City Council Agenda Report
Meeting Date: October 7, 2025
From: Todd Dusenberry, General Manager of Public Utilities Department: Public Utilities
Submitted by: Adriana Ramos, Senior Management Analyst
Subject
Amendment No. 1 to Services Agreement with StoneX Financial, Inc. – FCM Division Recommendation
A. Find that the best interests of the City are served by a direct award of Amendment No. 1 to the Services Agreement with Stone X Financial, Inc., - FCM Division (StoneX) for Energy Risk Management Services, without a competitive selection process pursuant to Vernon Municipal Code Sections 3.32.110(B)(2) and (3); and
B. Approve and authorize the City Administrator to execute Amendment No. 1 to the Services Agreement with StoneX, in substantially the same form as submitted, to amend the Agreement to modify the scope of work, for a total amount not-to-exceed $21,000.
Background
Vernon Public Utilities (VPU) provides essential services to the City’s businesses and residential community, including a full range of dependable, high-quality, and competitive electric, water, natural gas, and fiber optic services. As an electric and natural gas provider, VPU has significant energy and natural gas procurement requirements for its retail and natural gas customers and its operation of the natural gas-powered Malburg Generating Station.
On November 7, 2023, the City Council approved a Services Agreement with StoneX Financial, Inc. – FCM Division (StoneX) to provide energy risk management services for VPU in the amount of $180,000 for a term of three years. The Agreement allows StoneX to assist VPU in procuring power and natural gas. StoneX has reviewed VPU’s current Energy Risk Management Policy and procedures, evaluated its hedge strategy, and assessed VPU’s energy portfolio. Additionally, StoneX has conducted risk analysis reporting, credit risk evaluations, and monitoring of VPU’s counterparties. StoneX also provides ongoing consulting concerning hedge strategies and market intelligence.
To improve the management and control of VPU’s power supply costs, including natural gas, VPU staff seek to enhance its hedging strategies by using the integrated tools of the StoneX Plus Energy Analytics platform (StoneX Plus). This platform enhances VPU’s risk management and strategic decision-making capabilities by simplifying complex energy market data into clear, actionable strategies. Through StoneX Plus, VPU staff will gain access to essential pricing data, forecasts, market fundamentals, and quantitative indicators that will help the utility manage energy market volatility, mitigate risks, and optimize procurement and hedging strategies.
StoneX Plus includes several core features designed to enhance VPU’s energy risk management program:
▪ StoneX Commodity Indicator – This tool quantifies key energy market data, providing VPU with daily insights into market risks by condensing the 16 most important drivers into one actionable output. It will allow VPU staff to quickly assess market positioning and volatility, offering traders and VPU’s energy risk manager timely insights for informed decisionmaking in fluctuating power markets. ▪ HedgeMonitor Pro – A proprietary analytics tool that supports VPU’s risk management strategy. HedgeMonitor Pro identifies both hedging opportunities and situations where hedging may not be warranted by utilizing a disciplined framework based on Value, Economics, and Momentum indicators. By using this tool, VPU can make objective and strategic decisions while avoiding reactionary responses to mixed market indicators. ▪ Forecast Tool – The price projection tool uses historical and forward market trends to provide forecasts. It considers contract settlements, seasonality, and forward market curves. The user-friendly dashboard offers customizable parameters for informed decision-making, giving VPU staff daily access to price forecasts from one month to ten years.
Amendment No. 1 modifies the current scope of work for StoneX to include the use of the StoneX Plus platform, which will improve the reliability of VPU’s hedging and procurement strategies. It is recommended that the City Council find that it is in the best interests of the City to award Amendment No. 1 without a competitive process, as this will augment the services already provided by StoneX under their existing agreement and will ultimately serve to enhance VPU’s energy risk management program and strategy. StoneX has over 33 years of expertise in providing risk management services and software solutions that help organizations manage energy price and credit risks. The StoneX Plus platform offers access to top market intelligence, insights, and forecasts, backed by a global team of commodities industry specialists. The introduction of StoneX Plus demonstrates the company’s commitment to digitizing essential solutions and expanding its services to organizations, such as VPU. VPU will benefit from improved cost control, greater visibility into market risks, and access to objective, data-driven analytics that directly support VPU’s hedging strategies and procurement planning by integrating these advanced tools with existing services.
City Council approval of Amendment No. 1 with StoneX is required pursuant to Vernon Municipal Code Sections 3.32.110(B)(2) and (3), as the proposed contract exceeds $100,000. Approval of Amendment No. 1 is essential for VPU to comply with the Energy Risk Management Policy adopted by the City Council through Resolution No. 2022-40. This policy provides recommendations for gas procurement strategies, enabling hedging under different market conditions and ensuring cost and budget certainty.
VPU staff recommends that the City Council approve Amendment No. 1 to modify the scope of work, for a total amount not-to-exceed $21,000, bringing the total contract amount to $201,000.
Amendment No. 1 has been reviewed and approved as to form by the City Attorney’s Office.
Fiscal Impact
The fiscal impact is not-to-exceed $21,000. Sufficient funds are available in the Electric Fund, Administration, Professional Services – Other, Account No. 055-050-580-529215 for the current fiscal year.
Attachments
1. Amendment No. 1 – StoneX Financial, Inc. – FCM Division