2007-149FILE REFERENCE FORM 2007-149
X Additional File Exists
Additional File Contains Records Not Public, According to the Public Records Act
Other
FILES liate tnit~ais
First Amendment to Agreement -original is attached 01/09/08 )R
Second Amendment to Agreement -Ordinance No. 2008-170 08/05/08 ) R
ORDINANCE NO. 2007-~~_
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS
AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES
AGREEMENT WITH R. J. COVINGTON CONSULTING, LLC FOR CONSULTING
SERVICES RELATING TO TASK ORDER NO. 07-D PROVIDING FOR CONTINUING
REGULATORY SERVICES AT THE ELECTRIC RELIABILITY COUNCIL OF TEXAS
RELATED TO TRANSITION TO A NODAL MARKET DESIGN IN THE TEXAS
ELECTRIC MARKET; AND TO KEEP DENTON MUNICIPAL ELECTRIC STAFF
INFORMED OF THE STATUS OF THE TRANSITION DESIGN PROCESS AND WILL
ALERT DENTON MUNICI[AL ELECTRIC REGARDING ANY ISSUES THAT MAY
AFFECT THE ABILITY OF DENTON MUNICIPAL ELECTRIC TO SERVCE ITS
CUSTOMERS IN ACOST-EFFECTIVE AND COMPETITIVE MANNER, AND OTHER
RELATED PROFESSIONAL SERVICES; AUTHORIZING THE EXPENDITURE OF FUNDS
THEREFOR; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City Council deems it in the public interest to continue to engage the
firm of R. J. Covington Consulting, LLC of Austin, Texas ("Covington"), to provide further
professional consulting services to the City relating to Task Order No. 07-D; which includes,
without limitation, services at the Electric Reliability Council of Texas ("ERGOT") related to
transition to a nodal market design in the Texas electric market; services to keep Denton
Municipal Electric ("DME") staff informed of the status of the transition design process; and
services that will alert DME staff of any issues that may affect the ability of DME to serve its
customers in acost-effective and competitive manner; and for other professional services; and
WHEREAS, the City staff has reported to the City Council that there is a substantial need
for the above-described specialized professional services, and that limited City staff cannot
adequately perform the services and tasks with its own personnel; and
WHEREAS, Chapter 2254 of the Texas Government Code, known as the "Professional
Services Procurement Act," generally 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, knowledge, and qualifications, and for a fair and reasonable price;
and
WHEREAS, Covington has represented DME continuously and professionally over the
last ten (10) years, and has proven to be a valuable, reliable, affordable, and competent
professional resource that has expertise in, and is well-acquainted with the electric operations as
well as the financial and regulatory framework of Denton Municipal Electric. Covington and his
staff are particulazly familiaz with the characteristics, operations, and present rate structure of
DME Covington's operations aze located in Austin, Texas; 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:
SECTION 1: The City Manager is hereby authorized to execute a Professional Services
Agreement with R. J. Covington Consulting, LLC of Austin, Texas, for professional consulting
services relating to Task Order No. 07-D relating to the City and to Denton Municipal Electric,
in an amount not to exceed $80,000; in substantially the-form of the Professional Services
Agreement that is attached hereto and incorporated herewith by reference as Exhibit "A."
SECTION 2: The award of this Agreement by the City is on the basis of the
demonstrated competence, knowledge, and qualifications of Covington and the ability of
Covington to perform the professional services needed by the City for a fair and reasonable
price.
SECTION 3: The expenditure of funds as provided in the attached Professional Services
Agreement is hereby authorized.
SECTION 4: This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the ~ day of , 2007.
~~~~.~
PERRY cNEILL, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
By:
APPROVED AS TO LEGAL FORM:
EDWIN M. SNYDER, CITY ATTORNEY
By: 4 ,
2
STATE OF TEXAS §
COUNTY OF DENTON §
PROFESSIONAL SERVICES AGREEMENT FOR CONSULTING SERVICES
PERTAINING TO DENTON MUNICIPAL EL/E~jCTRIC
THIS AGREEMENT is made and entered into on the ~ / ~"" day of
2007; but effective from and after June 1, 2007, by and between the City of D ton, exas, a
Municipal Corporation, with its principal office at 215 East McKinney Street, Denton, Texas 7620]
("CITY"); and R. J. COVINGTON CONSULTING, LLC, a Texas Limited Liability Corporation,
with its principal office at ] 1044 Research Boulevard, Suite A-325, Austin; Texas 78759; hereafter
"COVINGTON"; acting herein by and through their duly authorized representatives.
