arising between the parties hereto out of or affecting this Agreement, or the rights or obligations of the parties hereunder, and unless such waiver or modification is in writing, duly executed, and, the parties further agree that the provisions of this section will not be waived unless as herein set forth ARTICLE XVI MISCELLANEOUS A COVINGTON agrees that CITY shall, until the expiration of three (3) years after the final payment under this Agreement, have access to and the right to examine any directly pertinent books, documents, papers and records of COVINGTON involving transactions relating to this Agreement COVINGTON agrees that the CITY shall have access during normal working hours to all necessary COVINGTON facilities and shall be provided adequate and appropriate working space in order to conduct audits in compliance with this section The CITY shall give COVINGTON reasonable advance notice of any intended audits B Venue of any suit or cause of action under this Agreement shall lie exclusively in Denton County, Texas This Agreement shall be governed by, and construed in accordance with the laws of the State of Texas C For the purpose of this Agreement, the key person who will perform most of the work hereunder shall be Richard J Covington However, nothing herein shall limit COVINGTON from using other qualified and competent members of his firm to perform the services required herein D COVINGTON shall commence, carry on, and complete the work required by this engagement with all applicable dispatch, in a sound, economical, efficient manner and in accordance with the provisions hereof In accomplishing the work, COVINGTON shall take such steps as are appropriate to ensure that the work involved is properly coordinated with related work being carried on by the CITY Covington Professional Services Agreement Page 7 E The CITY shall assist COVINGTON by placing at COVINGTON's disposal all available information pertinent to the work required by this engagement, including previous reports, any other data relative to the project and arranging for the access to, and make all provisions for COVINGTON to enter in or upon, public and private property as required for COVINGTON to perform services under this Agreement F The captions of this Agreement are for informational purposes only and shall not in any way affect the substantive terms or conditions of this Agreement IN WITNESS WHEREOF, the City of Denton, Texas has caused this Agreement to be executed in four original counterparts, by its duly authorized City Manager, and COVINGTON has a ecuted this A reement by its duly authorized undersigned owner and proprietor on this the ay of 1999 _d "CITY" CITY OF DENTON, TEXAS A N;Lqicipal Corporation W/Jez- ATTEST JENNIFER WALTERS, CITY SECRETARY By AP ?0VED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY i "COVINGTON" R J COVINGTON CONSULTING By 1en' Richard J Covm n - Presid Covington Professional Services Agreement Page 8 EXHIBIT A FEES FOR SERVICES Professional and support services, except for testimony, shall be billed at the following rates Executive Consultant $150 00 per hour Sr Management Consultant $140 00 per hour Management Consultant $130 00 per hour Sr Consultant $120 00 per hour Consultant $105 00 per hour Assistant Consultant $ 90 00 per hour Technical Assistant $ 65 00 per hour Research Assistant $ 55 00 per hour Administrative Assistant $ 45 00 per hour The above rates shall be adjusted each year, commencing January 1, 2000, to reflect the change in rates officially established by R J Covington Consulting Testimony shall be billed at not less than eight hours per day Reproduction, printing, communications, computer services, and other miscellaneous support services shall be billed at rates for such services as determined from time to time and officially established by R J Covington Consulting All travel, food, lodging, and other work -related expenses, except automobile mileage, associated with the provision of services hereunder shall be billed at cost Automobile mileage shall be billed at the mileage rate as published by the Internal Revenue Service from time to time City shall pay to R J Covington Consulting any applicable sales tax, if in fact there is any sales tax lawfully owing, which arises from, and becomes due and owing regarding services performed by R J Covington Consulting ATTACHMENT TO PROFESSIONAL SERVICES AGREEMENT DATED JANUARY 5,1999 BETWEEN THE CITY OF DENTON AND R J COVINGTON CONSULTING TASK ORDER NO 99-A DISTRIBUTION AND GENERATION RFP This Task Order sets forth specific services to be provided by R J Covington Consulting (RJC) to the City of Denton (City) pursuant to the Professional Services Agreement dated January 5,1999 Tasks provided for in this Amendment are for consulting services to work with the City and other Project Team members in obtaining bids for sale of the City's electric system Separate bids will be solicited for the distribution system and the City's generation assets Bids will be evaluated and presented to the City Upon a decision by the City to sale the distribution system, the generation assets, or the total electric system, negotiations will be held with the successful bidder/bidders RJC will assist the City throughout the process, supporting and augmenting