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1996-276J \WPDOCS\ORD\RMIAMEND ORD ORD H C..0. AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A FIRST AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH RESOURCE MANAGEMENT INTERNATIONAL ("RMI"); AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; 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 the first amendment to the professional services agreement with Resource Management International ("RMI"), a copy of which is attached hereto and incorporated herein, along with any task orders and other documents necessary to the performance of the first amendment. SECTION II. That the expenditure of funds as provided in the attached agreement is hereby authorized. SECTION III. That this ordinance shall become effective immedIately upon its passage and approval. PASSED AND APPROVED this the~ day of~_.~,~. 1996 ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM. HERBERT L PROUTY, CITY ATTORNEY STATE OF TEXAS § COUNTY OF DENTON § FIRST AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT This first amendment to the Professional Services Agreement entered into on the 17th day of September, 1996 by and between Resource Management International, Inc , a California corporation ("RMI") and the City of Denton, Texas, a Texas municipal corporation with its principal offices at 215 East McKlnney, Denton, Texas ("City") for professional and related services provided to the city, hereinafter referred to as "Base Agreement" In consideration for the terms and conditions set forth herein, the parties hereby agree I That Section I "Scope of Services" of the Base Agreement is hereby amended to read as follows RMI shall provide to the City the services set forth in individual task orders made as attachments to this Agreement including without limitation, Task Orders No 96A and 96B II That Section II "Fees for Services" of the Base Agreement is hereby amended to read as follows For services provided by RMI to City pursuant to this Agreement, the City shall pay RMI in accordance with the rates and charges set forth ~n Exhibit A "Fees for Services," attached hereto and made a part of this Agreement for all purposes provided, however, such charges and rates shall not exceed $80,000 unless the City agrees by an amendment to this Agreement to increase the maximum fee for services III That save and except as amended hereby, all the terms, conditions, clauses, and sentences of the Base Agreement shall remain in full force and effect The signatories hereto represent that they are authorized to enter into this Agreement on behalf of the party for whom they sign CITY OF DENTON, TEXAS RESOURCE MANAGEMENT INT , INC HERBERT L PROUTY, CITY ATTORNEY PAGE 2 Date December 3, 1996 CITY COUNCIL AGENDA ITEM TO' MAYOR AND MEMBERS OF THE CITY COUNCIL FROM. Ted Benevldes, City Manager SUBJECT: POWER SUPPLY OPTION STUDY RECOMMENDATION: The Electric Utility staff and the Pubhc Utility Board recommends that the City Manager be authorized to hire RMI to develop, Issue and coordinate analysis of an RFP for power supply options for Denton SUMMARY: Denton is forecast to require additional electric generating capacity m the near future In addition, the power supply market is changing rapidly as a result of market deregulation In order to make strategic decisions regarding the future of power production and purchase by the electric utility, the options available must be defined In this rapidly changing market, the only way to define the options that are available is to allow the competitive market place to respond to an RFP The attached task order dehnes an RFP process that will encourage consideration of all available options The lmtlal task of this effort will consist of a review of the existing load forecast, development of the RFP, issuance of the RFP, and initial screening of all proposals received The final task ~n this process will be an m depth analysis and negotiation of the f~nahst proposals RMI was selected to perform this task because of their familiarity with Denton's existing resource situat~on, the data base and production cost model development of the Denton system they have already completed, and their experience m performing this type of activity for other pubhc utilities FISCAL IMPACT: The cost of the ~mtlal task for th~s power supply optmn study is $55,000 A budget for the m depth rewew of fmahst proposals will be developed upon completmn of the ~mt~al task Respectfully submated, R E Nelson Executive Director Utlhtles Prepared by Sharon Mays Director of Electric Utlht~es ATTACHMENT TO PROFESSIONAL SERVICES AGREEMENT BETWEEN RESOURCE MANAGEMENT INTERNATIONAL, INC AND THE CITY OF DENTON TASK ORDER NO 96B EVALUATION OF POWER SUPPLY ALTERNATIVES Serwces provaded under flus Task Order wall assist the City of Denton (City) in evaluahng the Clty'S options for power supply Resource Management International, Inc (RMI) will assist m 1) development of the Request for Proposals (RFP) document, 2) faclhtat~ng the RFP and commumcatmg the C, ty's des, re to consider a broad range of power supply ophons, and, 3) evaluation of proposals The work actavlty ldentafied m tlus Task Order w,ll mclude a detailed review and rankmg of a select number of proposals The work ac°av]ty of RMI will include faclhtatlng responses to the City's Request For Proposals that will include a broad-based conslderataon of supply ophons The intent