Board of Public Utilities Meeting – June 17, 2026: Gas Rate, Undergrounding, Reserve Policy
Board of Public Utilities Regular Meeting – June 17, 2026
The Board of Public Utilities held a regular meeting on June 17, 2026 at 5:30 PM in the Municipal Building Council Chambers. Key actions included approving a one-year gas rate increase ordinance for public hearing, supporting a charter amendment to remove the utility profit transfer to the General Fund, reviewing undergrounding cost estimates, and discussing reserve policy alternatives. The meeting was attended by Chair Robert Gibson, Vice Chair Matt Heavner, and Members Jennifer Hollingsworth and Eric Stromberg (quorum of 4). Member Charles Nakhleh was absent.
Consent Calendar
- Approved the minutes of the May 6, 2026 Work Session and May 20, 2026 Regular Session as amended.
- Approved the NMFA Binding Letter of Commitment for the Denver Steels Phase II Water Service Line Replacement Project in the amount of $525,000 and authorized submission of required documents.
- Approved Budget Revision 26-87 increasing the cost of water transfer from Water Distribution to Water Production by $70,000 to cover June 2026 drought-related water purchases.
- Approved General Services Agreement AGR27-804 with Kutak Rock, LLP in an amount not to exceed $150,000 plus applicable gross receipts tax for legal services in connection with utilities operations, effective July 1, 2026 through June 30, 2031.
Public Comments & Testimony
- Ray Sarder (White Rock resident) opposed the proposed residential demand charge, arguing it would effectively charge customers twice for peak usage and suggested alternative approaches such as tying the demand charge to system peak hours or to customers who drive the system peak.
- Lynnell Brode (Western area resident) expressed concern about the cumulative impact of multiple rate increases (electric and proposed gas) on residents' ability to pay and asked the board to consider spacing rate increases further apart.
Discussion Items
- One-Year Gas Rate Increase (Item 7B): Deputy Utility Manager Joann Gentry presented a revised one-year rate ordinance (LAC Code Ordinance 02-385) following County Council’s rejection of a two-year increase on June 9, 2026. Council had requested a one-year proposal because a charter amendment regarding profit transfer could affect future rate setting. Staff reported that FY2026 gas net loss is projected at about $760,000. The proposed ordinance raises the monthly service charge and the fixed cost recovery per therm, but removes the second year of increases. The board voted 4-0 to direct the Utilities Manager to present the ordinance at the July 22, 2026 BPU meeting for a public hearing.
- Electric Distribution Undergrounding (Item 7C): Deputy Utility Manager Dennis Astley presented a high-level cost analysis of converting all overhead power lines to underground in White Rock (25.5 miles) and Townsite (44.84 miles). Total estimated cost was approximately $79.5 million, not including rock adders, which could double costs. Benefits included improved aesthetics and reduced weather-related outages; disadvantages included higher installation and repair costs, longer outage durations, and challenges with communication companies. The board discussed the need for a cost-benefit comparison to overhead replacement and requested further analysis. No action was taken.
- Review of 10-Year Budget Plan and Reserve Policies (Item 7D): Joann Gentry presented three alternative scenarios to the 2016 Financial Guidelines. Options included reducing the operating reserve from 180 days to 90 days, setting the capital expenditure reserve based on a 10-year average, and adding a rate stabilization reserve of 20% of revenue. Currently, some funds require up to 90% of annual revenue to meet reserve targets, which staff noted is difficult to achieve. The board suggested analyzing 10 years of historical data to tailor reserve levels to each utility fund. No action was taken.
- Charter Review – Utilities Profit Transfer (Item 8G1): The board discussed County Council's proposed charter amendment to remove paragraph 6 from Section 509 of the Charter, which requires that “all remaining operating profits shall be transferred to the County General Fund.” The change would allow profits to remain in the utility system. The board voted 4-0 to support drafting an ordinance to place the amendment on the November 2026 ballot.
- Annual BPU Presentation to Council (Item 8G2): The board approved the annual presentation to County Council and Chair Gibson's delivery at the July 14, 2026 Council Work Session (amended from July 15).
Key Outcomes
- Consent Agenda: Approved as amended, 3-0 (Hollingsworth, Heavner, Gibson; Stromberg joined later).
- Gas Rate Increase Ordinance: Motion passed 4-0 to direct staff to present LAC Code Ordinance 02-385 at the July 22, 2026 BPU meeting.
- Charter Amendment Support: Motion passed 4-0 to support removal of the profit transfer provision from Charter Section 509.
- Annual Presentation: Approved 4-0 with corrected date of July 14, 2026.
- No action was taken on the undergrounding discussion or reserve policy review; staff will bring back further analysis.
Meeting Transcript
Good evening. I call to order this June 17th, 2026 regular meeting of the Board of Public Utilities. Thanks everyone for participating this evening. We will start as usual with uh opening the floor to public comment on matters not otherwise on our agenda this evening. Do we have any public comment? I see one. Sure. Can I not please state your name for the record and limit your comments to three minutes if you would please? Okay. That my name is Ray Sarder. I'm a resident of White Rock. And what I wanted to address is this residential demand that's being proposed. In principle, I oppose it because we're paying for the electricity twice. That the electric you're going to have an additional fee for our peak demand hour. And we're already paying the rate forever that hour is given in our forthcoming two-tier system. Given that if reality it can't, there isn't it won't be eliminated. I also oppose how it's being proposed. That the proposal is our peak demand over any 24 hours of the month. Whereas the purpose of the two-tier pricing system is to get us to shift out of the peak demand for the system. And that's what this res if you were going to have this residential demand. It should have that same purpose also. My wife often gets up early, 5 a.m. and she likes to turn on what she calls her servants. So the dishwasher will come on, the laundry, the dryer, the washing machine. She'll put a roast in the oven and all that's going on. And you're not going to tell me that her causing our personal peak to be at 5 a.m. or 6 a.m. is going to put a burden on our electrical system. That there's a if we're going to have the residential demand, there's much better ways to do it. You've already identified six hours of the day where you want people not to uh to shift out of. So limit put the residential demand for the peak of that six hours is one way. Another way is what's the peak for the whole system of the month? What's that hour? Then identify the customers that drive that peak. And a third possible way is if uh set a goal, say you know what the the system capacity is. We and I understand we want to don't want to have to grow the system. We want to keep the system uh as it is or grow it as least as possible. Set a goal like 95% of our capacity, and every time there's an hour that exceeds that 95 capacity, then you identify who's the customers that are driving that high demand, and that way we will achieve this goal of shifting us away from our peak demand, driving the system to be ever larger. And that's my comments for today. Thank you. Thank you. Is there any other public comment in chambers? Is there any online? Thank you, Chair Gibson. For members of the public who are joining us tonight on Zoom, when Chair Gibson calls for public comment, please use the raise hand function. If you are participating by phone, press star nine to raise your hand. If you wish to make a public comment at this time, please raise your hand on Zoom. Chair Gibson, there are no hands raised. Thank you. That takes us to approval of the agenda.
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