County Council Tentatively Approves DPU Budget

DPU Manager Tim Glasco discusses his department budget. Photo by Kirsten Laskey/

DPU Deputy Manager Bob Westervelt discusses DPU budget. Photo by Kirsten Laskey/

Staff Report

The Los alamos County Council voted unanimously to tentatively approve the Department of Public Utilities approximately $63.3 million budget during Monday night’s hearing.

DPU Manager Tim Glasco and Deputy Manager Bob Westervelt touched on highlights in the budget for water, electric, wastewater and gas:

  • Regarding electric, due to changes in our reserve requirements because of the San Juan plant restructuring and subsequent changes in the PNM transmission agreement, DPU’s membership with SRSG has been terminated, resulting in a savings of approximately $700,000 per year;
  • The purchased power budget for Electric Production is $2.7 million higher than FY19 budgets, due primarily to changes in market price estimates for purchased power costs;
  • Regarding gas, the NMMEAA deal guarantees a $0.274 discount, which is included in the budget for FY2020. Natural gas market prices remain low, and gas purchases are budgeted at $3.05/MMBTU in FY19, and $2.28/MMBTU in FY20 (before the NMMEAA discount);
  •  There are no major operating and management initiatives or special capital projects scheduled for this budget period for gas utilities;
  • The O&M and capital budget for Water Distribution has been revised extensively to reflect the proposed 20-year plan presented to the Board at the November 2017 BPU meeting. Water sales appear to have stabilized more in line with the revised sales projections we adopted in last year’s budget cycle.  In accordance with the long-range plan, a 5 percent increase in potable rates is budgeted in FY20;
  • The capital plan for Water Production, like last year, includes non-potable projects that are funded through a partial grant/loan from the Water Trust Board (WTB). These projects will only occur if the WTB funding is realized;
  • Several initiatives have been implemented to alleviate the financial challenges in the wastewater division associated with the need to construct a replacement treatment facility in White Rock; and
  • A transfer of $2.5 million was used in February 2018 to pay down the existing balance of the debt on the LA Plant. In addition, the remaining balance was refinanced at a lower rate, and the term extended by five years, further reducing debt service requirements in the fund. All other projects in both the treatment plants and the collection system have been postponed allowing staff and funding to be concentrated on a successful White Rock plant project. The design work for the White Rock Wastewater Treatment Plant is in the FY2019 budget and the $13 million construction costs are projected for the FY2021 budget.