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DME proposes 3% rate rise as PUB probes data‑center risk and fund strategy
Summary
Denton Municipal Electric proposed a 3% base rate increase and a FY27 budget that relies in part on large-load customers; the board pressed DME staff on contingency planning, fund balance targets and the council work session on data centers scheduled for Aug. 4.
Denton Municipal Electric staff presented a FY27 operating and capital budget that includes a proposed 3% base rate increase and a pro forma showing $499.9 million in revenue and $487.5 million in expenditures. Staff also proposed a new electric planning and inspections business unit and noted changes to purchase‑power forecasts. "This will be our 1st shot at membrane bioreactor filtration..." (note: technical projects later in the work session).
Board members questioned the fiscal exposure if large‑load data center customers reduced or stopped operations. A long discussion unpacked how large‑load revenues have been used to build a protective fund balance (staff cited an aspirational $200 million target set after Winter Storm Uri), how the large‑load ECA and collateral are structured, and how staff would manage forward power purchases if a customer left. Staff emphasized that projected net income from large loads has been directed to fund balance and not recurring payroll. The board voted to recommend adoption of the electric rate ordinance and to recommend approval of the DME FY26–27 budget; both motions carried unanimously.
