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Budget correction flips utility forecast to surplus; hydrogeneration estimate climbs to $1–1.2 million
Summary
Staff told the commission a packet error on purchased power was corrected and shifted the combined 2025 projection from a deficit to a roughly $2 million positive net position; hydrogeneration capital estimates have risen, with a single generator now estimated at about $1–1.2 million.
The Brainerd City Utilities Commission heard a finance update Oct. 28 showing a material correction to the packet numbers and fresh capital estimate pressures on hydrogeneration.
Finance manager Danny Lock said a formula error affecting purchased power was corrected in the handout distributed at the meeting, a change that moved the electric department’s 2025 projection from a deficit into a combined net positive of roughly $2 million across departments. "That error was related to purchase power which just then affected the bottom line on the electric department and then the combined as a whole," Lock said.
Staff also warned that vendor and engineering estimates for a hydrogeneration project have proven difficult to obtain amid supply‑chain and tariff uncertainty. The most recent engineering feedback raised costs: "the generator costing around that $750,000 just for the generator is now projected at the one to $1.2 million," a staff update said.
On the 2026 operating budget, staff presented totals of about $39.7 million in expected utility revenues and roughly $39.6 million in expenses, leaving a modest positive position built on planned rate adjustments effective Jan. 1. Staff noted the electric division still shows an estimated $245,940 deficit in the draft, while water and wastewater both show small surpluses.
Lock said the utility is on track to present a final budget to city council in early December per the charter and that the new public utilities director will be asked to help with capital planning and vendor coordination.
Commissioners pressed staff on vendor timing and the impacts of federal funding delays to customer assistance programs; staff said the Minnesota Department of Commerce expects LIHEAP funds to arrive later than usual this year, likely in December, and urged customers to contact the utility to make payment arrangements to avoid disconnection.