WITNESSETH, that in consideration of the covenants, promises 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 as well as the Task Orders, with diligence and in
accordance with the professional standards customarily obtained for such services in the State of
Texas.
ARTICLE II
SCOPE OF SERVICES
A. COVINGTON shall provide to the CITY professional consulting services pertaining to
assisting Denton Municipal Electric ("DME") in continuing existing monitoring acti~~ties at the
Electric Reliability Council of Texas ("ERGOT"), related to transition to a nodal mazket design in
the Texas electric market. COVINGTON will keep DME staff informed of the status of the
transition design process and will alert DME staff of any issues that may affect the ability of DME
to serve its customers in acost-effective and competitive manner. RJC will also assist DME staff
and legal counsel re interventions made in these proceedings. RJC will also review the future
needs of DME in order to successfully operate in the new market structure being implemented by
ERGOT. The needs assessment includes consideration of how to minimize locational marginal
prices, risk management techniques to minimize exposure to congestion costs, how to maximize the
value of Congestion Revenue Rights ("CRR"), as well as other market activities needed to be
successful in the new nodal market environment. COVINGTON agrees to perform those services
and tasks more particularly and specifically described in Task Order No. 07-D that is attached
hereto and incorporated herewith by reference.
B. To consult with the City Manager, Assistant City Manager/lJtilities, the General Manager of
DME, the Utility Attorney, and any other desi~mated administrative personnel regazding any and all
i
aspects of the services to be performed pursuant to this Agreement.
ARTICLE LlI
PERIOD OF SERVICE
This Agreement shall become effective retroactively on the Is' day of June, 2007 and upon
the issuance of a notice to proceed by Denton Municipal Electric ("DME"). The termination date
of this Agreement shall be upon the earliest to occur of the following events: completion of the
work described herein and in the attached Task Order No. 07-D; or upon the depletion and
exhaustion of the 580,000 not-to-exceed amount provided for herein; or upon fifteen (15) day's
written notice to terminate, issued by the General Manager of DME. This Agreement may be
sooner terminated in accordance with the provisions hereof. Time is of the essence in this
A+~eement. 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 General Manager of DME.
ARTICLE IV
COMPENSATION
A. COMPENSATION TERMS:
"Direct Non-Labor Expense" is defined as that expense for any assignment incurred
hereunder 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 580,000 for those services described in Task Order No. 07-
D.
2. The fee for the services described in this Agreement to be performed by COVINGTON
are to be billed at the rates previously agreed to. Billing shall be reported in minimum one-
quarter (l /4) hour increments.
3. Payments to COVINGTON will be made by the CITY on the basis of detailed monthly
statements rendered to the CITY through its General Manager of DME. The fee bills as
submitted, shall be allowed and approved by the General Manager of DME. 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 Assistant City Manager for Utilities or the
General Manager of DME; or which is not submitted in compliance with the terms of this
z
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 CITY for any charge, expense or reimbursement above the maximum not-to-
exceed fee as stated, without first having obtained written authorization from the CITI'.
C. PAYMENT
If the CITY fails to make payments due COVINGTON for services and expenses within
forty (40) 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 (40th) day, and in addition, COVINGTON may, after giving ten (]0) 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, and the CITY notifies COVINGTON in writing of any
such defect.
ARTICLE V
OBSERVATION AND REVIEW OF THE WORK
COVINGTON will exercise reasonable caze 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, analyses and other data prepared by COVINGTON under this Agreement ("Work
Products") are instruments of service and are and shall remain the property of CITY.
