Transportation Board - Regular Meeting

I'll call to order this 03/18/2026 meeting of the Board of Public Utilities. Welcome everyone to another evening of fun and frolic. We thank you for participating. Our first order of business tonight is public comment. Do we have any public comment? I don't see any in chambers. Do we have any online, Kathy?

Thank you, chair Gibson. There is at least one person online. If anybody online would like to make public comment via Zoom, please use the raise hand function. And if you're participating by phone, you can press 9. Does anybody wish to make public comment? Nobody. Chair Gibson. Great. Thank you.

Takes us to approval of agenda. The chair would entertain a motion to approve the agenda.

Sir, I move to approve the agenda.

I'll second. Moved and seconded. Any discussion? All in favor of raise hand? Opposed? Motion passes four to zero. That takes us to the consent agenda. I didn't hear anybody wanting to make changes. You're here's your last chance. Nope? Okay. How about a motion to approve the consent agenda?

Okay. I move that the board of public utilities approve the items on the consent agenda as presented and that the motions and the staff reports be included in the minutes for the record.

Second. Okay. Moved and seconded the consent agenda be approved as presented. Any further dis any discussion? Seeing none, Kathy, would you please call the roll?

Member Hollingsworth? Yes. Member Stromberg?

Yes.

Member Hefner? Yes. And member Gibson?

Yes. Thank you. Motion passes four to zero. That takes us to item oh, we're already halfway through the budget or through the agenda. We're maybe more than halfway. We're already at seven a, which is approval of the DPU FY 2027 budget. Joanne.

Good evening, chair and members of the board. So we're here for to get approval for our f y twenty seven budget. It's a two year budget, so it's f y twenty seven and projections for f y twenty eight. So we've had some changes since we came in February. Richard has page one thirteen up, and that shows our overall DPU expenditures for FY '27 is $94,688,744.

That's a decrease from what we presented in February, which was $100,071,991. That's about a 5% decrease from a month ago. So I think we'll go through some of the changes that we made from February to March, and please ask questions as we go through. So some of the changes were production. Some of the costs for purchase power was double counted, and those were for our owned resources such as Abiquiu, Alvaro, and LRS.

So we've made that correction to the purchase power. We've we had all of the funds were hit for admin allocation, and one of those costs was $1,800 for engineering that we didn't have for uniforms that we had budgeted for some uniforms for them. So that was added and reallocated out to admin. Some of the other costs and admin allocations that we needed to adjust was our meter reader supervisor is they're working on a promotion for him. So we included his additional salary with that promotion for f y twenty seven.

Another big change in the budget was in IDCs. It was for our Vactor, which in February, we had budgeted 450,000. And Clay has been working with procurement and the different places that you can purchase a Vactor. And it's looking like it's gonna be about a $100,000 more. So we increased the 450,000 budget for the Vactor to 550,000.

And so those costs are being distributed between gas, water production, water distribution, and wastewater treatment plant at a percentage in the same percentage we were doing for the 450,000. Let's see. We some of the ED's capital costs have changed. For '27, we increased it by a thousand. And so it's oh, sorry. A million. Sorry. A thousand. That would be great. Right?

So thank you for your correction. So that is for a grant from the state of New Mexico for the EA power EA four power line, and we also decreased it by 500,000. We removed the escape design that was originally presented in February, so that has been removed in the capital projects for ED. A small change was made in the gas. It it it didn't change the bottom line.

We just moved 6,600 for the the study that UNM is doing, the zero natural gas, we moved it from cost of gas to distribution. I didn't I don't know why it was in cost of gas, so we moved it to the right place. So just it just moved those two line items. Let's see some of the other changes, which oh, wastewater. We increased our budget in treatment $22,000 from February to now because there is some increased testing that they're required to do now.

And so we had to add more expenditure authority for that testing. And those are really the biggest changes in expenditures. We did have some changes in our revenue as well from February to now. EP had several changes in their sales to DOE, electric distribution, Sandia and Kirtland and Foxtail Flats and economy sales. And I'm not comfortable speaking on those ones.

