Board hears preliminary electrification financial outlook; staff flags negative FY26 cash and bond timing options

Joanne (staff member) presented a preliminary, draft financial outlook for the county's electrification action plan and the electric distribution fund at the Board of Public Utilities on Aug. 6, saying the department starts fiscal year 2026 with negative cash and that a 10‑year capital improvement plan (CIP) of about $48.8 million is the working assumption.

Joanne told the board staff prepared two scenarios. Scenario 1 used the existing sales forecast and the budgeted bond and rate assumptions from the fiscal‑year materials; scenario 2 shifted some projects and proposed delaying bond issuances so the county could use existing capital funds earlier and issue two larger bonds later (for example, waiting to bond until 2030 and 2032). Scenario 2 also modeled higher ongoing rate increases in later years (moving multiple out‑year increases from 2 percent to 5 percent) to strengthen cash position before bond issuance.

Why it matters: the plan and the bond timing affect customer rates, reserve policy and the county's ability to pay for substation and feeder upgrades tied to electrification and growth. Board members probed assumptions about timing, Uniper settlement funds, rate paths and project prioritization.

Uniper settlement and revenue transfers Joanne and other staff said part of the financing picture is transfers from interest on an Uniper settlement reserve. Staff identified a planned annual transfer of $2 million from those funds into electric distribution in the model (presented as transfers in through about 2033 in the 10‑year view). Staff said the full Uniper settlement and interest treatments are split between electric production and distribution and that some Uniper funds continue to cover production reserves.

Bond timing, rates and projects Staff presented the CIP list and the prioritization that emerges from the electrification study and internal assessments. Key projects discussed included Eastgate substation design (moved up for earlier design work), SCADA upgrades and modeling, the EA‑4 line reconstruction and other feeder and relay projects. Staff said some distribution projects will be necessary regardless of electrification because of asset age and reliability concerns.

Staff and board discussed the recommended rate path. The model shown in the packet used the board‑approved 2026 increases (9% in 2026, 8% in 2027) and then multiple years of 5% increases in scenario 2; staff said the scenario assumptions were illustrative and that time‑of‑use and demand modeling — planned for the next budget cycle — could materially affect revenue forecasts.

Staffing and project management Joanne and other staff asked the board to consider creating or reclassifying an electric distribution superintendent/engineering project manager position to carry the increased workload of electrification projects and ongoing repairs. Several board members and managers said a superintendent or engineering project manager would assist in design, procurement and coordination, and staff said the position would be routed to council for formal action if the board indicated support.

Board feedback and priorities Board members pressed staff on several points: the need for a technical project plan that sequences substations, feeders and other investments; whether the electrification consultant's assumptions about equipment life and load growth had been reviewed internally; and whether the county could defer or mothball some plant investments if generation remains limited. Staff responded that they have reviewed the consultant report, are aligning project priority with identified system limits (for example, the 20 MVA limit at LANL‑fed substation), and are preparing additional load‑forecast and scenario work for the FY27 budget cycle.

Data and modeling needs Multiple members requested more granular metering and billing data — and quicker SCADA and billing improvements — to understand peak demand by feeder and by community (Townsite vs. White Rock) before committing to major bond work. Staff said the billing and SCADA upgrades are in the CIP and that better data will inform project timing and the council presentation staff plan to deliver.

Next steps Staff said they will refine the financial model for the FY27 budget cycle, incorporate time‑of‑use/demand forecasts once metering data is available, and bring a refined staffing proposal and a council presentation showing a clearer, prioritized project plan. Several board members urged staff to present a concise council package that separates baseline asset replacement (work the system would require anyway) from incremental electrification‑driven expenses.

Ending The board did not act on the staffing reclassification at the meeting; staff said they will return with formal proposals, supporting job descriptions and the revised financial model in coming months ahead of the FY27 budget cycle.