COVINGTON shall have the right to make and retain copies and use all Work Products; pro~~ided,
however, the use shall be limited to the intended use for which the services and Work Products are
provided under this Agreement. COVINGTON may use and may copyright certain non-sensitive
Work Products as property of COVINGTON; provided that prior written approval is obtained from
CITY, whose approval shall not be unreasonably withheld, and providing that copywriting will not
restrict CITY'S right to retain or make copies of the Work Products for its information, reference
and use on the Project or services under the Agreement.
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The Work Products shall not be changed or used for purposes other than those set Forth in this
Agreement without the prior written approval of COVINGTON. If CITY releases the Work
Products to a third party without COVINGTON'S prior written consent, or changes or uses the
Work Products other than as intended hereunder, CITY does so at its sole risk and discretion and
COVINGTON shall not be liable for any claims or damages resulting from or connected with the
release or any third party's use of the Work Products.
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 the
CITY, and including without limitation, damages for bodily and personal injury, death and property
damage, and damage 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 amount of COVINGTON'S insurance coverage 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 party'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 .Sgreement, 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 Carvers
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 5500,000 in the aggregate, and with property
damage limits of not less than 5700,000 for each occurrence, and not less than 5100.000 in
the aggregate.
B. Automobile Liability Insurance with bodily injury limits of not less than 500,000 for each
4
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.
ARTICLE XI
LIMITATION OF LIABILITY
To the extent permitted by law, the total liability of COVINGTON to CITY for any and all
claims arising out of this Agreement, whether caused by negligence, errors, omissions, strict
liability, breach of contract or contribution; or indemnity claims based on third-party claims; shall
not exceed one million dollars ($1,000,000).
ARTICLE XII
CONSEQUENTIAL DAMAGES
In no event and under no circumstances shall COVINGTON be liable to CITY for any
interest, loss of anticipated revenues, earnings, profits, or increased expense of operations; or for
any consequential, indirect or special damages.
ARTICLE XIII
PROFESSIONAL STANDARDS
COVINGTON will perform services under this Agreement with the degree of skill and
diligence normally practiced by professional engineers or consultants performing the same degree
of similar services. No other warranty or guarantee; expressed or implied, is made with respect to
the services furnished under this Agreement and all implied warranties are disclaimed.
s
ARTICLE XN
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 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 (] 0) 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 thirty (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 XV
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 designs or other work product.
ARTICLE XVI
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, LLC
Attn: Richard J. Covington, President
11044 Research Blvd.. Suite A-325
Austin. Texas 78759
To CITY:
City of Denton, Texas
Attn: City Manager
215 East McKinney Street
Denton, Texas 76201
and to
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City of Denton, Texas
Attn: General Manager, DME
1659 Spencer Road
Denton, Texas 76205
All notices shall be deemed effective upon receipt by the party to whom such notice is given
or within three (3) days after the date of mailing.
ARTICLE XVII
ENTIRE AGREEMENT
'T`his Agreement consisting of nine (9) pages, and three (3) additional pages consisting of
Task Order No. 07-D, 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 XVIII
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 shall
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 XIX
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 XX
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 XXI
PERSONNEL
A. 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.
B. 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 XXII
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 XXIII
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 XXIV
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. 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
B
related work being carried on by the CITY.
D. 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. ,
E. 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 (4) original counterparts, by its duly authorized City Manager; and R.J. Covi gton
Consulting, LLC has executed this Agreement by its duly authorized officer on this the ~ day
of __C~1-~, ?007.
"CITY"
CITY OF DENTON, TEXAS
A Municipal Corporation
By:
George .Campbell, City Manager
ATTEST:
JENN~IFpE~R~ WA'IL,TERS,ICIT(Y SECRETARY
APPR'(7VED A9~T0 LEGAL FORM:
EDWIN M. SNY~ER, CITY ATTORNEY
By: ~~-'C
"COVINGTON"
R. J. COVINGTON CONSULTING, LLC
A Texas Limited Liability Corporation
By: ':i%!~L! l ~~~
W. C. Starnes, Vice-President
EXHIBTT <`A"
PROFESSIONAL SERVICES AGREEMENT
BETR'EEN THE CITY OF DENTON, TEXAS AND
R.J. COVINGTON CONSULTING, LLC
TASK ORDER NO. 07-D
Nodal Market Transition
The work provided for in this Task Order is directed at continuing existing monitoring activities
at the Electric Reliability Council of Texas ("ERGOT"), related_ to transition to a nodal market
design in the Texas electric market. R. J. Covington Consulting ("RJC") will keep Denton
Municipal Electric staff ("Staff') informed of the status of the transition design process and will
alert DME staff of issues that may affect the ability of DME to serve its customers in a cost
effective and competitive manner.
