Staff Report

Los Alamos County Council approved, 5-1, with Councilors David Reagor opposed and Melanee Hand absent, to adopt the proposed new gas rates during its regular meeting Tuesday night.

Department of Public Utilities Deputy Manager for Finance Karen Kendall presented the new rates. She explained that a bill totaling $70.88 would increase to $72.15 using the proposed rate changes, plus the .59 cent for the variable cost of gas passthrough. These rates will go into effect in October.

Kendall said the reason behind the rate change is the decrease in revenue resulting from significantly lower total therms sold in FY2024 than in FY2023 and lower than the projected therms for FY2025. In contrast, she noted increased costs due to corrective procedural and documentation measures taken to address findings in a recent gas audit by New Mexico PRC Pipeline Safety Bureau. She also noted increases in gas transportation rates on both a per meter and variable basis.

Council previously approved increases for gas rates, but Kendall said that they were insufficient. She said that if the past approved rate increases for 2024 and 2025 go into effect, DPU’s cash reserves would be diminished.

Council Chair Denise Derkacs further noted that the County Charter does not allow the transfer of funds from the County’s general fund into the utilities fund to offset increased costs.

While he did not specifically give a reason for opposing a new rate increase, Reagor did question what could be done to stop repeatedly requesting gas rate increases.

DPU Manager Philo Shelton explained that the County has both fixed-price and spot-price agreements in place to balance the cost of natural gas. He added that no price assurances could be made short of DPU purchasing its own gas well.

In an unrelated matter, Council unanimously approved funding sources for several infrastructure projects in the County.

Infrastructure projects Include:

• An application to the New Mexico Environmental Department for a $1.5 million loan that would be used for mechanical and electrical upgrades in the County’s water production system;
• Applications to three different grant programs within the New Mexico Department of Transportation for a crack seal and slurry seal road improvement project on Grand Canyon Drive in White Rock; and
• An application to the New Mexico Finance Authority for $2.7 million loan for a water line replacement project in the Denver Steels neighborhood.

In other business, council:

• Learned from Board Laision Suzie Havemann that the Art in Public Places Board decided not to recommend purchasing the Boys of Pajarito Plateau painting, citing the cost of the painting as the main reason.
• Heard a report from County Manager Anne Laurent regarding the covered seating area at Brewer Arena. She explained that the contractor hired for the seating area’s capital improvement project presented County staff with a report last week, which recommended not to use the stadium seating. This, Laurent said, was a surprise. County staff decided to follow the contractor’s recommendation and erect temporary seating. She emphasized that with fair and rodeo scheduled this weekend, all events are continuing as scheduled.