Los Alamos County Board of Public Utilities Approves FY2027 Budget and Contracts on March 18, 2026

On March 18, 2026, the Los Alamos County Board of Public Utilities (BPU) met in the Municipal Building Council Chambers. The board approved the DPU FY2027 budget using Gas Fund Option 3, recommended approval of an Electric Coordination Agreement (ECA) extension, a short-term power purchase agreement, a mobile generator services agreement, and a consent agenda covering minutes, a waterline construction award, and a revenue transfer. All votes were 4-0, with items forwarded to County Council.

Consent Calendar

• Approved the February 4, 2026 work session and February 18, 2026 regular session minutes as presented.
• Recommended Council award of IFB 26-23 for the San Ildefonso Waterline Replacement Project in the base bid amount of $1,617,673.80, plus a $346,384.40 contingency, for a total project amount of $2,078,307 including NMGRT. The project replaces a 65-year-old water distribution line and upgrades it to 12 inches to support North Mesa housing and fire-flow needs.
• Approved the FY2026 revenue-transfer calculation based on FY2025 audited sales: $702,838.13 from Electric Distribution and $294,910.60 from Gas, for a combined $997,748.73; approved Budget Revision 2026-48; and recommended Council extend the revenue-redirection option to FY2031 and keep the funds in the Joint Utility Fund for Trinity Drive utility replacement work.

Public Comments & Testimony

• James Horniki, a member of the public, said the rate increases were difficult to accept, but he reluctantly supported them because waiting would make costs higher.
• No public comments were offered during the opening, consent agenda, or closing public comment periods.

Discussion Items

DPU FY2027 Budget and Gas Rate Options

• Joann Gentry presented the FY2027-FY2028 proposed budget. Total FY2027 Joint Utility Fund expenditures are $94,688,744, down from $100,071,991 in the February preliminary budget. Key revisions included correcting double-counted electric production purchase power, increasing the Vactor budget by $100,000, adding $22,000 for required wastewater laboratory testing, and adding a $1.5 million state grant for the EA-4 power line project.
• Proposed rate ordinances would increase electric distribution rates 8%, water rates 8%, sewer rates 7%, and gas rates 9%; for a typical residential customer the combined increase is about $20.27 per month, or 7.02%.
• Gentry presented three gas-rate structures. Option 1 uses 9% annual increases. Option 2 adds a $0.25-per-therm gas recovery charge for FY2027-FY2028, producing a 23.6% residential gas bill increase in FY2027. Option 3, developed just before the meeting, raises the fixed gas rate to $0.48 per therm in FY2027 and $0.59 in FY2028, with smaller future increases; it would build gas reserves by about FY2032 and produced projected debt coverage ratios of 1.26 in FY2027 and 1.47 in FY2028.
• Several board members said Option 3 was more straightforward and less of a customer shock than Option 2, while Member Stromberg said he could support either. The board approved the budget with Option 3 substituted for the staff-recommended Option 2.

Electric Coordination Agreement (ECA) Modification 26

• Ben Olbrich requested ECA Modification 26 to extend the existing Electric Coordination Agreement by 120 days, from March 31, 2026 to July 31, 2026, while negotiations continue on a new 10-year agreement. The Los Alamos Power Pool approved the modification on March 11, 2026.

Short-Term Power Purchase Agreement (PPA)

• Olbrich requested authority for a PPA not to exceed $3,833,000 plus GRT for April-June 2026. One indicative offer at about $31 per MWh had been received, and competitive selection would close March 31, 2026. The amount includes a 25% contingency for market price changes. He noted the power pool bought 20 MW for March but needs up to 45 MW for the coming months, partly because LANL's combustion turbine has had outages.

Mobile 560 kW Generator and Maintenance Agreement

• Clay Moseley presented Services Agreement AGR26-36 with Loftin Equipment Company: a seven-year agreement for $436,603 plus GRT for a mobile 560 kW diesel generator, delivery, and maintenance. The total FEMA/DHSEM hazard mitigation grant and match is $387,476.25, with DPU's 25% match equal to $96,869.06; the grant covers the purchase, while DPU will budget annual maintenance costs. The generator is designed to keep water wells and boosters operating during wildfire-related outages.

Board Business and Reports

• Chair Gibson noted the retirement of James Alarid, Member Stromberg's campaign for County Council, and a corrected natural-gas usage calculation showing the county has not met its gas-reduction goal.
• Utilities Manager Philo Shelton reported that Elk Ridge has 100 homes converted to the new gas system; ECA negotiations with DOE now include a proposed 10-year renewal and an estimated 10-year contract value of $425 million; Jemez Fire Protection Phase III is eligible for about $2.8 million in FEMA funds; Foxtail Flats remains on schedule for June 18, 2027; and PFAS class-action settlement payments may be expedited.
• County Manager Anne Laurent reported police and fire reaccreditation, $40 million in broadband bond proceeds, and heightened fire-season concern.
• Council Liaison Ryn Herrmann reported Council accepted the EV charging and fleet conversion plans and approved a Trinity Drive construction management amendment.
• ESB Liaison Sue Barnes reported a full ESB board, a recycling contamination rate of about 18%, and planning for Earth Day on April 18, 2026.
• The board reviewed the APPA National Conference training opportunity in Boston, June 26-July 1, 2026; travel would not exceed $3,000 per member, and no approval was made.

Status Reports

• Cathy D'Anna presented the DPU Quarterly Report for FY2026 Q2 (October-December 2025). Highlights included 3.0 MW of residential distributed generation, strong December hydro generation, recovery in SAIDI, and recognition of Myron Cordova as Safety Employee of the Quarter.
• February 2026 status reports showed electric reliability of SAIDI 1 hour 29 minutes, SAIFI 0.80, and ASAI 99.3487%; accounts receivable more than 90 days past due totaled $13,089.75; and Risk Management reported a utility OSHA recordable injury rate of 15.95 per 100 FTE versus a 1.9 national utility average.
• Agenda item 9.b was titled "Status Reports - February 2025," but the attachments and discussion correspond to February/March 2026.

Key Outcomes

• Approved the agenda and consent calendar, 4-0.
• Approved the FY2027 DPU budget of $94,688,744 with Gas Fund Option 3, and the FY2027 budget option for the $900,000 Fairway Water project, forwarding both to Council, 4-0.
• Recommended Council approval of ECA Modification 26, extending the agreement to July 31, 2026, 4-0.
• Recommended Council approval of a PPA not to exceed $3,833,000 plus GRT for April-June 2026, 4-0.
• Recommended Council approval of Services Agreement AGR26-36 with Loftin Equipment Company for $436,603 plus GRT for seven years, 4-0.
• Next steps include April 1, 2026 rate ordinance introductions, an April 15, 2026 LANL presentation, Utilities Manager performance reviews on May 6 and June 3, and possible APPA conference travel if board members express interest.