City staff and working with the City's other consultants and attorneys on specific tasks The tasks which RJC will be involved in are listed in the attached Scope of Services Scope of Services (See Attachment A) Budget The budget for the above scope of services for time and expenses is estimated at $298,100 This budget will not be exceeded without prior approval of the City RJC will bill monthly with supporting documentation of activities performed EXECUTED this Oday of 1991 CITY CONSULTANT R J COVINGTON CONSULTING By /Ct�sf i1, L Richard J Co gton Attachment A CITY OF DENTON DISTRIBUTION AND GENERATION RFP TASK ORDER DEN99-A Task ® Task Resp Parties Develop Project Plan A 1 Ass l t in re aratlon of schedule REED/RJC A 2 'den'fication of ro act team REED/RJC A 3 Esta Ilah res onsiblitles and milestones REED/RJC/CITY General Documentation B 1 Determine sources for various documents RJC B 2 Work with City staff to assemble documents CITY/RJC B 3 Prepare supplemental documentation REED/RJC Environmental Assessments C 1 Coordinate environmental evaluations RJC C 2 Reviw Phase I Report - Distribution System REED/RJC/CITY C 3 Review Phase I Report -Generation REED/RJC/CITY C 4 Revi w with project team need for Phase II Assessments REED/RJC/CITY C Wntoup of environmental issues for OM REED/RJC/CITY C _L 6 Dev;1oD outline Identifying air quality considerations RJC/CITY/REED C 7 Rev w proposed changes regarding air quality Impacting City plants RJC/CITY/REED C 8 Review proposed changes regarding air quality impacting Gibbons Creek RJC/CITY/REED C 9 Prov de wrIteup of air quality issues for OM RJC/CITY/REED C 10 Review with City and Legal TEAM Eval atlon of Water Supply/Discharge for Generation Plants D 1 Iden IN Issues related to water supply/wastewater RJC/CITY D 2 Evaluate discharge rights and ability to transfer RJC/CITY D 3 Determine rate Cwill sell water to plant RJC/CITY D 4 Dete Ine rate Cl!lt will charge for wastewater treatment RJC/CITY D 5 Day to a reement for water & wastewater supply RJC/CITY D 6 I and Legal Review with City TEAM Fuel/Transportation E 1 Review fuel and transportation contracts RJC E 2 Identify Issues RJC E 3 Research and document transferability RJC E 4 Document gas supply considerations RJC E 5 Review coal trans ortatlon Issues RJC/REED E 6 Coo dinate coal pile assessment RJC/REED E 7 Review hydro water release contracts RJC E 8 Review with City and Legal TEAM Purchased Power Agreement PPA 1 Eval ate power requirements under different sale scenarios RJC 2 Review load forecast RJC 3 Dev to ricin a roaches for full and artial re uirements RJC/CITY/REED OF 4 Dev to erformance standards for unit contin ent sales RJC 5 Add ess ancilla services, controlareaconsiderations RJC 6 Add ess transmission Issuesrelated to VAMM/Losses RJC 7 Evaluate TMPA generation issues RJC/CITY/REED F 1 8 Rev ew TMPP Agreement and address Issues RJC/CITY F 9 Address other ERCOT/ISO/PUC Issues RJC F 10 Devtlop Transmission Interconnect Agreements RJC Page 1 Attachment A CITY OF DENTON DISTRIBUTION AND GENERATION RFP TASK ORDER DEN99-A Task ® Task Res Parties �0 F 11 Develop schedules for PPA RJC F 12 Prepare draft PPA RJC F 13 Review PPA win City and Legal TEAM F 14 Finalize draft PPA RJC Subcontrol Area Rew w DGG relatlonshi with members RJC/CITY List ssets and costs RJC Dev to descri tlon of o erations RJC Dev to Ian re ardin Garland Investment RJC/CITY Rew w with CI and Le al TEAM Dev to Communications Plans Dev to informational resentation - PUC RJC/REED Dev to infomational resentation - Le islature RJC/REED Review with CI and Le al TEAM IDOG Fins cial Issues Eval ate Issues related to abill to se arate TMPA transmission in sale REED/RJC/CITY Dev to Offerin Memorandum OMWork with Ci to fill In tem lates for OM RJC/CITY Dev to descri tion of assets REED/RJC Pre are Introduction/overview to rocess REED/RJC Discuss ro ected o eratin statements for Gibbons Creek RJC Disc ss O&M roections for Gibbons Creek RJC Des rl tions of fuel su I RJC/REED Des rl tions of water su I RJC Des ribe expansion opportunities RJC J T List eneflts of Spencer site RJC J 10 Provide envlrnomentai overview RJC/REED J 11 Provide Le islative/PUC/Ercot Market overview RJC J 12 Developoverview of plant operations and DGG RJC J 13 Dev to Investment highlights REED/RJC J 14 Dev to financial information historic & projected) REED/RJC J 15 Review with City and Legal TEAM Pur hale and Sale Agreement P&S K 1 Con uct Terms of Sale Issue analysis REED/RJC K 2 Ravi wTMPA-specific Issues RJC/REED K 3 Revl w City -specific issues RJC/REED K 4 Evaluate position regarding wholesale contracts Bowie RJC K 5 Detaliled boundary specifications/maps REED/RJC K 6 Work with City staff In developing P&S schedules RJC K 7 Interconnection and Operation Agreements for plants RJC/REED/CITY K 6 P&S draft review CITY/RJC K 1 9 1 Review with City and Legal TEAM Page 2 Attachment A CITY OF DENTON DISTRIBUTION AND GENERATION RFP TASK ORDER DEN99-A Task # Task Resp Parties Marketing & Sale L 1 Dev Ion target market list REED/RJC L 2 Develop marketing approach for each site REED/RJC L 3 Deve lo Early nterest Letter REED/RJC L 4 Dev Io Re uest For Statement of Intent RFSI REED/RJC L 5 Dev to new confidential) agreement REED/RJC L 6 Review with CI and Legal TEAM L 7 IssueRFSI REED/RJC 