Denton Public Utilities Board recommends $9.52M Acceleron contract to accelerate turbo inspections at Denton Energy Center

The Denton Public Utilities Board on March 23 voted to recommend that City Council approve a five-year contract with Acceleron US, up to $9,520,000, to provide turbocharger replacement parts and on-site services for the Denton Energy Center.

Jose Gaetan, executive manager, power supply for DME, told the board the plant has 12 engines with two turbos each, and that frequent start-stop cycles used for peak shaving are increasing stress on turbo components. "The OEM is giving us a change in the maintenance schedule, which would... have us look at the turbos a little bit earlier based on the number of start and stops, as they are seeing some more fatigues out in the field on these turbos," Gaetan said, explaining staff’s rationale for accelerating inspections ahead of the originally planned service interval.

Staff provided cost estimates to illustrate the risk and scale of work. Repairing a damaged but repairable turbo averages about $125,000; a complete replacement averages about $400,000, and staff estimated that up to 10 turbos might need replacement without earlier intervention — roughly $4,000,000 in replacements alone. For the five-year service and spare-part plan, staff cited an estimated $2,520,000 for parts and routine maintenance on 24 turbos and presented a total contract and related costs of $9,520,000.

Gaetan said about $2,500,000 of that amount could be cash-funded; the remainder would be funded with 10-year bonds intended not to extend Denton’s existing debt beyond the payoff of prior bonds in 2037. A board member asked why the city would issue 10-year bonds for five years of service; staff responded the bond term reflects a policy decision to avoid lengthening the plant’s outstanding debt schedule.

Board members asked operational questions about the engines’ life cycles, whether the accelerated schedule reflected a change in manufacturer guidance, and whether the city had used Acceleron previously. Plant manager Arthur Panda said the city currently performs in-house maintenance but that this would be a brand-new contract with Acceleron. "Yes. We did use the bidding process. They were the lowest," Panda said, and Purchasing Manager Laurie Hill confirmed two vendors were evaluated and that Acceleron was the only bidder to provide all required line items.

During the discussion staff noted the project had been included in the CIP at roughly $15 million for fiscal 2029–30, but newer proposals and the accelerated schedule increased projected costs toward $20 million. Staff also said the board already holds about $2.5 million from a prior settlement, which staff plans to use toward these projects to limit additional borrowing.

The motion to recommend the ordinance authorizing the contract passed by voice vote; the meeting record does not include a roll-call tally. The board then moved on to routine management reports and adjourned.

What happens next: The board’s recommendation will be transmitted to Denton City Council for consideration of an ordinance to authorize the contract and related financing.