So if you would like more explanation, I can have Ben Ulbrich kind of discuss why those changes in revenue happened. In ED, we increased revenue by 1,500,000 for the grant for the grant for the e a four project. One of the other changes we're making in revenue, and this will come with our rate increases that are are rate ordinances that were coming for water, is our potable sales to Lantel for n three b and HRL. Currently, we're charging them bulk or wholesale rate, and we should be charging them retail rates. So we're going to make that change in the new ordinance.

So we did consider that as a change in revenue, so we changed the revenue there. And then by increasing some of the revenue, it updated our interest in utility reserves. So those are the biggest changes in f y '27. When I was working on trying to summarize the '28 and got a little busy. So in '28, there was a decrease in purchase power again for the same reason that we had in '27.

Admin allocations were the same. Pretty much all of the changes are very similar to '27 to '28. In AD, we did decrease capital by $6,000,000 because we are moving several of our project what we brought to use capital projects in '28. We're taking three of those into '29. And then the e a four project, it was budgeted at 4,000,000, and it's gonna it's now at 2,500,000.

So that's where that big change in capital comes from an ED. One of the other changes that we had in gas was the cost of gas. So we do have a decrease in the cost of gas by 176,000. And that's mostly because when we calculated the cost of gas, we did it at the 9% that we were looking at for the increase in rate versus the 3% for just overall cost. We we we miscalculated that by 6%.

And, again, in wastewater, we added another 22,600 for treatment. And those aren't really the changes that we made from '27 and '28 from what we presented in '26. So is there any questions with that? Because then I I or with the budget and its question, then we could go to the gas.

Eric. Yeah. Thanks, Eric Gibson. You mentioned testing. I think you mentioned $22,000 for testing. Is any of that testing I know some years ago, whenever we talked about COVID testing of wastewater, is that testing, like, in in that type context?

That's a good question. I found out on Friday when we were at the wastewater treatment plant that we are still testing for COVID. But Clay can maybe explain the increase in testing that we're required to do and why we're adding additional funds.

Throw me under the bus there. So we we had a change to our our the so because we release water into the environment, the NMED regulates the water quality. And they've with the change in the plants and everything that so the these these Discharge permit. Yeah. Discharge.

Yeah. Sorry. I'm trying to think. The discharge permit is renewed and re it's re reviewed and renewed every five years. So our our former regulator retired, and he always would look at all of our numbers and make sure that we were meeting all of the nutrient standards and everything.

And so he saw that over the course the average over the course of the five years always met the standard, so he reduced our testing rates down to a certain point. Once he retired, somebody else in District 6 put us in a different backup to a standard because every once in a while, we might see more than 1,000,000 gallons going through the Los Alamos Wastewater Treatment Plant. Usually, that's during stormy events. And so, generally speaking, it's it's always on average between seven hundred and fifty and eight hundred and ten thousand gallons a day, and that would put us at a lower standard. But every once in a while, we see more than a million come in, and they just, you know, went by the book and put us at a new testing standard.

And so we have to do that for five years, I guess, to show that we are always gonna meet the standards for a 1,000,000 gallon per day plant.

So, Clay, some of that testing PCBs content?

No. They don't these are these are more the all of the nutrient profile that are standard in wastewater treatment plants. There there there aren't any new constituents yet.

Okay. Thanks. Other

questions? Joanne, I've got one. Sure. The UNM study. Uh-huh. I think is gonna be done in early FY twenty seven. Why does it still have financial implications in '28?

I think we just left it in there as a flat budget.

I can

explain it.

Okay.

I mentioned to you that the professor on the NMSU went on a sabbatical, and he can't charge his time during this semester. Their semester follows basically our fiscal year. So we had to carry that forward. And their deliverable's the summer of twenty sixth, so that means it can roll into August. So we needed a way to roll that money forward. All the way to '28? It should be in '27, not '28.

That's my was my question. Okay.

Why would

you It should

be Okay.

We we we carried it over into '28, but we can adjust that when we work on '28 budget. We can take that out.

