Hurricane Power Department cites infrastructure gains, generator overhaul and recovering reserves

Hurricane Power Department staff presented a year-end report reviewing operations, capital projects and financial performance, telling the Power Board the department completed several capacity projects, finished an in-house overhaul of a major backup generator and is recovering reserve levels after high energy-market costs in 2022–23.

Staff said the 3 Falls substation was designed and brought online to serve the south end of the system and relieve load on the Clifton Wilson substation. The department estimated savings from building portions of the substation in-house at roughly $3.5 million to $4.5 million compared with contracting the entire project.

The board also heard details about Generator No. 6, which received a top-end and lower-end overhaul largely performed by department crews with limited outside machining. Technicians replaced cylinder liners, pistons and other components; staff said the in-house work saved an estimated $18,000 in labor compared with an external contractor and provided important hands-on training that should reduce future maintenance costs. A technician said, "The knowledge is invaluable," referring to the crew experience gained during the rebuild.

Ongoing capacity projects discussed include a series of phased transmission and distribution upgrades (referred to as Capacity 2, 3 and 4) to support growth and new development, with portions funded by developer contributions. Staff reported a likely award of a BRIC (building resilience) grant covering two-thirds (66.7%) of the cost for transmission upgrades on 600 North, work described as upgrades to a north-side transmission and a new south-side transmission to improve redundancy.

On resources, staff said the utility serves roughly 9,700 electrical customers and reported retail energy sales near 18 million kilowatt-hours in the reported period. The department noted it owns or purchases a mix of generation resources, including natural-gas-fired generator capacity (the in-house fleet amounts to roughly 10 megawatts of on-site natural gas generation), wind and small solar. Staff said geothermal project participation is being pursued in the Beaver/Milford area for small additional capacity.

Financially, the board was shown that reserves dipped during the high-price market period of 2021–23 but have been recovering after rate adjustments and deliberate restraint on nonessential spending. Department staff noted an internal cash-reserve policy target (about 10 months of budgeted expenses) and said current audit findings indicate the power fund meets the reserve target, though staff recommended detailed analysis before any rate adjustments or significant use of reserves.

Staff also outlined smaller completed projects (streetlight and holiday decoration refurbishments, Lone Pine extension upgrades to three-phase) and future work (yard leveling, overhead standards development, transformer upgrades at the client substation and continued generator maintenance cycles). The department emphasized communications-attachment challenges with third-party providers and said staff are preparing a formal attachment policy.

Board members asked for further breakdowns of operations and capital spending in future presentations and for more granular timing on grant-funded projects. Staff said they will provide additional budget and finance detail at an upcoming meeting.

The board did not take a formal policy vote on these items; this session served as an informational year-end review and guidance for staff planning.