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Electric director outlines $7M AMI plan, hedging approach and capital needs as rates face modest rise
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Summary
Electric Director Paul Waddell described the utility's FY2026 plan: a large AMI (advanced metering infrastructure) project estimated at $7 million, continued conservative power-supply hedging, $10.5 million in capital (including transformer replacement and substation work) and an expected modest rate increase tied to a previous rate study.
Paul Waddell, the city’s electric director, told council that electric revenues are nearly entirely rate‑driven and that the electric fund is budgeting conservatively given market volatility.
Waddell described a planned advanced metering infrastructure (AMI) program with an estimated $7 million price tag currently scheduled for a future fiscal year. He said options exist to phase or stagger procurement but noted scale purchasing yields unit price benefits: “If we commit to the purchase of all the meters at 1 time, we're gonna get a cheaper price per unit because of scale.” He said phased implementation creates operational complexity for billing and customer service because part of the system would operate differently from the rest during a transition period.
On power supply and risk management, Waddell said the utility hedges a large portion of future power purchases and budgets conservatively for market volatility; recent years produced underspends versus budget that gave some flexibility. Council requested updated percentages for hedging and whether hedging could be increased while markets are low.
Waddell listed the electric capital program (about $10.5 million) and identified major projects including transformer replacement at a substation (about $2.4M), meeting-house-branch work ($1.4M), foundation stabilization ($900K) and an annual allowance for new development ($2.4M). He said power-purchase budgeting and hedging choices could be adjusted to help fund a large AMI purchase if council wished to accelerate the project.
Waddell also described revenues from tank/antenna leases and pole-attachment fees as small but helpful non-rate revenues. He said prior rate studies recommended increases carried forward into the FY2026 proposal; a customer-impact figure presented during the hearing was corrected by staff to approximately $15.15 per month at a 1,000 kWh usage level rather than the $24 figure shown on an earlier slide.
The AMI, capital, hedging and rate decisions are part of the proposed FY2026 budget discussion; no final rate adoption or contract award occurred during the hearing.