Yeah. Is it duplicated? Is it also in '27? I mean, it's gotta we gotta pay them some

time. We have it in '27. We have it budgeted for '27

Okay.

And '28.

Oh, yeah.

So Yeah.

'28. Yeah.

But even with the carryover, we the the carryovers don't carry over the the so we we still need it in there. I was like, expenditure, I guess. Or I I don't know. Do we? I don't know.

It was just a carryover into '27 was the intent.

Oh, was the intent? Okay. So we did. I can take that out of '27 and '28.

Just for '27.

Just for '27? We want it in '28?

No. Okay.

Because it's in '28 as well.

Yeah. We Okay. Should remove from '28.

Okay. Yeah.

Okay.

We can do that.

Alright. Thank you. Anything else right now? Okay. Go ahead.

And then, do we wanna go into the gas rates, or do we want to

If the board has no other questions about the overall budget summary, it's a you know, here's our $96,000,000 budget.

So because we've already spent how many hours on it Yeah. The last two meetings.

Right.

Well, I'd like to point out too, I think board member Stromberg asked me last or about two weeks ago about the overall of the department. So we did create if you go to page one seventy three. So we didn't forget. So we did the ten year financial forecast for the joint utility fund. So we we also, instead of just having individual, we did the a ten year for the whole joint utility fund to kinda see the health of the entire department versus each fund. So that's kinda new, and I wanna point that we we did kinda look at that. So thank you.

So I guess you can proceed, Joanne.

Okay. So now we're going to move on to some gas rate options because we are gonna be or I will be presenting or introducing some rates for gas and water in about two weeks on April 1, I believe, is the date. So we are looking for your guys' guidance on how you would like for us to pose the gas moving forward. So we have three options. And so we'll go to option one.

Option one is just a 9% increase kinda how it's always been done. We increase the service fee and the fixed rate at that 9% that is showing or whatever percentage is showing in the ten year forecast. So by this option one is you're looking at $15.53 for the service fee in '27 and $16.93 in '28. And the fixed rate is so okay. So the service fee, we're looking at covering the IDCs and admin charges.

And so at that rate, we are covering those costs. The 9% increase in the fixed rate from 34 to 37 in '27, we're looking at covering with the fixed rate. We need to cover operations. And and then that rate will go to 40¢ and 28. And the variable rate, we left at 42¢. That's a five year San Juan index average. So that's used across the board on all the options. If we go to the next page, and at the very end, I'll show you the different rates in comparison. So this is a ten year forecast. This is what you have, I believe, in the budget book today.

It's it's just showing that we don't hit positive cash flow enough to start funding our reserves until about 2033 and not being able to fully fund it until 2036. So that's just kind of where we started a month ago. If we go to the next page, we're gonna look at the debt coverage ratio. So it's showing at one point o three and twenty seven and one point two nine and twenty eight with this rate structure. And so we'll show this debt coverage ratio throughout with the different options here.

We go to option two. There's no changes in the service fee. It's still the 9%. We do the same. The fixed rate is at 9% and the 42 per therm.

And then we're presenting a 25% gas recovery rate similar to what we did about in 2023, adding an additional fee for about two less than two years to make up for that $2,800,000 deficit that we have currently in the gas fund. So that would get us to break even with that deficit and then start building some cash. Even with with this particular option, we could start we begin wouldn't start funding the reserves until about 2033 and fully funding it in about 2036. So option three oh, I'm sorry. Debt coverage ratio.

With this debt coverage ratio with this particular option, it moves from one point o three and twenty seven to 1.39, which meets our 2.3 objective for strategic planning. And it also brings 28 to 1.51 versus the 1.29 in '28.

Joanne, I just wanted to interject to the board to notice. When we have some cash reserves and cash balance, we're allowed to do our financing, you know, because we get the debt coverage ratio. This this is a challenge we had between option one and two. It's just having cash, getting that that negative balance in the gas fund is impacting our ability to borrow money in the future. So it it this model really showed it jumped out when finally got the result. So I wanted to point it out that throughout, you know, we're above the 1.3 even next year because I think we had offered last meeting that we wouldn't make it next year. So

And option two was included in the board packet, but then we since the board packet was printed, an option three was presented to us, so we're gonna present that. So that's not in the board packet. So option three is a little bit different, and it's a I it's well, it well, I'll show you. So the service fee does not change again. The fixed rate is where the biggest change is.

