1998-229F \shared\dept~L\Our Documonts\Ordmences~9 S~nended R.I Ordmanoe doc
NO
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 RELATING TO DENTON
MUNICIpAL ELECTRIC WITH R J COVINGTON CONSULTING FOR PROFESSIONAL
SERVICES PERTAINING TO ELECTRIC RESTRUCTURING AND ASSISTANCE AND
SUPPOPdr OF CITY STAFF RESPECTING PUBLIC UTILITY COMlVI[SSION OF TEXAS
PROJECT NO 18703, AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, AND
PROVIDiNG AN EFFECTIVE DATE
WHEREAS, on the 16th day of February, 1998 the C~ty entered rote a "Professmnal
Services Agreement For Consulting Serwces Relating To The Denton Mumc~pal Electric
Utility (~ Agreement ) w~th R J Covington Consultang ( Cowngton ), and on the 28 day of
April, 1998, the City and Covington entered ~nto a F~rst Amendment to smd Agreement, ~n both
of which Agreements Cowngton agreed to perform professional and consulting serwces
pertmnmg to electnc utility restructunng, and
WHEREAS, several events have occurred before the Pubhc Utfimes Comm~ssmn of
Texas, namely ~n Project No 18703, and other related Projects s~nce the C~ty entered ~mo the
above Agreement and the F~rst Amendment to Agreement, wMch ~mpact upon the pos~Uon of the
City's Mumc~pal Electric Utility as ~t approaches the upcoming Texas Legislative Sessmn, and
which urgently reqmres that Denton obtmn addmonal professional and consulting serwces m
order to protect ~ts pos~t~on and advance ~ts ~nterests, and
WHEREAS, ~t appears to the Council that ~t ~s m the best interest of the C~ty to obtmn
such add~tmnal professional and consulting services by entering ~mo a Second Amended
Agreement w~th Covington NOW THEREFOR,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
~ That the C~ty Manager ~s hereby authorized to execute the Second
Amendntent To Professional Services Agreement For Consulting Serwces Relating To The
Denton Mumc~pal Electric Utd~ty (the "Second Amended Agreement") w~th R J Covington
Consulting for the prov~s~on of addmonal professmnal and consulting serwces related to electric
restructunng and deregulatmn, and related to PUC Project No 18703, a copy of which Second
Amende~ Agreement ~s attached hereto and ~ncorporated herewnh by reference, along w~th any
Task Orders and other documents necessary m the performance of the Second Amended
Agreement
SECTION II. That the expenditure of funds as prowded m the attached Second
Amended Agreement ~s hereby authorized
SECTION III That th~s ordinance shall become effective ~mmedmtely upon ~ts passage
and approval
PASSED AND APPROVED thls the ~_~day of ~ 1998
J AC~L~R, ~v~Y ~)R
ATTEST
JENNIFER WALTERS, CITY SECRETARY
HERBERT L PROUTY, CITY ATTORNEY
STATE OF TEXAS §
COUNTY OF DENTON §
SECOND AMENDMENT TO PROFESSIONAL SERVICES
AGREEMENT FOR CONSULTING SERVICES
RELATING TO DENTON MUNICIPAL ELECTRIC
THIS SECOND AMENDMENT, to the Professional Services Agreement For Consulting
Services Relatang To The Denton Municipal Electric Utlhty, entered into on the 16t~ day of
February, 1998, by and between R J Covington Consulting, a sole proprietorship, with its
principal offices at 13276 Research Boulevard, Suite 204, Austin, Texas 78750 ("Covington"),
and the C~ty of Denton, Texas, a Texas Municipal Corporation, with 1ts principal offices at 215
E McKlnney, Denton, Texas 76201 ("C~ty") for professional and related consulting services
prowded to the City, which Agreement ~s hereinafter referred to as the "Base Agreement", smd
Base Agreement was heretofore amended by First Amendment, entered into on the 28th day of
April, 1998, by and between Covington and the City, which Agreement ~s hereinafter referred to
as the "First Amended Agreement"
In conslderataon of the mutual promises of the partaes, the terms and condmons set forth
herein, and for other good and valuable considerations expressed hereto, the parties hereby
AGREE to amend the sa~d Base Agreement and First Amended Agreement as follows
I
That Article II "Scope of Services" of the Base Agreement and the First Amended
Agreement as hereby amended by adding the following additional provision
II,E Covington shall provide to the City those services set forth in Task Order No 98-
D (Tasks A,B,C,D,E, and F)
II
That Article III "Period of Service" of the Base Agreement and the First Amended
Agreement ~s hereby amended by adding the following additional provision
As to the period of service respecting the completion of Task Order 98-D, the term of this
Agreement shall be from July l, 1998 to June 30, 1999
III
That Article IV B 1 "Compensat~on/Bflhng and Payment" of the Base Agreement and
the First Amended Agreement Is hereby amended by adding the following additional provision
Second Amendment To Professional Services - Page I
With respect to the additional professional services to be performed by Covington
pursuant to Task Order 98-D, the C~ty agrees to pay Covington, a further professional fee,
including reimbursement for direct non-labor expense, not to exceed $100,000 00
IV
That Article XIV "Entire Agreement' of the Base Agreement and the First Amended
Agreement is hereby amended to replace the entire paragraph contmned ~n Article XIV With the
following language, to wit
This Agreement, consisting of mne (9) pages, plus Exhibit "A" (Fees For Servaces), Task
Order No, 98-B, Task Order No 98-C, and Task Order No 98-D, whmh Exhibit "A" and Task
Orders are mcorporated by reference herewith, conmtutes the complete and final expression of
the Agreement of the parties and ~s ~ntended as a complete and exclusive statement of the terms
of their Agreement and supersedes all prior contemporaneous offers, promises, representations,
negotiations, d~scuss~ons, commumcatlons and agreements which may have been made in
connection with the subject matter hereof
V
IN WITNESS WHEREOF, the City of Denton, Texas has caused this Second Amended
Agreement to be executed m duphcate original counterparts, by ~ts duly-authorized City
Manager, and Cowngto~. has execu~d this Agreement by its duly-authorized Owner and
Proprietor on th~s the ~ day of ~~_~, 1998
"CITY"