8 Publicize RFSI REED/RJC 9 Obta n uali In roosals/indicative bids REED/RJC 10 Eval ate uail In ro osals/Indicative bids REED/RJC 11 Sele shortlist REED/RJC RL 12 Develo final biddin Instructions REED/RJC 13 Issu final RFP/bid instructions REED/RJC 14 Rec Ive bidders' fee REED/RJC 15 Deli ffering memorandum & CD Roms REED/RJC L 18 Iden I ke personnel, brief on role in marketingplant REED/RJC L 17 Dev to tours for shortlst REED/RJC L 18 Site clean-u and preparation REED/RJC L 19 Commence tours REED/RJC L 20 Final proposals evaluated - P&S REED/RJC L 21 Final ro owls evaluated - PPA RJC/REED L 22 Final winnin ro osal/ ro osals announced REED/RJC L 23 Ne let one REED/RJC L 24 Fina Ize PPA RJC/CITY Closing M 1 Fins due dill once REED/RJC M 2 Pre re necessa documentation REED/RJC M 3 Clog n REED/RJC Coo dlnatlonlAdministratlon N 1 Coordinate activities between City, other TMPA Cities, TMPA RJC/CITY N 2 Coordinate activities between departments within City RJC/CITY N 3 Cc munications between Utility, Board City Mgr & Council REED/RJC N 1 4 Administration of budgets, personnel and outside consultants CITY/RJC Page 3 ORDINANCE NO 99-/� / AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY MANAGER TO EXECUTE A FIRST AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT FOR CONSULTING SERVICES PREVIOUSLY ENTERED INTO BY THE CITY AND R J COVINGTON CONSULTING ON JANUARY 5, 1999, BY ADDING TASK ORDER NO 99-B THERETO, PROVIDING FOR ADDITIONAL PROFESSIONAL SERVICES TO BE PERFORMED RELATING TO THE POTENTIAL DIVESTITURE OF ALL OR A PART OF THE CITY'S MUNICIPAL ELECTRIC UTILITY, AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, PROVIDING FOR RETROACTIVE EFFECT OF THE AGREEMENT, AND PROVIDING AN EFFECTIVE DATE THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION I. That the City Manager is hereby authorized to execute a first amendment to the "Professional Services Agreement For Consulting Services Relating to the Denton Municipal Electric Utility", heretofore entered into by and between the City of Denton, Texas and R J Covington Consulting, Austin, Texas on the 5`h day of January, 1999, (which Agreement was approved by the Council in Ordinance No 99-011, enacted on January 5, 1999), providing for professional consulting services in the area of electric restructuring and the potential divestiture of all or a part of the City's electric system, which first amendment is set forth in Task Order No 99-B ("Task Order"), a copy of which is Task Order is attached hereto and incorporated herewith by reference, and which Task Order provides that R J Covington Consulting shall perform additional professional consulting services to the City, and which Task Order provides for the payment by the City of additional fees not to exceed $ 12,000 00 respecting the additional services to be performed by R J Covington Consulting SECTION II. That the expenditure of funds as provided for in the attached Task Order No 99-8 is hereby authorized SECTION III. That the above -referenced first amended Agreement is hereby ratified and retroactively approved, and shall be effective from and after May 2, 1999 SECTION IV. That this ordinance shall become effective immediately upon its passage and approval.. 1 PASSED AND APPROVED this the / � day of O"Ze, 1999 J �LER, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY �I� L Ewe .//!/ /.� /9�// / APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY By S \Our Docoments\0rdintmces\99\PJC 1st Amended PSA TO 99•E DME doc FIRST AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT DATED JANUARY 5,1999 BETWEEN THE CITY OF DENTON AND R.J. COVINGTON CONSULTING TASK ORDER NO 99-B Tasks provided for in this Amendment are to assist the city of Denton (City) by reviewing regulatory information received from the City's attorneys as it pertains to the electric utility industry Because of the large amount of information related to the electric industry restructurmg and other industry changes, and the need to determine those issues for which timely intervention or participation by the City is important, RJC will review data provided, file as appropriate, and keep the Director of Electric Utilities (Director) informed of issues requirmg actions by the City and schedules for actions SCOPE OF SERVICES Task A Catalog Information Provided By City and By City's Attorneys On Regulatory Issues RJC will catalog information received from the City and its attorneys for reference purposes A file system will be maintained of documents received for quick reference and retrieval of information related to specific projects and dockets The documents will be available to City upon request Task B Review Of Information RJC will review documents received from the City and its attorneys and notify Director when new dockets or projects are received For those dockets and projects which are identified by the Director for close watch, RJC will provide a weekly status of activities in these projects and dockets. Task C ConeWting Services Based on RJC's experience in the industry and with the Public Utility Commission (PUC), RJC will review with the Director how issues may affect the City and whether the City should intervene RJC will coordinate discussions with City's attorneys when so directed by the Director Task D Scheduling