Committee approves wheeling agreement allowing county water to flow through city pipes at $2.40 per 1,000 gallons

The Finance Committee on Jan. 13 approved a wheeling agreement with Santa Fe County to permit county water to be transported through the City of Santa Fewater transmission and distribution network for delivery to county customers.

Under the agreement the wheeling fee was set at $2.40 per 1,000 gallons. Staff said an interim arrangement had charged $1.40 per 1,000 gallons beginning July 2021; the new agreement establishes the $2.40 rate and provides for billing of the difference back to the interim period.

Water Division Director Jesse Roche and staff explained the wheeling arrangement is an operational necessity where county customers cannot be served directly by the countys own transmission lines and must be reached by passing water through city infrastructure. Officials said the agreement implements an industry-standard methodology to review and update the wheeling fee as part of the city's regular cost-of-service studies; staff noted the fee can be updated as studies are completed (the committee heard the fee could be revised every three years or more often by agreement).

"Wheeling is essentially using our pipes to get water to their customers," Roche said, describing Hyde Park Estates as a representative example.

Councilors expressed concern about perpetual or hard-to-terminate agreements. Staff said the wheeling agreement is linked to a broader 2016 water resources agreement that defines how city and county utilities operate; staff characterized the linkage as a practical reality of two separate utilities sharing infrastructure and said the wheeling rate will be subject to future cost-of-service updates.

The motion to approve the wheeling agreement passed by roll call: Councilor Cassett, Councilor Lindell, Councilor Lee Garcia and Chair Romero Wirth recorded votes of yes; the item passed.