RJC will participate in ERGOT committees and working groups, as directed by DME staff, to
advocate positions that protect DME's ability to cost effectively operate in the existing wholesale
electric market and the future nodal market. While the nodal market is being developed and
implemented, there may be overlapping issues that impact the current market structure. RJC will
focus on all issues that may disadvantage DME either through changes to the current market
protocols or implementation of Public Utilities Commission of Texas ("PUG") approved nodal
protocols. RJC will watch for changes or limitations in the implementation in either existing or
new protocols that may disadvantage DME.
In addition to working on ERGOT activities, RJC will assist DME staff in beginning to prepare
DME for the new nodal market This will include review of the future needs of DME in order to
successfully operate in the new market structure being implemented in ERGOT. The needs
assessment includes consideration of how to minimize locational marginal prices, risk
management techniques to minimize exposure to congestion costs, how to maximize the value of
Congestion Revenue Rights ("CRR"), and other market activities needed to be successful in the
new nodal market environment.
The nodal market is targeted to begin January 2009. Because of the uncertainty regarding utility
requirements to meet the requirements of the nodal market when implemented, additional
funding may be required to complete this work. RJC will focus on the issues that are important
to DME in order to work effectively and efficiently to help control budget. RJC will keep the
General Manager of Denton Municipal Electric irifonned of the status of the budget; and work
may be stopped at any time by notification by the General Manager of Denton Municipal
Electric to RJC to cease work.
Task Order 07-D
Nodal Mazket Transition
Scope of Services
Task A ERGOT Activities
Task A-1 Attend ERGOT Meetings
]. RJC will stay informed on activities at the ERGOT Independent System Operator ("ISO")
and will attend meetings, as directed by DME staff related to existing market operations and
implementation of the nodal market design.
2. RJC will participate in meetings to represent the interests of DME. The meetings that RJC
will attend include the Protocol Revision Subcommittee (PRS), the Wholesale Market
Subcommittee (WMS), the Texas Nodal Transition Plan Task Force (TPTF), the Technical
Advisory Committee (TAG), and the ERGOT Board meetings. Other committees may need
to be monitored as the nodal implementation process progresses.
3. RJC will work with DME staff to develop positions that should be advocated and strategies
for working with other ERGOT stakeholders.
Task A-2 Analyze Proposed Policies and Protocols
1. RJC will continue to review the new market design protocols as they evolve during the
transition process and identify concerns related to DME's ability to effectively function in that
market.
2. RJC will meet with ERGOT staff and other stakeholders, as requested by DME staff, to discuss
nodal market transition issues and negotiate to mitigate negative impacts on DFW loads.
Task B Working With Other Affected Parties
Task B-1 Coordination With Other Market Participates
I. RJC will continue to work with other affected municipalities, organizations, cooperatives,
and associations, where appropriate, to help mitigate the impacts of the nodal market on
loads in certain areas of the state.
2. RJC will participate in meetings with other market participants, as requested by DME staff,
to discuss strategy and positions.
3. RJC will continue to develop issues, papers and statistics to assist in educating legislators,
media and other market participants on nodal market issues.
Task B-2 Work R'ith Attorneys
1. RJC will continue to work with the DME legal counsel to educate them on ERGOT related
issues and to keep them up-to-date on changes that affect DME.
2. RJC will work with DME staff and legal counsel to assist them in preparing any challenges
to the proposed nodal market design or the ERGOT proposed implementation plan to be filed
with either ERGOT and/or the PUCT.