So we'd be going from 34¢ per therm in the fixed rate. It's about a 40% increase to 48¢ and 27. And then we increased it about it would increase it 10¢, but it says 59¢ because of some rounding issues. So I was trying to make all my numbers match. So it's about 11¢ increase in '28.

Let's see. The variable rate is still 42¢. Now if we go to the next page, this is where we can kinda see a difference with option three in our cash flow. In this option, we would be able to start funding our reserves in 2030. We would fully fund it in 2032, and then we still have cash in 2033 on, which would allow us to fund a retirement fund for the gas if that's what you guys choose to do.

So it gives us an ability in a ten year to possibly fund the reserves and retirement fund for the gas. And then looking at the debt coverage ratio, it it looks a little bit different, but it still meets that 1.3 for funding. And it's 1.26 in '27 1.47 in '28. And then if we go to the next page so we created this summary of this is just gas at 70 therms because we did re we have been showing our typical bill at 75 therms. And so we recalculated residentials, and it looks like on average, they're using about 70 therms.

So we reduced that from 75 to 70 therms. And I took the current rate in '26, and it's 70 therms. The customer the residential customer is paying $67.45. Now the next section shows option one, two, and three. Option one is just a 9% across the board.

A rate a bill of gas for $70.83. The option two is with the gas recovery of 25¢. The bill would be $88.33, which is a 23.6 increase from '26. And then the option three is the 40% increase on fixed rate, and it at 70 therms, the bill is seventy eight fifty three or 14.1% increase from the 26 rate. And then in '28, the same options, the same idea.

You're seeing a 4.7% increase with a 9% across the board from 27 to 28. Option two is a $91.83 per bill, a 3.8% increase. And option three is $87.63, and it's a 10.4 increase. And you're seeing the subtotals are kinda showing you what the cost is per therm. So with option three, you're going from 90¢ per therm to a dollar 1 per therm.

And so kind of the end of the presentation. I'm just looking for guidance from you guys. So if there's any questions, I'm happy to answer.

Matt? I have a lot of questions.

But I'm sure. It's a lot. I hate

to ask on the slide just before this. I know better. But is there an easy explanation for why the debt coverage ratio for option three in 2030 goes lower than option two.

It's the it's the rate increase.

It's also when the bonds are issued in the joint utility fund Okay. When we issue bonds. Timing.

That's why. Okay. Yeah. I've heard

It's when it's it's a combination of building cash and issuance of bonds. And that's how it rebalanced.

And I guess my question is, we're building cash in both option two and three.

For

option two. Right? But two, like In option two, you build all you get all the cash in two years Yeah. And go forward.

The the reason for

that gradually increasing. Yeah. And so then there's a little bump when we take out bonds.

And the phasing with bonds means

it dips down

there. Okay. Okay. Thanks.

And, board member, he's other part of that is from option one to option two, if we look at option one in 2930, we're looking at a 7% increase. And in option two, it's going to 5%, which is, again, decreasing the revenue. So that's why that's a little bit different because we did it I didn't mention, but we did kind of adjust some of the rate increases on the different options. So even in option three, we're looking at, like, the the large increase in '27, 5% in '28, and then we went 3% across the board for the remainder. Instead of doing really high increases, we can maybe kinda level it out a little bit.

Okay. Thanks.

You're welcome.

Sorry. Other questions? Either everybody is overwhelmed by it, or it's perfectly understandable. I'm not sure which.

It's lot. There's a lot of thought put into this, so I can imagine it's a lot of thought to think about it as well.

The well, most of the board's only seen this the first time

Yes.

Right now. Yeah. Option three, we just finished about yesterday and then put the presentation and finalized everything today. So I apologize.