will be to encourage both tracht~onal and innovative solutaons to reducmg the City's power costs RMI will ma,ntam contact with the proposers and encourage through d, scusslons creative approaches that consider not only Denton's incremental power needs, but also potentaal options to lower the C,ty's overall power costs through alternative uses of eyastlng generataon R.MI w,ll malnta,n a Ingh degree of on-going commurucataon with ut~ty staff during the evaluation process RMI will conclude the work activity ,n the Task Order with a recommendahon of the best opt,on/options for the City to consider for further negohataons Task A Review of Load Forecast RMI will review the C,ty's Load Forecast and make recommendations where appropriate · A data request will be prepared requeshng supporting data for the forecast (It is assumed the City will be able to provide most of that information on disk) · Variables will be exarmned for outhers and consistency between lustorlc and forecasted data points · The models and the stat~stacs for those models will be reviewed · Staff will be lnterv,ewed through a conference call to d,scuss procedures used ,n developing ~ustonc and forecasted ,ndependent var,ables · A letter report will be written to present findings and to make recommendations regarding the use of the forecast for plamung purposes Task B Review of Request For Proposal RMI will work with the City in preparing the RFP for power supply to the City · RMI will work with City staff to develop a RFP that will encourage respondents to provide proposals that consider the City's overall power requirements Not only should respondents look at power supply options that meets the City's incremental power needs, but the City will also consider power options that may exceed the incremental power reqturements of the City The RFP should be structured to allow such consideration wlule maintaining sufficient deflrut~on and parameters to allow a comparative evaluatton of the submittals Alternatives wfuch may be considered include traditional blocks of purchased power economy energy purchases lease arrangements entering into operating agreement to run c~ty generation support of cogeneration projects repowermg of existing City units poohng arrangements partnering with customers on generation prolects new customer alhances mcludlng demand-side management mlttatives full requirements supply incorporating credit for exmhng C~ty resources others as proposed · The RFP w~ll be comprehensive It ~ include sufficient information regarding City operations to allow development of detailed proposals Staff will be instrumental m providing the mformat~on to RMI Discussions with staff throughout development of RFP will be held to evaluate handlmg of confidential information · Respondents will be encouraged to make innovative use of the City's exlstmg generation to arrive at a low cost, efhcient and reliable solution to the City's power needs · A comprehensive description of the City's existing resources and future projected power reqmrements will be provided to allow proposers effective consideration of the range of potential supply arrangements · The format of proposal responses will be structured to allow for effective comparison of proposals 2 Task C RFP Process The RFP will be ~ssued by RMI to a wide group of pubhc power and investor-owned uhht~es, river authorities, power marketers and power developers Included in RMI's work actavlty will be · Identffacation of entat~es to be included on mailing hst for RFP · Preparation of advertisement language and identification of pubhcations to inform the public of the City's RFP · Dlstributaon of the RFPs to mmhng hst and m response to requests from advertisements · Planning for and chrectmg a pre-proposal meetang to allow for better understanding of City's requirements and existing resources, pre-proposal meeting activity might include tour of City's Spencer Power Plant · Responding to proposers' questions regarding RFP Task D Evaluation of Proposals RMI will prepare a multi-step review of proposals Proposal review activities w~ll be conducted to focus the majonty of review effort on most desirable proposals Following receipt of proposals, each proposal will be reviewed and clarificat~on of proposal language requested before comparative revzew is nutiated The evaluataon will ut~hze a total system approach which judges the benefits of the proposal consldermg the City's involvement in TMPA and TMPP The following actavlhes will be completed Phase I - Imt~al $creemng · RMYs lmtial rewew will include a screemng to identify the most advantageous proposals The screemng criteria will include economic terms of power supply options financial strength of proposers experience w~th power supply in ERCOT Consideration of whether proposal is feasible within given timeframe and other constraints · Results of mtttal rex, mw will be summarized and reviewed w~th City staff to estabhsh proposers to receive more m-depth review 3 Phase II - In-depth Review · In-depth review will include discussion of proposal with proposer to assure proper understanding of proposal terms evaluation of economic terms over period of proposed supply period to mclude estimate of net present value of power supply ophon(s) coordmahon of cost and responslblhty for ancillary services and transmission associated with delivery of power supply identification and valuation of proposers' commitment to