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Electric fund staff correct PCA accounting and Stantec model shows lower near-term base increases
Summary
Commissioners were told a PCA reclassification error raised purchase-power costs; Stantec's modeling shows that after staff cuts and lower admin allocations, modest base increases (3% in the model) could reach minimum cash by 2028 absent supplementals, but scenarios set earlier this year (6%+ plan) would reach targets sooner.
Lake Worth Beach finance and utility staff told the commission they had found and corrected a misclassification in the electric fund that underreported purchase-power (PCA) costs in the budget book.
"On page 297 in your budget book, we noticed the operated expenditures for purchase power should have been 16,100,000 instead of 11,300,000," Candice Dale said, describing three GL reclassifications (FP&L transmission cost, Stanton PCA, Fampa solar) that raise the fund's purchase-power line. Staff said corrected handouts will be distributed and the budget book updated before the next workshop.
Stantec, the city's consultant on utility forecasts, ran multiple scenarios for the electric fund. In a baseline model that excludes supplementals and reflects staff's line-by-line expenditure reductions, Stantec projected that a modest sequence of base-rate adjustments (the model uses a 2.5%–3% base-rate path in early years) would let the fund reach a six-month cash target by FY2028. The consultant warned that including recurring supplementals and a $46 million CIP for the electric system (planned borrowing) raises near-term financing needs and could require larger increases under some scenarios.
Commissioners pressed for comparators and asked Stantec to re-run the models against last year's rate-path assumptions (the 8%/6%/5% plan adopted for FY2027) so the body can compare the earlier policy path to the staff-trimmed projections. Stantec agreed to circulate a supplemental set of scenario comparisons showing the earlier rate path against the current recommended scenarios before Workshop 2.
The commission did not adopt new electric rates at the workshop but directed staff to provide corrected PCA numbers, the Stantec comparisons and a clear set of options ahead of the statutory public hearings in September.