CITY OF DENTON, TEXAS
Ted Benawdes, City Manager
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPR~VED ~
AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
Second Amendment To Professional Serwces - Page 2
"COVINGTON"
R J COVINGTON CONSULTING
Owner & Proprietor
ATTEST
By
F \shared\dept\LOL\Our Documents\Contracts\98\SecondAmended Cowngton doc
Second Amendment To Professional Services - Page 3
AMENDMENT TO
PROFESSIONAL SERVICES AGREEMENT
DATED FEBRUARY 16, 1998
BETWEEN THE CITY OF DENTON AND
R J COVINGTON CONSULTING
TASK ORDER NO 98-D
This Task Order sets forth specific services to be provided by R J Covington Consulting
(RJC) and amends Article IV, B, ! of the Professional Services Agreement Tasks
provided for in t?us Amendment are directed at assisting the City staff (Staff) in
participation at the Public Utility Commission of Texas (PUC) on issues affecting the
City The PUC has identified ProJect 3.7555 - Invest~gatwn Into the Competitweness of the
Wholesale Market and Docket 18703 - Review of Transmisswn Access Rules, PUC Subst Rule
23 67 and 23 70 to address a number of issues related to restructuring of the electric
industry in Texas PUC staff has recommended the following categories of actions in
order to accelerate the pace at wl-uch the wholesale market Is developing This includes,
1 ) PUC Rulemakang, 2 ) Other PUC Activities, and 3 ) ISO Activities The PUC has
projected a schedule for these activities to cover from July 1998 through December 1998
These proceedings will overlap other Dockets Because Docket 18703 is the transmission
open access rule, it essentially opens the entire rules 23 67 and 23 70 for discussion For
example the Commission has also cited an interest in re-working the transmission
pricing structure (VAMM and Postage Stamp), including the transition mechanism
issue The frequency of TCOS updates, whether to update billing units and other TCOS
issues are also up for review The rules for governing must-run units (Project 14789) Is
being reviewed and will likely be addressed further in the discussion on ancillary
services in Docket 18703
RJC'$ work will therefore focus on these proceedings, and related proceedings as they
evolve, to address restructuring issues RJC's role will be that of Staff liaison to 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's activities will include,
1 attending workshops hosted by PUC and ISO,
2 participating on relevant PUC and ISO committees to discuss and debate issues,
3 analyzing proposed rules filed by PUC and policies presented by 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,
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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,
8 ) mamtaimng information on actiwtles at the PUC, ERCOT ISO and the Legislature
that supports effective representation on issues m these and related proceedings
associated with restructuring in Texas
Scope of Services
Task A Attending Workshops At PUC And ISO
1 RJC will stay informed on activities at PUC and ISO and will attend workshops as
needed
2 When appropriate, RJC w~ll participate in 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 at workshops
Task B Paxhctpahon On Comnuttees
I RJC will parbcipate on working committees as approved by Staff in order to m/luence
issues and solubons brought forward for discussion to larger groups
2 Staff will be kept informed of issues being addressed m committees and positions of
panes
3 RJC will discuss with Staff posibons which should be taken and strategies for workang
with parties involved
Task C Analyze Proposed Rules and Pohc~es
The 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 changes to existing rules with Staff, helping to
identify areas of concern and prepanng poslt~ons on rules that represent interests of
C~ty
3 RJC will meet with PUC staff as appropriate to discuss the proposed rules and present
the City's concerns regarding PUC staff proposals
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Task D Preparation of Comments
1 RJC will prepare or assist in preparing comments to be filed with PUC represenhng
City's poslbon 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
1 RJC will have continuing commurucat~on with Staff and the City's legal team in order
to momtor proposed industry changes and address those issues affecting
mumclpahties
2 An on-going dialog will be maintained with Staff and the legal team in order to
evaluate changing proposals and evaluate potenhal effects on City operations
3 Informabon necessary to supplement and support the decision makang process will be
provided as requested
4 RJC will be available to discuss with the Utility Board and City management activities
at PUC and the ISO as requested from t~me to hme by Staff
5 As directed by Staff, RJC will coordinate and support other consultants, attorneys, and
lobbyists used by the City m order to insure coordlnabon of planmng and other
act~vlhes
Task F Techrucal 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 evalua0.ons 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
5 Presentations to Staff will be made as appropriate to discuss results of analyses and
recommended strategies based on the results
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Budget
The budget for the above scope of services for labor and expenses is d~fflcult to estimate
due to the fact that the actual rulemakmg proceedings are just beglnmng However,
because of the wide range of issues to be addressed, the significant impact these issues
will have on utihlaes m Texas, and the limited time allowed for parties to address these
issues, it is expected that an intense effort will be required for the next six months
Based on prior experience in working with these issues, 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 tt-u~h/~day of ~ 199~
AUTHORIZED BY ACCEPTED BY
CITY OF DENTON, TEXAS R J COVINGTON CONSULTING
ATTEST APPROVED AS TO LEGAL FORM
JENNIFER WALTERS HERBERT L PROUTY
CITY SECRETARY CITY ATTORNEY
O
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