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Task Order 07-D
Nodal Market Transition
Budget
This Task Order calls for a budgeted amount, not-to-exceed $80,000 for professional services and
expenses.. Because of the uncertainty regarding the level of activity required of RJC, this budget is
an estimate. Additional funds may be required to complete this work. This initial budget will not
be exceeded without the prior written approval of the delegated authotity of the City. RJC will bill
this Task Order monthly together with supporting documentation of activities performed. RJC will
send the monthly invoices to Sharon Mays, General Manager of DME. The work being performed
under this Task Order will be under the supervision of the General Manager of DME, and may be
modified at any time upon appropriate notice by the City to RJC.
EXECUTED this the ~ day of _ i ~~~, 2007.
AUTHORIZED BY: ACCEPTED BY:
"CITY"
"RJC"
CITY OF DENTON, TEXAS R.J. COVINGTON COI~iSULTING, LLC
A Texas Municipal Corporation A Texas Lim~itjed~Liability Corporation
By: Lam/" ~~ - BY: _'~'~e%ecG/ ~~~
George C. Campbell W. C. Starnes, Vice-President
City Manager
Dated: Q °/ / '7 Dated: ~~~7
ATTEST: APPROVED AS TO LEGAL FORM:
JENNIFER WALTERS; CITY SECRETARY EDWIN M. SNYDER, CITY ATTORNEY
BY. By: ~
Dated: ~~~~--U~ Dated: `7 (~ ~
3of3
STATE OF TEXAS ~
COUNTY OF DENTON ~
FIItST AMENDMENT TO
PROFESSIONAL SERVICES AGREEMENT FOR CONSULTING SERVICES
PERTAINING TO DENTON MUMCIPAL ELECTRIC
TffiS FIRST AN NDNIENT TO AGREEMENT (the "Agreement") is made and entered
into on the'' day o / (/~ , 20(~ but effective from and after % O , by and
between the City of De on, Texas, a Municipal Corporation, with its princi al office at 215 East
McKinney Street, Denton, Texas 76201 ("CITY"); and R. J. COVINGTON CONSULTING, LLC, a
Texas Limited Liability Corporation, with its principal office at 11044 Research Boulevard, Suite A-
325, Austin, Texas 78759, hereafter "COVINGTON'; acting herein by and through their duly
authorized representatives.
WITNESSETH, that in consideration of the covenants, promises and agreements herein
contained, the CITY and COVINGTON do hereby AGREE as follows:
ARTICLE I
EMPLOYMENT OF CONSULTANT
The CITY hereby contracts with COVIlVGTON, as an independent contractor, and
COVINGTON hereby agrees to continue to perform the services herein in connection with the Scope
of Services as stated in the Articles to follow as well as the Task Order 07-D and 07-F, with diligence
and in accordance with the professional standards customarily obtained for such services in the State of
Texas.
ARTICLE Il
SCOPE OF SERVICES
A. COVINGTON shall provide to the CITY professional consulting services pertaining to assisting
Denton Municipal Electric ("DME") in continuing existing monitoring activities at the Electric
Reliability Council of Texas ("ERGOT"), related to transition to a nodal market design in the Texas
electric market. COVINGTON will keep DME staff informed of the status of the transition design
process and will alert DME staff of any issues that may affect the ability of DME to serve its customers
in acost-effective and competitive manner. RJC will also assist DME staff and legal counsel re
interventions made in these proceedings. RJC will also review the future needs of DME in order to
successfully operate in the new market structure being implemented by ERGOT. The needs
assessment includes consideration of how to minimize locational marginal prices, risk management
techniques to minimize exposure to congestion costs, how to maximize the value of Congestion
Revenue Rights ("CRR"), as well as other market activities needed to be successful in the new nodal
market environment. COVINGTON agrees to perform those services and tasks more particularly and
specifically described in Task Order No. 07-D and also in Task Order No. 07-F, which Task Order No.
07-F is attached hereto and incorporated herewith by reference.
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B. To consult with the City Manager, Assistant City Manager/LJtilities, the General Manager of
DME, the Utility Attorney, and any 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 retroactively on the ~ay o , 200~'and
upon the issuance of a notice to proceed by Denton Municipal Electric (` ME"). he termination
date of this Agreement shall be upon the earliest to occur of the following events: completion of the
work described herein and in the attached Task Order No. 07-D and Task Order No. 07-F; or upon the
depletion and exhaustion of the total $100,000 not-to-exceed amount provided for by the two above
referenced Task Orders; or upon fifteen (l5) day's written notice to terminate, issued by the General
Manager of DME. 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 General Manager of DME.