reduce City's responsibility to assume cost variation risks PROSYM computer modelmg to be used to dispatch resources into City's resource mix as stand alone system and as TMPP member to evaluate total cost benefits of proposal Task E Presentahon of Results RMI will prepare a report summarizing findings and presenting recommendations to staff and to the Uhhty Board · Results of m-depth proposal rewews will be summarized and presented to C~ty staff A meeting will be held to discuss results of proposal review and answer City staff queshons · A final report will be prepared to present the results and recommendahons from the RFP evaluation process · Another meeting will be held w~th the Utility Board to present the results of the evaluation and recommendations 4 Development of an accurate project budget to complete these Tasks is difficult due to the breadth of proposal options to be considered and the fact that the number and complexity of proposals submitted are unknown Preliminary budget projectaons are offered for portions of the work A budget of $55,000 m suggested for Tasks A through C, Phase ! of Task D, and Task E The budget to complete in-depth proposal reviews will be very dependent upon the number of proposals rewewed and the complexity of the proposal evaluation (Expenses for detailed proposal reviews may be supported partially or fully by the proposers ) The work effort to prepare the m- depth revaew actlv,ttes outlined in Phase II of Task D are projected to range from $7,000 to $10,000 per proposal These estimates do not include engineering feasibility analysis of projects A budget to complete the detailed proposal rev,ewe m Phase II of Task D will be established following ldenttficatton of what proposals will be included m ttus review TI-us budget as established may be evaluated at anytame by RMI or the City RMI will bill monthly and will not exceed the author, zed budget without approval from the City Ttus Task Order ~s authorized and made an attachment to the above identified Professional Services Agreement through the signatures below Authorized by Accepted by City of Denton, Texa~ /~ Resource M~anagement International, Inc Bob Nelson, Executive Dxrector ~ Dated ///~//~d~ Dated ~x3 C~ I ~~O~ BY Sh~, ~~rector Dated ,~/0~f/~ ~ Ted Benavxdes, Cxty Manager Dated ATTACHMENT TO PROFESSIONAL SERVICES AGREEMENT BETWEEN RESOURCE MANAGEMENT INTERNATIONAL, INC AND THE CITY OF DENTON TASK ORDER NO 96B EVALUATION OF POWER SUPPLY ALTERNATIVES Serwces prowded under tlus Task Order will assist the City of Denton (City) in evaluahng the city's options for power supply Resource Management Internahonal, Inc (RMI) will assist m 1) development of the Request for Proposals (RFP) document, 2) facilitating the RFP and communicating the City's desire to consider a broad range of power supply options, and, 3) evaluation of proposals The work actavity identified m this Task Order will include a detailed review and rankmg of a select number of proposals The work aciavaty of RMI will include faclhtatmg responses to the City's Request For Proposals that will include a broad-based considerat~on of supply options The mtent will be to encourage both tradltaonal and innovative solutaons to reducing the City's power costs R_MI will maintain contact with the proposers and encourage through discussions creahve approaches that consider not only Denton's mcremental power needs, but also poteniaal ophons to lower the City's overall power costs through alternative uses of existing generataon RMI will maintain a lugh degree of on-going commumcatlon with ut~hty staff during the evaluation process RMI will conclude the work achvity in the Task Order with a recommendation of the best option/options for the City to consider for further negohataons Task A Review of Load Forecast RMI will review the City's Load Forecast and make recommendations where appropriate · A data request will be prepared requesting supporting data for the forecast (It is assumed the City will be able to provide most of that mformahon on disk) · Variables will be examined for outhers and consistency between tustonc and forecasted data points · The models and the statlstacs for those models will be reviewed · Staff will be interviewed through a conference call to discuss procedures used m developmg historic and forecasted independent variables · A letter report will be written to present findings and to make recommendatmns regarding the use of the forecast for planmng purposes Task B Review of Request For Proposal RMI will work with the City m preparing the RFP for power supply to the City · RMI will work with City staff to develop a RFP that will encourage respondents to provide proposals that consider the City's overall power requirements Not only should respondents look at power supply options that meets the City's incremental power needs, but the City will also consider power options that may exceed the incremental power reqturements of the City The RFP should be structured to allow such consideration wtule maintaining sufficient defiruhon and parameters to allow a comparative evaluation of the submittals Alternatives which may be considered mclude traditional blocks of purchased power economy energy purchases lease arrangements entering into operating agreement to run city generation support of cogeneratlon projects repowermg of exmting City umts pooling arrangements partnering with customers on generation