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LCRA board approves FY2026 budget and capital amendments, authorizes up to $500M in transmission bonds and contract increases
Summary
The Lower Colorado River Authority board on June 17 approved a $20 million increase to its FY2026 operations budget, a roughly $19.3 million capital increase, authorization to issue up to $500 million in transmission refunding bonds, and several contract spending increases; staff said the additional O&M expenses are covered by customer revenues.
The Lower Colorado River Authority Board of Directors on June 17 approved a set of staff-requested amendments that raise the authority's FY2026 operating and capital budgets, authorize transmission bond issuance, and increase several existing contracts.
Don Reed, speaking to the board during the action-item portion of the meeting, said the third-quarter financial forecast shows the authority expects to exceed its operations and maintenance budget by about $20 million, or roughly 3 percent. "The most current forecast shows that we are going to exceed the budget by 20 million or about 3% and that's due to higher non-fuel expenses," Reed said, and asked the board to authorize an amendment increasing the O&M budget from $591.4 million to $611.4 million. Reed stated the additional expenses are "fully funded by customer revenues." The board approved the amendment by voice vote.
Staff also requested and secured approval to raise the FY2026 capital spending budget from $285.7 million to $305 million. Reed told directors the capital increase — about $19.3 million, nearly 7 percent — stems from new projects and higher spending in wholesale power and telecommunications support, partly offset by lower-than-budgeted water spending. Staff said the change "will not have any impact on current LCRA rates." The board approved the capital-plan amendment by voice vote.
On financing, David Smith described a companion item authorizing the LCRA Transmission Services Corporation to sell up to $500 million of transmission refunding revenue bonds as outlined in the FY2027 business plan. "This is a companion item … to go sell up to $500 million of transmission bonds," Smith said. Directors approved the 52nd supplemental resolution by voice vote.
The board also approved contract modifications presented by Matt Chavez. Chavez said supply chain staff requested adding $30 million to each of three construction contracts with Gutierre Falenberg Construction and HCS — raising each contract to a $40 million not-to-exceed amount — to support planned facility upgrades and rural work. He also said staff requested an additional $20 million for Prescidio's contract for data center infrastructure, bringing that contract to $70 million, citing increased project demand and shifts in pricing. The board approved the contract increases by voice vote.
The meeting minutes record voice votes for the items; no roll-call tallies were provided in the transcript. After taking the actions above, the board recessed to executive session and returned to adjourn at about 2:21 p.m.
Notes: The transcript indicates the O&M increase is funded by customer revenues and staff said the capital amendment would not affect current rates. The meeting did not include a roll-call vote record in the provided transcript.
