2012-364o�nvaNCE No. 2012-364
AN ORDINANCE APPROVING A"LETTER AMENDMENT TO THE TR.ANSMISSION
OPERATOR CONSULTING SERVICES AGREEMENT DATED JANUARY 1, 2012"
WHEREIN THE CITY OF DENTON, TEXAS IS CONTINUING THE SERVICES OF
GARLAND POWER & LIGHT AS ITS TRANSMISSION OPERATOR; AUTHORIZING THE
EXPENDITURE OF FUNDS THEREFOR; PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Denton, Texas is a Home-Rule City, and operates its municipal
electric utility, Denton Municipal Electric; and in connection therewith it engages in electric
transmission activities, and must qualify with and comply with the applicable rules and
regulations in serving its ratepayers, which transmission activities are regulated by the Texas
Reliability Entity ("TRE"), the Electric Reliability Council of Texas ("ERCOT"), the Public
Utility Commission of Texas ("PUCT"), the North American Reliability Corporation ("NERC"),
and the Federal Energy Regulatory Commission ("FERC"); and
WHEREAS, Denton Municipal Electric is currently continuing to make the transition to
being registered as three different NERC utilities. It is presently registered both as a
"Transmission Planner" and as a"Transmission Owner." However, since DME is operating
transmission assets greater than 100Kv, it must also now qualify to serve as a"Transmission
Operator." Qualification and registration as a"Transmission Operator" is a major step for DME
and is mandatorily required by the regulatory authorities; and
WHEREAS, a requirement of this registration is that one of fourteen (14) existing
ERCOT Transmission Operators must operate DME's transmission assets until the arrival of the
TRE authorities arrive on-site. The TRE authorities have not yet arrived on-site and in order to
comply with the applicable regulations, DME must obtain the services of one of the fourteen
existing ERCOT Transmission Operators to provide services for it to serve as a Transmission
Operator Consultant to DME; and
WHEREAS, the City of Garland is the present Transmission Operator for Texas
Municipal Power Agency, which interconnects with the DME system; Garland in addition,
already has Supervisory Control and Data Acquisition ("SCADA") equipment in place to
monitor these transmission assets; Garland is willing and able to provide the necessary services,
cooperation, supervision and assistance to DME until DME qualifies as a Transmission Operator
and meets TRE established criteria; and
WHEREAS, the Council previously approved by ordinance, the Transmission Operator
Consulting Services Agreement (the "Agreement") in October, 2011, which became effective on
January 1, 2012; now the parties have re-negotiated the agreement and extended the term of the
same in the "Letter Amendment to the Transmission Operator Consulting Services Agreement
(the "Letter Amendment");" and
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WHEREAS, the Council deems that there is a substantial need for the services and it is in
the public interest to enter into this Letter Amendment with the City of Garland, Texas; NOW
THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The above Preamble to this ordinance is hereby incorporated by reference
herewith, as a part of this ordinance for all purposes pertinent.
SECTION 2. The City Manager is hereby authorized to execute and deliver the "Letter
Amendment to the Transmission Operator Consulting Services Agreement" ("Letter
Agreement") which is attached hereto; and which provides for personal services for transmission
operator functions, to be rendered by the City of Garland, Texas for the benefit of the City of
Denton, Texas, in an amount not-to-exceed $180,000.
SECTION 3. The expenditure of funds is hereby authorized in accordance with said
Letter Amendment.
SECTION 4. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the ��'�/( day of ��Q(�/�?�L�// , 2012.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
By:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
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PROPRIETARY AND CONFIDENTIAL
November 19, 2012
Phil Williams, General Manager
Denton Municipal Electric
1569 Spencer Rd.
Denton, Texas 76205
Re: Letter Amendment to the Transmission Operator Consulting Services Agreemenf
dated January 1, 2012
Dear Phil,
Effective January 1, 2013, the City of Denton, Texas, a municipal corporation, operating its
municipally-owned electric utility under the name of "Denton Municipal Electric" (hereafter
"Denton"); and the City of Garland, Texas, a municipal corporation, operating its municipally-
owned electric utility under the name of "Garland Power and Light" (hereafter "Garland") each
agree to amend the "Transmission Operator Consulting Services Agreement" dated January 1,
2012, as follows: -
-Section 3(A) "Cost Reimbursement" shall be amended to read as follows:
(A) Denton agrees to pay Garland as follows:
A monthly fee of $15,000 payable on or before the last day of the inonth for each
month, beginning with January 2013, for a term of one year as amended in Section 5.
Term and Termination (A) herein.
-Section 3(A)(1)(2)(3)(4) "Cost Reiinbursement" shall be deleted entirely and replaced with
Section 3(A), as amended above.
-Section 5. "Term and Termination" shall be amended to read as follows:
(A)This Agreement shall have a term of one year commencing with the Effective Date of
this Ainendment, January 1, 2013.
(B) This Agreement may, at the option of Denton, be renewed for an additional one
year term by providing not less than fifteen days written notice of renewal to Garland
prior to the end of the Amended term stated in Section 5(A).
EXECUTED on the dates indicated below, but deemed to be effective as of the Effective Date
provided above.
"DENTON"
CITY OF DENTON, TEXAS
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ATTEST:
JENNIFER WALTERS, CITY SECRETARY
By:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
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CITY OF GARLAND, TEXAS
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