ARTICLE IV
COMPENSATION
A. COMPENSATION TERMS:
"Direct Non-Labor Expense" is defined as that expense for any assignment incurred hereunder
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 an additional $20,000 for this Task Order No. 07-F, plus the
initial not to exceed amount of $80,000 heretofore approved by Council in connection with Task
Order No. 07-D, totaling a not to exceed amount of $100,000 those services described in Task
Orders No. 07-D and 07-F.
2. The fee for the services described in this Agreement to be performed by COVINGTON
are to be billed at the rates previously agreed to. 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 the CITY through its General Manager of DME. The fee bills as
submitted, shall be allowed and approved by the General Manager of DME. However, under no
circumstances shall any monthly statement for services exceed the value of the work performed
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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 Assistant City Manager for Utilities or the
General Manager of DME; 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
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
(40) 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
(40th) 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, and the CITY notifies COVINGTON in writing of any such defect.
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, analyses and other data prepared by COVINGTON under this Agreement ("Work
Products") are instruments of service and are and shall remain the property of CITY. COVINGTON
shall have the right to make and retain copies and use all Work Products; provided, however, the use
shall be limited to the intended use for which the services and Work Products are provided under this
Agreement. COVINGTON may use and may copyright certain non-sensitive Work Products as
property of COVINGTON; provided that prior written approval is obtained from CITY, whose
approval shall not be unreasonably withheld, and providing that copywriting will not restrict CITY' S
right to retain or make copies of the Work Products for its information, reference and use on the
Project or services under the Agreement.
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The Work Products shall not be changed or used for purposes other than those set forth in this
Agreement without the prior written approval of COVINGTON. if CITY releases the Work Products
to a third party without COVINGTON'S prior written consent, or changes or uses the Work Products
other than as intended hereunder, CITY does so at its sole risk and discretion and COVINGTON shall
not be liable for any claims or damages resulting from or connected with the release or any third party's
use of the Work Products.
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 the CITY, and
including without limitation, damages for bodily and personal injury, death and property damage, and
damage 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 amount of COVINGTON'S insurance coverage 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 party'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.
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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.
ARTICLE XI
LIlVIITATION OF LIABILITY
To the extent pernutted by law, the total liability of COVINGTON to CITY for any and all
claims arising out of this Agreement, whether caused by negligence, errors, omissions, strict liability,
breach of contract or contribution, or indemnity claims based on third-party claims, shall not exceed
one million dollars ($1,000,000).
ARTICLE XII
CONSEQUENTIAL DAMAGES
In no event and under no circumstances shall COVINGTON be liable to CITY for any interest,
loss of anticipated revenues, earnings, profits, or increased expense of operations, or for any
consequential, indirect or special damages.
ARTICLE XIII
PROFESSIONAL STANDARDS
COVINGTON will perform services under this Agreement with the degree of skill and diligence
normally practiced by professional engineers or consultants performing the same degree of similar
services. No other warranty or guarantee, expressed or implied, is made with respect to the services
furnished under this Agreement and all implied warranties are disclaimed.
ARTICLE XIV
TERMINATION OF AGREEMENT
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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 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 thirty (30) days after the date of termination. The CITY shall pay COVIlVGTON
for all services properly rendered and satisfactorily performed and for reimbursable expenses to
ternnation 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 XV
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 designs or other work product.
ARTICLE XVI
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, LLC
Attn: Richard J. Covington, President
11044 Research Blvd., Suite A-325
Austin, Texas 78759
To CITY:
City of Denton, Texas
Attn: City Manager
215 East McKinney Street
Denton, Texas 76201
and to
City of Denton, Texas
Attn: General Manager, DME
6
1659 Spencer Road
Denton, Texas 76205
All notices shall be deemed effective upon receipt by the party to whom such notice is given or
within three (3) days after the date of mailing.