No need for apology. We thank you for reacting quickly. You're welcome. Put another option on the table. Matt? I'm more trying

to think. It's too early for questions. But I go ahead. You know, I'm trying to digest option three, and I'm really intrigued by it. And you said some of the motivation for it was thinking about the need for building a reserve to consider the long term future of the gas system.

Right.

Was that the main motivation?

I mean

I I I think partially. Yeah.

Yeah. Let me chair Gibson and I met after the weekend, review the packet, said, is there some middle ground proposal that we could come up with for an option three. So that's what you're seeing tonight for the first time. The the challenge that we're having is, you know, we have a meeting tonight, and then in two weeks, we gotta have a introduction of a rate ordinance and advertise it, etcetera. So we wanted to have enough information to look at these various options and see which which direction the board's leaning towards.

I personally feel like option one's not good because we know that's impacting our our goals and objectives, when it comes to the finance debt coverage ratio as well as our reserve targets. But ops between option two and three, they both make good progress towards that end. One, it only gets us there at the end of ten years on option two, and then option three gets us there within six years. And, also, I know there's been some discussion we need to consider a retirement reserve. That makes some headway to move in that direction.

I know, we haven't decided on that, but that when you're looking at a two year budget, we need to work we need to get our, books in order over the next two years. There's room to move those numbers around in the following years. So but I think it shows you a pathway that we could fund retirement reserves by being a little you know, doing some grad more gradual step up instead of just doing a recovery charge of 25¢ a therm. We're moving up to that 25¢ a therm over two years, and then we kinda hold it and run it through and build cash and reserves in within that six year period. And then additional cash that we could pledge towards, retirement reserve if that's what the board chooses or we pull back.

Although, technically, this is supposed to be clarifying questions time. Since Phil already started, I'll add a little bit in terms of philosophy behind going to or at least presenting an option three for consideration. I think I agree with Philo. Option one just isn't gonna cut it financially. Option two involves, one, kind of a a complex thing again, this recovery charge for two years, and then then the rate the comes back down again, which is odd.

We did that before or the that was done before. Some of us weren't here at that time. In in response to a market emergency that put us in a bad spot. This isn't really a market emergency. This is some planning we need to do.

The other side of that is option two would be a really big hit to the customer. You know, that's a big increase in one year, and it stays up there and then drops down again. So thinking, well, how can we avoid that peculiar two year charge and also make it a little more palatable perhaps to the customer? So we just put it in the standard rate structure instead of adding something else. I think that's the major reasons behind it.

Wasn't so much to provide extra reserves, but it does accomplish that or perhaps more more importantly in the near term, it gets the reserves up in approximately five years instead of ten years for whatever purpose we we need them for. This idea, to me anyway, of, oh, we'll catch up on the reserves ten years from now is not something we can put a lot of credibility in. I mean, we try. We we it's good to see the ten year plan and see what it what things what happens. But do I count on it quantitatively? No.

And sorry.

Go ahead.

Question, I guess. And the the the fact that the debt service coverage ratio goes below optimal for option three in later years, I think I saw that. Right? Mhmm. That's okay. I mean, so, like, the 1.2 in 2030. Anything else is good. Yeah. So first year. But

It probably tells me that maybe we need to do a smaller project and meet the goal.

Okay. Yeah. So you adjust other things.

Adjust all our ten year plans.

Yeah. Yeah. Yeah. You because it's somewhere else.

But I think it's at least it's in a positive territory. It's between the one and one point three because it

Yeah.

Some agencies are good with one.

Okay.

Others want 1.3 is most conservative side. So, it's important we show that we're getting there too. I

think the question being asked tonight is, in general, which way would we would which way would we like to go? Mhmm. Staff can work on refining numbers between and over the next week. I mean, they've got a whole week to do that before they have to put it into an a rate ordinance to for introduction. So there is a little time to tweak yet if desired, but it the real question is which direction do we think we would like to go.