Services RJC will assist in maintaining a schedule of projects and workshops at the PUC and at ERCOT of which the Director needs to be aware Information from RJC can be combined with information from other sources to keep an updated schedule of activities needing the Director's attention Information from RJC will be updated weekly and will be provided to Director in an agreed upon format Budget The budget for the above scope of services for time and expenses is estimated at $12,000 for the period May 2,1999 through May 1, 2000 This scope of services is for high level review of documents and does not include in-depth review or analyses Such additional services will be provided to City under separate Task Orders and budgets at the direction of the City, The budget established in this Task Order will not be exceeded without prior approval of the Cary RJC will bill monthly with supporting documentation of activities performed EXECUTED this L3 day of 1999 CITY CONSULTANT R J COVINGTON CONSULTING By 4�� At— Mchard J Covington ORDINANCE NO _WJQ AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY MANAGER TO EXECUTE A SECOND AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT FOR CONSULTING SERVICES PREVIOUSLY ENTERED INTO BY THE CITY AND R J COVINGTON CONSULTING ON JANUARY 5, 1999, AND AS PREVIOUSLY AMENDED BY FIRST AMENDMENT THERETO ON JUNE 1, 1999, BY ADDING TASK ORDER NO 99-C THERETO, PROVIDING FOR ADDITIONAL ELECTRIC INDUSTRY PROFESSIONAL SERVICES TO BE PERFORMED RELATING TO THE POTENTIAL DIVESTITURE OF ALL OR A PART OF THE CITY'S MUNICIPAL ELECTRIC UTILITY AND OTHER RELATED MATTERS, AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, PROVIDING FOR RETROACTIVE EFFECT OF THE AGREEMENT, AND PROVIDING AN EFFECTIVE DATE THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION I That the City Manager is hereby authorized to execute a Second Amendment to the "Professional Services Agreement For Consulting Services Relating to the Denton Municipal Electric Utility" (the "Agreement"), heretofore entered into by and between the City of Denton, Texas and R J Covington Consulting, Austin, Texas on the 5`h day of January, 1999, (which Agreement was approved by the Council in Ordinance No 99-011, enacted on January 5, 1999), providing for professional consulting services in the area of electric restructuring and the potential divestiture of all or a part of the City's electric system, all as set forth in Task Order No 99-A, and which Agreement was thereafter first amended to provide for additional professional consulting services in the area of electric restructuring as set forth in Task Order No 99-13, which First Amendment to the Agreement was approved by the Council in Ordinance No 99-187, enacted on June 1, 1999 The Second Amendment to the Agreement is set forth in Task Order No 99-C (the "Task Order"), a copy of which Task Order is attached hereto and incorporated herewith by reference, and which Task Order provides that R J Covington Consulting shall perform additional regulatory, technical, and related support electric industry professional consulting services to the City, and which Task Order provides for the payment by the City of additional fees and expenses not to exceed $ 100,000 00 respecting the additional services to be performed by R J Covington Consulting pursuant to Task Order No 99-C SECTION II That the expenditure of funds as provided for in the attached Second Amendment to Agreement pursuant to Task Order No 99-C is hereby authorized SSECTION III That the above -referenced Second Amended Agreement is hereby ratified and retroactively approved, and shall be effective from and after September 1, 1999 SECTION IV That this ordinance shall become effective immediately upon its passage and approval PASSED AND APPROVED this the 7� day of 1999 JAC LLER, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY B1 Y APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY BY S \Our Documents\0rdinances\99\PJC2nd Amended PSA-TO 99 C DME doe SECOND AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT DATED JANUARY 5,1999 BETWEEN THE CITY OF DENTON AND R T COVINGTON CONSULTING TASK ORDER NO 99-C Electric Industry Services Activities to be performed under this Task Order by R J Covington Consulting (RJC) are for the purpose of providing regulatory, technical and analytical support to the City on activities associated with electric restructuring in Texas and on issues relating to the City's participation in the Denton, Garland, Greenville sub -control area (DGG) RJC will provide professional consulting services and technical support for City staff (Staff) related to various regulatory and operational activities affecting the City Tasks provided for in this Task Order include participation in projects, workshops and rulemakings at the Public Utility Commission of Texas (PUC) RJC will act as Staff liaison to the PUC to keep Staff informed on activities at the PUC, work with Staff and their attorneys in developing positions on issues, assist Staff in responding to issues that affect the City and provide technical support for Staff and City's legal experts on regulatory issues At the Electric Reliability Council of Texas (ERCOT), RJC will monitor and report on activities that are in progress to define and develop