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