Lansing Board of Water and Light reports clean audit, answers council questions on bond use and clean energy plans

The Lansing Board of Water and Light told the City Committee of the Whole on Feb. 10 that its fiscal-year 2024 financial statements received a clean audit and that it continues to pursue a mix of projects to meet state clean-energy requirements.

Scott Taylor, manager of the utility’s finance and planning group, said Baker Tilly conducted the audit and “we had a clean audit. We received an unmodified opinion, which is the highest level of assurance an audit can provide, and there were no findings or recommendations.” He said retirement plans included in the statements are fully funded.

Why it matters: The utility’s financial posture affects its ability to finance capital work for aging infrastructure and for new energy projects. Council members pressed the utility for specifics about how recent borrowings and capital spending support the city’s clean-energy targets.

Taylor told council members the utility issued $365,000,000 in revenue bonds in January 2024; the bonds supported investment in new energy, paid capitalized interest, and refinanced portions of earlier bond series. The refinancing produced roughly $5,000,000 in present-value savings, he said. He also described a year-over-year revenue decline—$449,000,000 in 2023 to $417,000,000 in 2024—attributing the drop primarily to wholesale market prices and generation changes; net income for 2024 was about $9,900,000, Taylor said.

Councilmember Jackson asked whether the roughly $191,300,000 listed as capital expenditures in 2024 included projects to meet the city’s clean-energy targets. Taylor said “approximately half of the capital expenditure was towards our new energy program, and the other half was towards our ongoing capital, which is replacement of equipment in our current plants, lines, etcetera.” He told Jackson the bond proceeds are “eligible and usable for clean energy, but part of it is not all the funds went directly towards that program” because of tax and credit considerations; that flexibility, he said, allowed the utility to save roughly $4–5 million in tax credits by applying bond proceeds strategically.

Taylor and other utility staff also described generation mix and regulatory reporting: the utility generates roughly 53% of its retail and wholesale sales internally and is preparing documentation for state reporting (the utility referenced the Michigan Public Service Commission reporting process). Taylor said the utility expects to reach about 53% new/renewable energy by 2030 with projects either under construction or under contract.

Public comment before the presentation raised broader energy-source questions. Resident Loretta Stanaway urged the board to discuss alternatives such as hydrogen, hydroelectric, atmospheric water harvesting and heat-recapture systems; she asked when the board would present information on those technologies.

The presentation packet, including the full audited financial statements, was left with council. Taylor offered to provide the bond structure documents on request to show how proceeds were to be applied.

What’s next: Council members asked staff for more detail on specific projects funded from the 2024 capital program and for the bond structure documentation. The packet attaches the audited statements for FY 2024 for council review.

Ending: Council thanked the utility team for the presentation and moved on to the next agenda item.