projects new customer alliances mcludmg demand-side management lmhahves full requirements supply incorporating credit for existing City resources others as proposed · The RFP wdl be comprehensive It wrll include sufficient information regarding City operations to allow development of detailed proposals Staff will be instrumental in prowdmg the mformat~on to RM! Discussions with staff throughout development of RFP will be held to evaluate handling of confidential lnformahon · Respondents will be encouraged to make lrmovative use of the C~ty's existing generation to arrive at a low cost, efficient and reliable solution to the City's power needs · A comprehensive description of the City's existing resources and future projected power requirements will be provided to allow proposers effective consideration of the range of potential supply arrangements · The format of proposal responses wdl be structured to allow for effective comparison of proposals 2 Task C RFP Process The RFP will be issued by RMI to a xande group of pubhc power and investor-owned ut~htaes, river authonttes, power marketers and power developers Included in RMI's work activity will be · Identaficat~on of entlhes to be included on mailing list for RFP · Preparation of advertasement language and ldenhficat~on of pubhcat~ons to inform the public of the C~ty's RFP · Distribution of the RFPs to mailing list and m response to requests from advertisements · Planning for and chrectmg a pre-proposal meeting to allow for better understanding of City's requirements and existing resources, pre-proposal meeting activity might include tour of Caty's Spencer Power Plant · Respondmg to proposers' questions regarding RFP Task D Evaluahon of Proposals RMI will prepare a mulia-step revmw of proposals Proposal review activities will be conducted to focus the majority of rexaew effort on most destrable proposals Following receipt of proposals, each proposal will be reviewed and clar~hcatlon of proposal language requested before comparatave review is nuttated The evaluahon will ut~hze a total system approach which judges the benefits of the proposal conmdermg the City's mvolvement in TMPA and TMPP The following achvlhes will be completed Phase I - Intt~al Screening · RMI's uuhal review will include a screemng to ldenhfy the most advantageous proposals The screening criteria will include economic terms of power supply ophons financial strength of proposers experience with power supply in ERCOT Consideration of whether proposal is feasible within given timeframe and other constraints · Results of nut,al rexaew will be summarized and reviewed with City staff to establish proposers to receive more in-depth review 3 Phase II - In-depth Rewew · In-depth review will include discussion of proposal with proposer to assure proper understanding of proposal terms evaluation of economic terms over period of proposed supply period to mclude estimate of net present value of power supply option(s) coordination of cost and responslb~hty for ancillary services and transmission associated with delivery of power supply identification and valuation of proposers' commitment to reduce City's responsibility to assume cost vanahon risks PROSYM computer modeling to be used to dispatch resources into City's resource mix as stand alone system and as TMPP member to evaluate total cost benefits of proposal Task E Presentation of Results RM! will prepare a report summarlz,ng f~ndmgs and presenhng recommendahons to staff and to the Ut~hty Board · Results of m-depth proposal rewews will be summarized and presented to City staff A meeting will be held to discuss results of proposal review and answer City staff questions · A final report will be prepared to present the results and recommendations from the RFP evaluation process · Another meeting w~ll be held with the Ut~hty Board to present the results of the evaluation and recommendations 4 Development of an accurate project budget to complete these Tasks is d,fficult due to the breadth of proposal options to be considered and the fact that the number and complexity of proposals submitted are unknown Preliminary budget projechons are offered for portions of the work A budget of $55,000 is suggested for Tasks A through C, Phase ! of Task D, and Task E The budget to complete m-depth proposal reviews will be very dependent upon the number of proposals revmwed and the compleraty of the proposal evaluatmn (Expenses for detailed proposal reviews may be supported parhally or fully by the proposers ) The work effort to prepare the depth rewew act~vitms outlined in Phase II of Task D are projected to range from $7,000 to $10,000 per proposal These estimates do not include englneermg feasibility analysis of projects A budget to complete the detailed proposal reviews m Phase II of Task D will be established following identification of what proposals will be mcluded in ttus review Ttus budget as established may be evaluated at anytime by RMI or the City R.MI will bill monthly and will not exceed the authorized budget without approval from the City Ttus Task Order is authonzed and made an attachment to the above identified Professional Services Agreement through the signatures below Authorized by Accepted by City of Denton, Texas ~ /f Resource Management International, Inc By ~ob Nels~)n, Executxve Dxrector ~ ..~ Dated ////~ ~/~/d Dated ~.~ ~ Q~ [. ~q~ ~<:7 By:~' Ted Benavxdes, Cxty Manager Dated. 5