systems for retail access as mandated in Senate Bill 7 RJC will participate on committees and working groups to assist Staff in representing the interest of the City and DGG RJC will also conduct technical analyses and studies as directed by DGG that will assist DGG in evaluating positions and responding to market changes related to on -going restructuring activities Background The PUC has, in Project 20970 - Plan For Implementing Senate Bill 7, identified 36 projects for developing the rules and policies that will shape the electric industry leading up to retail access on January 1, 2002 These projects will either directly affect the City's municipal electric system and DGG operations, or by shaping and defining the competition, indirectly affect the way the City and DGG will conduct its electric business The shaping of the industry is taking place at several levels on a very fast paced schedule This includes, 1) PUC Projects leading to Rulemakmgs, 2) Other PUC Dockets 1 of 5 and Activities, and 3 ) ISO Activities The rules, policies, procedures and systems are to be in place by June 1, 2001, for the start of the customer choice pilot program This means that there are multiple projects and associated rulemakmgs, as well as, multiple ERCOT groups working on addressing implementation issues that will affect the City's electric system Often these projects and working groups are proceeding simultaneously and at a rapid pace Some of the key issues presently being addressed that directly affect municipalities include • When and under what rules will municipals be required to make transmission costs of service filings This will affect the City's recovery of its investment in transmission plant for current as well as future filings • Will municipals have access to transmission to transport power from existing resources, or will they have to go to the market and purchase special congestion management rights to transport that power on a firm basis • Will municipals have to purchase renewable energy credits if it decides to opt -in to retail access and at what price will those credits be available • Will municipals have to purchase credits for natural gas generation to meet state mandates that favor natural gas over coal? • How will units be designated as must -run units and how will they be compensated • The costs associated with implementing customer choice, who pays, how much, and when? Some of the issues that are currently being addressed that will indirectly affect municipalities are • How is stranded costs allocated to customer classes for the IOU's • How will the IOU's be unbundled into separate business units? • What services will the unbundled entities offer, when and where? • What Code of Conduct will be adopted for IOU's and how will the PUC determine the Code of Conduct for municipalities that opt -in to retail access Some of the other activities at ERCOT that will affect municipalities and DGG operations include • Moving from multiple control areas to a single control area • How scheduling of loads and generation will work in a retail environment • How settlement will work to track and reconcile costs and how municipalities will fit into that process • How can the City and DGG best position itself in the evolving market? RJC's work will focus on activities at the PUC and at ERCOT to address restructuring and regulatory issues RJC's activities will include 1) Attending workshops hosted by PUC and ISO 2of5 2) Address issues at ERCOT that affect City and DGG costs, such as ERCOT policies on redispatch of generation due to transmission constraints 3) Participating on relevant PLC and ISO conumttees to discuss and debate issues and develop positions 4) Analyzing proposed rules filed by PLC and policies presented by ISO 5) Preparation of comments to be filed at the PLC to present the City's position on issues 6) Analyzing comments filed by other parties on issues affecting City 7) Working with City Staff and legal team to develop responses to positions taken by other parties adverse to the City's positions 8) Providing technical support to Staff and the City's legal team on issues before the PLC and the ISO 9) Maintaining information on activities at the PLC, ERCOT ISO and the Legislature that supports effective representation on issues in these and related proceedings associated with restructuring in Texas 10 )Meeting with ERCOT staff to discuss operational concerns of City and DGG 11 )Meeting with representatives of other utilities and other market segments to discuss proposed rules and procedures that may impact the City and DGG 12 )Keep Staff informed of issues needing their attention and assisting Staff in preparing for deregulation Scope of Services Task A Attending_ Workshops At PUC And ISO RJC will stay informed on activities at PLC and ISO and will attend workshops as needed When appropriate, RJC will participate in workshops to represent interest of City based on directions of Staff Staff will be briefed on issues addressed and positions taken by parties at workshops Task B Participation On Committees Task Forces and Working Groups 1 RJC will participate on PLC and ERCOT committees, task forces and working groups, as approved by Staff , in order to evaluate issues and support solutions to the larger group