Okay. So I like option three's ability to get to reserves up sooner. I think that's a very strong positive. I don't like option two jumping customer rates by 24% in one year. So that, even if it does drop down later, it just seems a bit of a shock that if we can avoid it, would be better. So I guess I'm personally leaning towards three for both fiscal responsibility and sticker shock. So

Before we go too far into the discussion, should ask for public comment here, then we'll unless there's any other questions right now. Seeing none, is there any public comment in in chambers? Please come forward. Give your name for the record if you don't mind. And

Sure. My name is James Wernicke.

I don't know.

This is, like, a tough pill to swallow, but I do know, like, things are just gonna get more expensive the longer we prolong it. So reluctantly support this, I guess.

Thank you. Is there any other comment in chambers? Do we have any online?

Thank you, chair Gibson. If anybody online would like to make public comment, would you raise your hand on Zoom, please? No one has their hand raised,

chair Gibson. Okay. Thank you. So we'll come back to the board for discussion. There's kinda two things going on here. One is is we need to approve the expenditure budget that's in front of us, and two is to give the staff some guidance as to which of the various philosophies we would like them to pursue for a gas rate ordinance. Not that anybody likes a rate ordinance, but it has to be done.

Matt? Jump into the discussion with that kickoff. Thanks. I think with regards to the expenditure budget, we've gone over it a lot of time. I appreciate all the work in it and all the explanations. So I I'm pretty comfortable with it. The only thing I'm still a little concerned with the FY '28 electric production investment in hydro, And I know we're queuing up discussions about that, but I'm concerned that we're looking at the 27, 28 expenditures, and that is part of the '28 expenditure plan. So I just wanna put an asterisk on that with with my concerns, and I I don't think we'll fix that in the next month or so. But just I wanna make sure we have that conversation. That's my my biggest concern with what I see in the budget.

And then about the options

for

the rates, I'll just agree with with Jen that I think option three is probably the best solution that think I'd wanna look at it a little bit more fleshed out. But I think, you know, if we get the a few projects tweak and get the the, debt coverage ratio up on 2030, you know, that's farther out. I think I think getting the reserve built up sooner in a realistic time period of five years rather than just saying we're gonna do it in ten years, that all appeals to me. So

Chair Oh, just just wanted to mention, we are going out for request for proposal for the hydro plants to do the condition assessment. That's gonna help us look at prioritization of the projects, so we can make those adjustments because there is investments there that we may not need to do, and that will also help this debt coverage ratio if we pull some things back. But and and also gonna consider, you know, a mothball type option at Alvaro knowing that the the BLM is not, able to renovate the dam as we had hoped or on any there's no schedule at this point. And then I do think knowing that piece and then all the other projects, we're gonna we have the ability to work on 2030 to get that that coverage in alignment by that one point. I think I think I wouldn't worry about that in this budget, but we can do do those CIP adjustments to get there on the when we get to the next two year budget when we go '29 and '30.

I'm pretty confident we can get there.

Still on the floor.

Thank you. Maybe I'll just follow-up with the I think the EP expenditures in '27 that we're approving are for some maintenance of the hydro plant. So I think that's good. I feel good with that twenty seven one. Right. So I think we just wanna caveat the '28 and and look at the studies. Mhmm. Perfect. Thanks.

Do do you have any comments, Eric?

You know, it's a tough one because I can see both sides of this coin. I'm really okay with either one. The 23 point six percent is is a hard pill to swallow for the public. I can but I I could really go either way myself. I that's one of my comment.

Well, I

I

lean fairly strongly towards option three because I think it's structurally more straightforward, easier for both us and the customer to understand if we just make a make rate adjustments rather than doing something that's outside of the normal rate structure, which we don't have any policy to cover. And the practical side is it's a it is an easier pill to swallow if it isn't quite so huge in next year. So I would prefer option three. Is there any other board discussion? Should we

do? And if we go

with option three, I mean, we we're gonna revisit this next year. Every year. We can do a sanity check and and see what's going on then.

Mhmm. Yep. We will have to we do revisit them every year. So

Chair, just one point clarification. When we do rate setting, we usually bring it in for a two year period. So it it coincides well with our two year budget planning so we can kinda see we're meeting our goals over we're achieving our goals over the next two years by getting that debt coverage ratio above 1.3. We get close. I don't know if we show if we go back one slide, I think we had the coverage ratio at 1.26 next year. Pretty close to three, but, you know, we're showing that we can achieve it, our goals, with this two year budget plan.

