Finance report: reserves near record levels; staff propose $3.9M in FY26 capital and note supplemental energy impacts

Bettina Brown presented the utility’s supplemental and February financial statements on March 10, explaining that reporting runs one month behind and the packet reflected January activity. Brown said weather-driven supplemental energy purchases caused variance in the month but that MEAG’s current-year wholesale cents-per-kilowatt-hour was favorable (presentation stated 6.18¢ vs. the budgeted 6.43¢), which produced a benefit to the utility’s wholesale costs.

Brown reported off-system sales of approximately $794,000 for the month and said year-to-date operating revenues were roughly $7 million higher versus the prior year. The board was told that excess reserves stood at $30,700,000 — the highest level reported to date — and staff expect to propose approximately $3.9 million of capital funding in the FY26 budget draft to support water and wastewater projects.

Brown addressed questions about using surplus reserves, saying the utility did not intend to use more than $5,000,000 of the surplus for capital improvements at present and that projections remain under review. She also reviewed unit outages at MEAG plants and described expected refunds and settlements tied to previous nuclear-related deposits that contributed to projected year-end returns.

Next steps: staff will present the first draft of the FY26 budget next month along with assumptions supporting capital recommendations.