that will reflect the City's and DGG's position on issues being addressed 2 Staff will be kept informed of issues being addressed in committees and positions of parties 3 RJC will discuss with Staff positions which should be taken and strategies for working with parties involved 3of5 Task C, Analyze ProRosed Rules and Policies The proposed new rules and rule changes from the PUC and associated proposed policies from the ISO will be analyzed RJC will discuss proposed new rules and changes to existing rules with Staff, helping to identify areas of concern and preparing positions on rules that represent interests of City RJC will meet with PUC staff as appropriate to discuss the proposed rules and present the City/s concerns regarding PUC staff proposals Task D Preparation of Comments 1 RJC will prepare or assist in preparing comments to be filed with PUC representing City's position on issues brought up in proposed rules 2 These comments will be coordinated through Staff and the City's legal team 3 RJC will assist the City's legal team as necessary in the preparation of and filing of comments Task E Work With Staff And Legal Team 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 An on -going dialog will be maintained with Staff and the legal team in order to evaluate changing proposals and evaluate potential effects on City operations Information necessary to supplement and support the decision making process will be provided as requested RJC will be available to discuss with the Utility Board and City management activities at PUC and the ISO as requested from time to time by Staff As directed by Staff, RJC will coordinate and support other consultants, attorneys, and lobbyists used by the City in order to insure coordination of planning and other activities Task F 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 4 Workpapers will be developed to support the analysis and will be provided to City upon request 4of5 5 Presentations to Staff will be made as appropriate to discuss results of analyses and recommended strategies based on the results Budget The budget for the above scope of services for labor and expenses is difficult to estimate due to the fact that the implementation nilemaking proceedings are lust beginning There are 36 PUC projects that have been identified to implement retail competition, and numerous ERCOT committees working to address the details of how retail access will work Costs for RJC labor and expenses under the Task Order will be shared with the Cities of Garland and Greenville based on percent splits as approved by the three Cities RJC recommends a budget of $100,000 for labor and expenses be approved 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 thisq ill day of 199y AUTHORIZED BY CITY `/ By /� Dated ATTEST JENNIFER WALTERS CITY SECRETARY ACCEPTED BY R J COVINGTON CONSULTING I APPROVED AS TO LEGAL FORM HERBERT L PROUTY CITY ATTORNEY By By ! U ed0/Dated 04V I%� I ��� 5of5 1 //F/ . )% AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY MANAGER TO EXECUTE A THIRD AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT FOR CONSULTING SERVICES PREVIOUSLY ENTERED INTO BY THE CITY AND R J COVINGTON CONSULTING ON JANUARY 5, 1999, AND AS PREVIOUSLY AMENDED BY FIRST AMENDMENT THERETO ON JUNE 1, 1999, AND AS PREVIOUSLY AMENDED BY SECOND AMENDMENT THERETO ON OCTOBER 19, 1999, AND AS AMENDED FOR A THIRD TIME BY ADDING TASK ORDER NO 00-B THERETO, WHICH THIRD AMENDMENT PROVIDES FOR ADDITIONAL ELECTRIC INDUSTRY PROFESSIONAL CONSULTING SERVICES RELATING TO RESTRUCTURING IMPLEMENTATION, TO BE PERFORMED FOR DENTON MUNICIPAL ELECTRIC, AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, AND PROVIDING AN EFFECTIVE DATE THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION 1 That the City Manager is hereby authorized to execute a Third Amendment to the "Professional Services Agreement For Consulting Services Relating to the Denton Municipal Electric Utility" (the "Agreement"), heretofore entered into by and between the City of Denton, Texas and R J Covington Consulting, Austin, Texas on the 5`h day of January, 1999, (which Agreement was approved by the Council in Ordinance No £99-011, enacted on January 5, 1999), providing for professional consulting services in the area of electric restructuring and the potential divestiture of all or a part of the City's electric system, all as set forth in Task Order No 99-A, and which Agreement was thereafter first amended to provide for additional professional consulting services in the area of electric restructuring as set forth in Task Order No, 99-B, which First Amendment to the Agreement was approved by the Council in Ordinance No 99-187, enacted on June 1, 1999, and which Agreement was thereafter further amended for a second time to provide for additional professional consulting services in the area of potential electric divestiture and restructuring as set forth in Task Order No 99-C, wluch Second Amendment to the Agreement was approved by the Council in Ordinance No 99-388, enacted on October 19, 1999 SECTION 2 That the Agreement is now being amended for a third time to provide for additional professional consulting services in the area of implementation of electric restructuring as set forth more particularly in Task Order No 00-B, a