Los Alamos County Board of Public Utilities Work Session - April 1, 2026

The Board of Public Utilities (BPU) held a work session on April 1, 2026, beginning at 5:30 PM. The board voted to suspend procedural rules to allow formal action. Items included approval of a consent agenda (two infrastructure contracts), a presentation on the annual Voice of the Customer survey, an overview of the County Council's 2026 Strategic Leadership Plan, introduction of a gas rate ordinance, and updates on the Electric Reliability Plan, Integrated Resource Plan, plug-in solar systems, and APPA financial ratios. The meeting also announced a vacancy on the BPU.

Consent Calendar

• Approval of Bid No. 26-37 East Rd 14” Water Transmission Line Project: Awarded to NM Underground Utilities, Inc. for a total project amount of $1,762,570.88 (including base bid, alternate, and contingency). The project will replace a deteriorating 14-inch steel waterline installed in 1949, which has caused frequent failures affecting up to half the community’s water supply. Funding includes a $2,250,000 grant and $250,000 loan from the New Mexico Finance Authority (Loan/Grant No. WPF-6584).
• Award of Task Order No. 15 under AGR22-18e with R&M Construction: For drilling five piers at the White Rock Substation for the Transformer Replacement Project, in the amount of $463,657.50 with a 10% contingency, plus gross receipts tax. This is necessary due to soil conditions and the sole bid received from the on-call contractor after two unsuccessful bid cycles.

Presentations

• Annual Voice of the Customer Survey (Sophia Vigeant and Catherine Vollmer, GreatBlue Research): The survey, conducted January 13–February 24, 2026, received 400 residential and 40 commercial complete responses. Key findings: Overall satisfaction with service quality remained high (over 85%), but residential satisfaction with electric and water service quality declined slightly from 2025. The Net Positive Score (NPS) for residential customers fell from 79.9% to 70.8%. Commercial customers showed higher satisfaction. New questions on environmental sustainability revealed strong support for water conservation among both groups (over two-thirds of residential, three-quarters of commercial), but opposition from residential customers to phasing out natural gas by 2070 (over half opposed), while commercial customers supported it. Demographic respondents were predominantly older (65–74), high-income, long-term homeowners. Presenters recommended strengthening perceived value and aligning messaging on conservation.
• Overview of County Council’s 2026 Strategic Leadership Plan (presented by Council Liaison Ryn Herrmann and County Manager): The plan, adopted November 4, 2025, includes five priority areas and 22 objectives. No major changes from prior plans. Relevant to DPU are objectives under Quality Governance (communication, fiscal stewardship), Operational Excellence (reliable services, infrastructure asset management), and Environmental Stewardship (water conservation, climate action). The county is developing an updated performance dashboard.

Public Hearings

• Introduction of Code Ordinance No. 02-379 – Gas Service Rate Increase (Deputy Utility Manager Joann Gentry): The ordinance proposes a two-year rate increase: 29% in FY2027 and 17% in FY2028 for residential, multifamily, and commercial customers (30% and 19% for County and Schools). The gas fund is projected to lose $2.36 million in FY2026 due to warmer winters and lower usage (projected sales $5.9M vs. budgeted $8.36M). The current rate structure includes a service charge, fixed charge per therm, and variable cost of gas. The proposed rates aim to restore positive cash flow by FY2029 and fully fund cash reserves by FY2032. Chair Gibson noted the need to catch up after years of no increases. A public hearing will be held on May 6, 2026, with final adoption expected June 9, 2026.

Discussion Items

• Electric Reliability Plan (ERP) FY2027 Update (Dennis Astley): The plan outlines strategies to maintain a SAIDI target of 60 minutes or less. Key projects include the new LASS Substation addition to improve redundancy, ongoing replacement of aging underground and overhead infrastructure (10-year capital plan of $34.1 million), and development of SCADA. The system faces challenges from distributed generation, electric vehicle adoption, and the goal of an all-electric county. Supply chain issues and staffing shortages continue.
• Biannual Update: Integrated Resource Plan (IRP) (Ben Olbrich): Staff recommended moving from traditional 2–5 year IRPs to dynamic modeling that allows near-real-time planning. The previous IRP’s static approach was insufficient to adapt to rapid changes in generation, market conditions, and load forecasts. A new scope of work will be developed for continuous modeling, potentially using licensed software or on-call services.
• Plug-in / Balcony Solar Systems (Ben Olbrich): An overview of small PV systems that plug into standard outlets. While offering low cost (potentially $0.50/watt) and portability, they raise safety concerns including breaker masking, GFCI interference, and fire risk. UL 3700 was published in December 2025 to address safety, but comprehensive certification is not yet standard. Three policy options were presented: (1) full interconnection agreement under existing rules, (2) simplified registration without compensation for exports, or (3) waive interconnection and treat as an appliance with safety regulations. Board members leaned toward simplification but stressed safety. Chair Gibson noted the need to get ahead of this issue as systems become more accessible.
• American Public Power Association (APPA) Financial and Operating Ratios (Philo Shelton): DPU’s 2024 data compared to APPA medians, industry medians for 5,000–10,000 customers, and Western region medians. Notable differences: DPU’s total O&M expense per kWh sold ($0.127) is higher than the APPA median ($0.090) and customer-count median ($0.081). The operating ratio (1.243) is above 1, indicating expenses exceed revenues, while APPA median is 0.853. Debt to total assets (0.382) is above median (0.284). Labor expense per worker-hour ($54.61) is below the Western region median ($66.88). Capital expenditures to depreciation (1.06) is below median (1.52). Board members requested deeper analysis on why O&M costs are higher, noting topographical challenges but questioning if comparisons are appropriate.
• Announcement of Board of Public Utilities Vacancy: Member Matt Heavner’s partial term ends June 30, 2026. He is eligible to apply for a full five-year term. Current board composition: two Independents, two Republicans, one Democrat (no supermajority). Applications due April 27, 2026. The vacancy ad and brochure were reviewed; Chair Gibson requested his personal phone number be listed to improve accessibility.

Key Outcomes

• Consent agenda approved (unanimous voice vote).
• Gas ordinance introduced without vote; will be brought back for public hearing on May 6, 2026.
• No formal votes taken on other agenda items; they were informational/discussion.
• Board will continue discussions on plug-in solar policy at future meetings; staff directed to investigate safety certification status and real-world data from Utah and Virginia.
• Staff will provide deeper analysis of APPA ratio discrepancies, particularly O&M costs, at a future meeting.
• BPU vacancy announcement approved with minor modification to include Chair Gibson’s phone number.
• Next steps: The ERP, IRP, and APPA reports will inform ongoing budget and planning; the plug-in solar policy options will be refined based on board feedback.