ARTICLE X1~[I
ENTIRE AGREEMENT
This Agreement consisting of ten (10) pages, and three (3) additional pages consisting of the
additional Task Order No. 07-F, 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 XVIIl
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 shall 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 XIX
COMPLIANCE WITH LAW S
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 XX
DISCRIlVIINATION 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 X?Q
PERSONNEL
A. COVINGTON represents that he has secured, or will secure at his own expense any additional
personnel required to perforrn all the services required under this Agreement. Such personnel
shall be subconsultants of COVIl~IGTON, 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.
B. All services required hereunder will be performed by COVIl~tGTON or under his supervision.
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.
B. 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 X~~I
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 ~~II
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 XXIV
MISCELLANEOUS
A. The CITY shall have the right to audit and make copies of the books, records and
computations pertaining to this agreement. COVINGTON shall retain such books,
records, documents and other evidence pertaining to this agreement during the contract
period and five yeazs thereafter, except if an audit is in progress or audit findings aze yet
unresolved, in which case records shall be kept until all audit tasks are completed and
resolved. These books, records, documents and other evidence shall be available, within
ten (10) business days of written request. Further, the COVINGTON shall also require
any and all subcontractors or subconsultants, material suppliers, and other payees to retain
all books, records,. documents and other evidence pertaining to this agreement, and to
allow the CITY similar access to those documents. All books and records will be made
available within a fifty (50) mile radius of the City of Denton, Texas. The cost of the
audit will be borne by the CITY unless the audit reveals an overpayment of 1 % or greater.
If an overpayment of 1 % or greater occurs, the reasonable cost of the audit, including any
travel costs, must be borne by COVINGTON which must be payable within five (5)
business days of receipt of an invoice from the CITY.
laws of the State of Texas.
C. 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
carved on by the CITY.
D. 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 COVIl~IGTON to
perform services under this Agreement.
E. 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 (4) original counterparts, by its duly authorized City Manager; and R. , Covington
Consulting, LLC has executed this Agreement by its duly authorized officer on this the ~ day of
~00~
"CITY"
CITY OF DENTON, TEXAS
A Municipal Corporation
By: / ~ -.~~
George C. Campbell, City anager
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
By: ~=
v
APPROVED AS TO LEGAL FORM:
EDWIN M. SNYDER, CITY ATTORNEY
By:
9
"CO VINGTON"
R. J. COVINGTON CONSULTING, LLC
A Texas Limited Liability Corporation
W. C. Starnes, Vice-President
io
EXHIBIT "A"
FIRST AMENDMENT TO
PROFESSIONAL SERVICES AGREEMENT
BETWEEN THE CITY OF DENTON, TEXAS AND
RJ. COVINGTON CONSULTING, L.L.C.
TASK ORDER N0.07-F
ERGOT MONITORING
The work provided for in this Task Order is directed at continuing existing monitoring activities at the
Electric Reliability Council of Texas ("ERGOT"), related to transition to a nodal market design in the
Texas electric market, impacts of development of Competitive Renewable Energy Zones and
implementing wind power initiatives, transmission development and other issues that will impact costs
assigned to DME. R. J. Covington Consulting (RJC) will keep Denton Municipal Electric staff
("Staff') informed of the status of these and other cost issues and will alert DME staff of issues that
may affect the ability of DME to serve its customers in a cost effective and competitive manner.
RJC will continue to monitor and participate as appropriate in key ERGOT committees and working
groups, as directed by DME staff, to advocate positions that protect DME's ability to cost effectively
operate in the existing wholesale electric market and the future nodal market. While the nodal market
is being developed and implemented, there may be overlapping issues that impact the current market
structure. RJC will focus on all issues that may disadvantage DME either through changes to the
current market protocols or implementation of Public Utilities Commission of Texas ("PUG")
approved nodal protocols. RJC will watch for changes or limitations in the implementation in either
existing or new protocols that may disadvantage DME.
In addition to working on ERGOT activities, RJC will assist DME staff in beginning to prepare DME
for the new nodal market. This will include review of the future needs of DME in order to successfully
operate in the new market structure being implemented in ERGOT. The needs assessment includes
consideration of how to minimize locational marginal prices, risk management techniques to minimize
exposure to congestion costs, how to maximize the value of Congestion Revenue Rights ("CRR"), and
other market activities needed to be successful in the new nodal market environment.