copy of which Task Order is attached hereto and incorporated herewith by reference, and which Task Order constitutes the third amendment document and provides that R J Covington Consulting shall perform additional regulatory, technical, and related electric industry professional consulting services supporting the City and Denton Municipal Electric, and which Task Order provides for the payment by the City of additional fees and expenses in an amount not to exceed $ 100,000 00 respecting the additional services to be performed by R J Covington Consulting pursuant to said Task Order No 00-B SECTION 3 That the award of this Agreement by the City is on the basis of the demonstrated competence, knowledge, and qualifications of R J Covington Consulting and the ability of R J Covington Consulting to perform the services needed by the City for a fair and reasonable price, all in accordance with the provisions of Chapter 2254 of the Texas Government Code, known as the "Professional Services Procurement Act " SECTION 4 That the expenditure of funds as provided for in the attached Third Amendment to Agreement, in the form of, and pursuant to Task Order No 00-B, is hereby authorized SECTION 5 This ordinance shall become effective immediately upon its passage and approval PASSED AND APPROVED this the Ji` � day of S'e o g/?ji e/ 2000 EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY By J)JzZ64-4 APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY BY J S \Our Documents\0rdmanees\00\R 1 Covington - 3rd Amended PSA TO 400 B DME ord doe THIRD AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT DATED JANUARY 5,1999 BETWEEN THE CITY OF DENTON AND R J COVINGTON CONSULTING TASK ORDER NO 00-B Restructuring Implementation Services Tasks provided for in this Third Amendment are directed at continuing assistance to City staff (Staff) in participation at the Public Utility Commission of Texas (PUC) and at the Electric Reliability Council of Texas (ERCOT) on issues affecting the City The PUC identified 36 projects for developing the rules and policies that will shape the electric industry as retail access is implemented on January 1, 2002 New projects are being added as new issues develop These projects will either directly affect the City's municipal electric system, or by shaping and defining the competition, indirectly affect the way the Citywill conduct its electric business This, in turn, will affect the level which the electric system can contribute to the funding of City operations The developmental stage of industry restructuring is nearing completion and the implementation phase is beginning Implementation requires coordination of policies and rules being developed through PUC Projects leading to Rulemakmgs and ERCOT ISO working groups The rules, policies, procedures and systems are to be in place by June 1, 2001, the start of the customer choice pilot program This means there continues to be multiple PUC projects and rulemakmgs , as well as, multiple ERCOT groups working on implementation issues that will affect the City's electric system Some of the key issues presently being addressed that directly affect the City include • How will units be designated as must -run units and how will they be compensated? This is a particularly critical issue as the City looks at making investments to meet the State Implementation Plan (SIP) The outcome of this and similar issues could affect the value of the City's generation in the current sale of the assets • How will the City structure itself to meet it load serving obligations? • Will the City act as a Qualified Scheduling Entity or choose another to act in that capacity for the City? • How will those obligations differ if the City decides to "opt -in" to customer choice? • Should the City opt-m and when? • What type of settlement procedures will the City need in the restructured market? • How will the City be affected by the Non -IOU Code of Conduct being developed at the PUC? • Will the protocols being developed for the ISO retain the benefits on the issues the City has worked to aclueve in the working committees, such as dynamic scheduling Task Order No 00-B Restructuring Implementation Services for Gibbons Creek, restricting allocation to opt -out utilities of Unaccounted For Energy to zero except for transmission related actual losses, self provision of ancillary services, recognition of the difference between municipalities and cooperatives and IOUs? • How will settlement work to track and reconcile costs and how will municipalities fit into that process? • What will be the cash flow impacts of weekly settlements and payments to the ISO? Some of the issues that are currently being addressed that will indirectly affect the City are • How will the IOU's be unbundled into separate business uruts? • What services will the unbundled entities offer, when, where and how much? • How will the capacity auction be implemented and how will it affect power costs? • How will reliability factors affecting the DFW area be addressed? • How will moving from multiple control areas to a single control area affect the City? RJC's role will be that of Staff liaison to the PUC to keep Staff informed on activities, work with Staff in developing positions on issues, assist Staff in responding