DPU quarterly report: power costs rising, distributed generation surge before tax-credit deadline

The Department of Public Utilities presented its quarterly department report at the Sept. 3 Board of Public Utilities meeting, covering financials, reliability, staffing and distributed generation trends.

Major points

- Power costs: Staff reported the utility’s average cost of power has risen about 9.5% over the last five years. San Juan Generating Station retired and the utility has been “floating between market purchases,” contributing to higher costs.

- Rates and billing changes: Staff said the department plans to bring contracts related to a rate increase and the implementation of time‑of‑use and demand charges to the board in the coming weeks, with an implementation goal of July 1 next year.

- Drought impacts and non‑carbon mix: Staff said drought reduced hydro contributions (noted as a decline to about 19% in June in one slide) and therefore altered the non‑carbon generation mix. Board members discussed whether behind‑the‑meter rooftop solar should be included differently when measuring non‑carbon production.

- Distributed generation applications surge: Staff said a wave of interconnection and distributed generation applications arrived ahead of a federal tax‑credit expiration on Sept. 30; staff is processing applications and expects the build‑out rate to slow after the tax-credit deadline.

- Reliability and outages: Staff reported generally good reliability for the fiscal year but noted challenges including a transformer outage in White Rock and the effect of some upstream events. Board members asked staff to present outage metrics separate from upstream events so comparisons with peers are consistent.

- Revenues and sales to LANL: Board members questioned a sizable variance between budgeted sales to Los Alamos National Laboratory and actual sales; staff said the biggest reason was the Lance (plant) not running near full capacity for the past two years.

- Staffing: Reported new hires (apprentices in power production), a shared data analyst for conservation/PR/administration, promotions through apprenticeship or degree advancement, interns, and several retirements.

Ending: Staff offered to bring more refined metrics and definitions (for outage metrics and non‑carbon accounting) in future reports and said minor revisions to presentation format are planned for next fiscal year.