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Denton Municipal Electric amends contract

Profile image for By Peggy Heinkel-Wolfe
By Peggy Heinkel-Wolfe

Spokesman: Energy Center plan gets money-saving change

The ink had barely dried on the city’s contract to build a new natural gas-fired power plant before Denton Municipal Electric came back to change it this week.

But whatever that contract change is, it’s a secret.

The City Council went into closed session during its regular meeting Tuesday to discuss the request. DME spokesman Brian Daskam said the change would ultimately save money for the project.

“This amendment transferred one specific function from one vendor to Burns and McDonnell,” Daskam wrote in an email.

Late last year, the city hired Burns and McDonnell Engineering, of Kansas City, Missouri, to build the new power plant, known as the Denton Energy Center. Daskam did not say what the contract change was or which vendor was affected by the change.

The council’s agenda called for members to take final action on changing the contract with Burns and McDonnell in closed session. No public vote of any kind for the Denton Energy Center was posted on Tuesday’s agenda.

DME has disclosed few details about the Denton Energy Center. The city’s electric ratepayers and taxpayers are backing $265 million in bonds to pay for the massive project.

The bonds are paying for two major contracts as well as some smaller contracts associated with the project. Wärtsilä, based in Finland, has one of the major contracts, supplying DME with 12 natural gas-fired engines.

Industry sources estimate that contract is worth about $100 million, but DME has refused to disclose the contract amount or other details of its deal with Wärtsilä.

Burns and McDonnell has the other major contract. Although an engineering firm, Denton and DME hired the company to build the plant that will house the Wärtsilä engines and make electricity for the Texas grid.

Industry sources estimate that Burns and McDonnell’s contract, too, is worth about $100 million. Again, DME has refused to disclose how much it is paying the company for its services.

DME says information about the Denton Energy Center must remain secret so they can compete when its time to sell the electricity made there.

Whatever DME requested, the contract change appeared to be large enough for Mayor Chris Watts to ask how much a city could change a contract before the city has to send it out for bid again.

That figure is 25 percent. In other words, DME could possibly seek as much as $25 million in changes to either its contract with Wärtsilä or Burns and McDonnell before the job has to go out for bid again.

Preliminary construction has already begun at the power plant site, where an existing substation also will be expanded.

The plant will be located west of Denton Enterprise Airport, along Jim Christal Road.

DME has already used the project to negotiate better-than-expected terms on a contract to buy more renewable energy from a new wind farm beginning in 2019, officials said. More renewable energy contracts are planned.

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881 and via Twitter at @phwolfeDRC.