to issues that affect City and provide technical support for Staff and City's legal experts on regulatory issues RJC will supplement Staff on ERCOT activities to keep Staff informed of operational procedures that will affect the City's electric system and assist Staff in supporting positions before ERCOT management and standing committees as requested RJC 's activities will include, 1) attendmg workshops hosted by the PUC and ERCOT ISO, 2) participating on relevant PUC and ISO committees and panels to discuss issues and work with Staff to ensure the City's interests are represented in the workshops, rulemakmgs, and committee meetings, 3) analyzing proposed rules filed by PUC and policies presented by the ISO, 4) preparation of comments to be filed at the PUC to present the City's position on issues, 5) analyzing comments filed by other parties on issues affecting City, 6) working with City Staff and legal team to develop responses to positions taken by other parties adverse to the City/s positions, 7) providing technical support to Staff and the City's legal team on issues before the PUC and the ISO, and, 8) maintaining information on activities at the PUC, ERCOT ISO and the Legislature that supports effective representation on issues in these and related proceedings associated with restructuring in Texas 2of5 Task Order No 00-B Restructuring Implementation Services Scope of Services Task {1 PUC And ERCOT Workshops and Committees 1 RJC will stay informed on activities at PUC and ISO and will attend PUC and ERCOT workshops and committees as needed 2 When appropriate, RJC will participate in the committees and workshops to represent interest of City based on directions of Staff 3 Reports will be provided to Staff detailing issues addressed and positions taken by parties 4 RJC will discuss with Staff positions which should be taken and strategies for working with parties involved 5 RJC will coordination coverage with Staff and other parties with similar interest to maintain effective coverage on the numerous issues affecting the City Task B Evaluate Proposed Implementation Rules and Policies 1 The new rules being proposed by the PUC to implement restructuring will be evaluated as to their effect on the City 2 When requested by Staff, RJC will develop spreadsheet models and perform other analysis as required to evaluate the economic impact of proposed rules on the City 3 RJC will discuss proposed new rules and changes to existing rules with Staff, helping to identify areas of concern and preparing positions on rules 4 When necessary, RJC will meet with PUC staff to discuss issues of particular concern to the City, particularly where the stakeholder process at ERCOT fails to recognize significant adverse impacts on the City from policies and rules being adopted Task C Preparation of Comments 1 RJC will prepare or assist in preparing comments to be filed with PUC representing City's position on issues brought up in proposed rules and in the ERCOT Certification process 2 These comments will be coordinated through Staff and the City's legal team 3 RJC will assist the City�s legal team as necessary in the preparation of and filing of comments and letters to the PUC, the ISO and to the Legislature Task ID Coordination of Work Effort 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 proposals and evaluate potential effects on City operations 3of5 Task Order No 00-B Restructuring Implementation Services Information necessary to supplement and support the decision making process will be provided as requested RJC will be available to discuss with the Utility Board and City management to discuss activities at the PUC and the ISO as requested from time to time by Staff As directed by Staff, RJC will coordinate and support other consultants, attorneys, and lobbyists used by the City in order to insure coordination of planning and other activities Task E Technical Slpyort For Implementation Phase 1 RJC will provide technical support to the City s legal team to assist in the evaluation of rules, policies and procedures being adopted by the PUC and the ISO 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 The evaluations and planning process assistance shall include such issues as how restructuring is affecting power costs, what activities the City needs to be looking at to prepares for the Implementation Date, how will the competitive changes be affecting the City's ability to retain and attract customers in the future 4 RJC will evaluate scenarios and proposals from perspective of City utility and as a member of TMPA 5 Presentations to Staff will be made as appropriate to discuss results of analyses and recommended strategies based on the results Budget The budget for the above scope of services for labor and expenses is difficult to estimate due to the fact that the policy development and implementation phases are lust beginning Based on prior experience in working with these issues, RJC recommends a budget of $100,000 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 1909 EXECUTED this 5 day of i & m f - AUTHORIZED BY 0 MR)MMKOWEN ACCEPTED BY R J COVINGTON CONSULTING By 6e�z �154— Dated 4of5 ATTEST CITY SECRETARY Task Order No 00-B Restructuring Implementation Services APPROVED AS TO LEGAL FORM HERBERT L PROUTY 5of5