The nodal market is targeted to begin January 2009. Because of the uncertainty regarding utility
requirements to meet the requirements of the nodal market when implemented, additional funding may
be required to complete this work. RJC will focus on the issues that are important to DME in order to
work effectively and efficiently to help control budget. RJC will keep the General Manager of DME
and the Denton Assistant City Manager of Utilities informed of the status of the budget, and work may
be stopped at any time by notification by the General Manager of DME or the Denton Assistant City
Manager of Utilities to RJC to cease work.
Scope of Services
~~
Task A ERCOT Activities
Task A-1 Attend ERCOT Meetings
1. RJC will stay informed on activities at the ERCOT Independent System Operator ("ISO")
and will attend meetings, as directed by DME staff related to existing market operations and
implementation of the nodal market design.
2. RJC will monitor or participate in meetings to represent the interests of DME. The meetings
that RJC will monitor or possibly attend may include the Protocol Revision Subcommittee
(PRS), the Wholesale Market Subcommittee (WMS), the Texas Nodal Transition Plan Task
Force (TPTF), the Technical Advisory Committee (TAC), and the ERCOT Board meetings,
all on an as needed basis. Other committees may need to be monitored from time to time as
issues are developed and policy created.
3. RJC will work with DME staff to develop positions that should be advocated and strategies
for working with other ERCOT stakeholders.
Task A-2 Analyze Proposed Policies and Protocols
1. RJC will continue to review relevant issues and the new market design protocols as they evolve
during the transition process and identify concerns related to DME's ability to effectively function
in the current market as well as the future nodal market.
2. RJC will meet with ERCOT staff and other stakeholders, as requested by DME staff, to discuss
issues that will result in increased costs assigned to DME and negotiate to mitigate negative
impacts on DFW loads.
Task B Working With Other AfTected Parties
Task B-1 Coordination with Other Market Participates
1. RJC will continue to work with other affected municipalities, organizations, cooperatives, and
associations, where appropriate, to help mitigate the impacts of increased cost assignments on
loads in ERCOT and the state.
2. RJC will participate in meetings with other market participants, as requested by DME staff, to
discuss strategy and positions.
3. RJC will continue to develop issues, papers and statistics to assist in educating legislators,
media and other market participants on nodal market issues.
Task B-2 Work with DME Attorneys
L RJC will continue to work with the DME legal counsel to educate them on ERCOT related
issues and to keep them up-to-date on changes that affect DME.
2. RJC will work with DME staff and legal counsel to assist them in preparing any challenges to
the proposed nodal market design or the ERCOT proposed implementation plan to be filed
with either ERCOT and/or the PUCT.
Budget
12
This Task Order calls for a budgeted amount, not-to-exceed $20,000 for professional services and
expenses. Because of the uncertainty regarding the level of activity required of RJC, this budget is an
estimate. Additional funds may be required to complete this work. This initial budget will not be
exceeded without the prior written approval of the delegated authority of the City. RJC will bill this
Task Order monthly together with supporting documentation of activities performed. RJC will send
the monthly invoices to the General Manager of Denton Municipal Electric. The work being
performed under this Task Order will be under the supervision of the General Manager of DME, and
may be modified at any time upon appropriate notice by the City to RJC.
EXECUTED this the ~ day of , 200 t~
AUTHORIZED BY: ACCEPTED BY:
"CITY" "RJC"
CITY OF DENTON, TEXAS R.J. COVINGTON CONSULTING, LLC
A Texas Municipal Corporation A Texas Limited Liability Corporation
By: / ~~ BY~ G~~~~~' ~~`~~~
George C. Campbell W. C. Starnes; Vice-President
City Manager
Dated: / 7 O Y
Dated: 123 ~7
ATTEST:
JENI\'IFER WALTERS, CITY SECRETARY
By:
APPR D A O LEGAL FORM:
EDWIN M. SNYDER, CITY ATTORNEY
By:
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