City Council Agenda Report
Meeting Date: March 3, 2026
From: Todd Dusenberry, General Manager of Public Utilities Department: Public Utilities
Submitted by: Adriana Ramos, Principal Management Analyst Subject
Services Agreement with NewGen Strategies and Solutions, LLC Recommendation
Approve and authorize the City Administrator to execute a Services Agreement with NewGen Strategies and Solutions, LLC, in substantially the same form as submitted, to provide financial and technical review of Southern California Edison transmission rate and wholesale revenue requirement services for a total amount not-to-exceed $32,500, for a three-year term.
Background
Southern California Edison (SCE) recently completed a rate refresh analysis for Vernon’s current load. The Wholesale Distribution Charge to Vernon Public Utilities (VPU), which has remained unchanged since 1998, is proposed to increase from $265,776 to $3,377,604 annually based on SCE’s analysis and VPU’s current load. Additionally, SCE indicated that incremental data center load will require further rate adjustments, subject to ongoing review and discussion.
The Wholesale Distribution Charge calculation involves several complex elements, including identification of the service path, load ratio, plant costs, revenue requirements, and allocations based on load share. Since the charges to VPU depend on SCE’s calculations, an independent technical and financial review is necessary to ensure that the charges assigned to VPU are accurate, reasonable, and appropriate. This review requires specialized technical, financial, and regulatory expertise, as well as the potential need to prepare or support a rate filing protest before the Federal Energy Regulatory Commission (FERC).
In compliance with Vernon Municipal Code (VMC) Section 3.32.080, on January 15, 2026, staff issued a request for Proposals (RFP) for Financial and Technical Review of SCE Transmission Rate and Wholesale Revenue Requirements. The RFP was advertised on the City’s Planet Bids platform. The scope of services includes a comprehensive financial and technical review of SCE’s transmission rate requirement and wholesale rate requirements, including service path, load ratio, plant costs, cost allocations, and other related components that impact charges to VPU.
A proposal package was received by only one firm by the January 26, 2026 deadline. A qualified panel thoroughly evaluated the proposal based on professional qualifications (40%), cost and fees (30%), references (20%), and responsiveness to the RFP (10%). Based on the evaluation process, the proposal submitted by NewGen Strategies and Solutions, LLC (NewGen) demonstrated a combination of expertise, understanding, experience, and a comprehensive approach that meets the scope of services detailed in the RFP. NewGen currently provides utility cost of service, rate design, and financial planning services for VPU and performs such tasks to the City’s satisfaction.
VPU staff recommends that the City Council approve a Services Agreement with NewGen to provide a Financial and Technical Review of the SCE Transmission Rate and Wholesale Revenue Requirement services for a total amount not-to-exceed $32,500 over a term of three years. City Council approval is required pursuant to VMC Section 3.32.030(B) if, in the 12 months preceding the effective date of the proposed new, renewed, or otherwise amended contract, the City has paid or awarded the proposed vendor more than $100,000. With the approval of this Services Agreement, the total value of contract awards to NewGen will be $431,900.
The proposed Services Agreement has been reviewed and approved as to form by the City Attorney’s Office.
Fiscal Impact
The fiscal impact is not to exceed $32,500. Sufficient funds are available in the Electric Fund, Administration, Professional Services-Other, Account No. 055-050-580-529215 for the current year and sufficient funds will be budgeted in subsequent years.
Attachments
1. Services Agreement with NewGen Strategies and Solutions, LLC