Are you planning any major bond issues or anything in 2027 So that that debt coverage ratio really matters then. It's more

Only what's in the budget currently. You know, we have, in the water and wastewater funds, we always program for bonds with the with the state. And but those are programmed already in your CIP budget. So, yeah, there are some, but not in the electric or gas funds.

Okay. I think we're ready for a motion.

Alright. Before we do that, I have a quick procedural question, I guess. Go ahead. Recommended action substituting gas fund option two, and we're updating that. I think, potentially,

that's the key. There's only a recommended motion. You can make any motion you want.

But if

you wanna substitute three for two, that's not a hard change

to make.

Just wanted to make sure that's Yeah. You're fine. Okay.

Remember, this is only recommended motion.

Right. Well, in that case then, I move that the board of public utilities approve the fiscal year twenty twenty seven budget substituting gas fund option three as presented and forwarded to council and forward to council for adoption. I further move that the board of public utilities approve the f y twenty twenty seven budget option as presented, forward to counsel for approval.

I second.

Okay. Any further discussion? Seeing none, Kathy, please call the roll.

Member Hollingsworth? Yes. Member Stromberg? Yes. Member Hefner? Yes. And member Gibson?

Yes. Thank you. Motion passes. Four to zero. Thank you, Joanne.

Thank you. Thank you everyone for your kindness and all your questions. It was was fun.

Thank you for Thanks. Doing running a lot of numbers and assembling them in a manner that we could actually understand.

Thank you. Yes.

At least with some help.

Thanks.

The I know your job isn't done, but a big part of it is here. Okay. That takes us on to approval of modification 26 to extend the contract term of the ECA, page two twenty six in our agenda doc. And I think that is no. That's Ben. Okay. Good evening. Good evening, Ben.

Sure. Thank you. Members of the board. I came to you three months ago with ninety day extension to the ECA, and I'm back here before you again requesting an additional what are we at? Another ninety days. No. I'm sorry.

A hundred

and Hundred and twenty days. We're building a little extra cushion there just in case. So you're probably aware we've been doing active discussions between the utilities council outside council as well as the contract office DOE contracting office representatives and council as well to reshape some of the form and of the agreement that was provided to us by the DOE contracting office in December, and it didn't really meet the goals that the board had expected to see in it. So with that, we've been working as quickly as possible to get some language in there that will satisfy the needs of both parties. We have some drafted up some changes to the terms and conditions document that have been provided to DOE contracting office, and they are preparing to review those as quickly as they can.

So that's where we're at at the current status. But that being the case, there's no feasible scenario where we complete this by the March, which is when our current extension under mod 20 modification 25 ends. And so we're here asking for that additional hundred and twenty days to work through this process again as quickly as we can in the next ninety days, I'm hoping, with that extra cushion of thirty days there on the end going into the new fiscal year. I don't have a presentation beyond what was provided in the staff report. There was an attachment included, but that is the same attachment that was given the last modification 25 presentation.

It's actually, I say that's a presentation for mod 26. So it's the same form and structure as mod 25, but with new dates and the hundred and twenty day extension term. So with that, I stand for any questions, comments, discussion, or anything else I can do to help with this topic.

Thank you, Ben. Questions? Fortunately, I think we're all familiar with extensions to the ECA. If there's no questions, is there any public comment in chambers? Is there any online?

No, chair Gibson. There isn't.

Thank you. So we'll no public comment. We'll bring it back to council for a motion. Discussion, if any, and then a motion. Don't all jump at once.

Yeah. Move that the board of public utilities recommend council approve modification 26 to the east electric coordination coordination agreement, ECA, between the incorporated County Of Los Alamos and the Department of Energy, DOE.

Second.

K. Moved and seconded the recommended motion. This has to go to council then, doesn't it? Mhmm. K. Do we need something Tom, do we need something in here to forward it to counsel, or is that automatic considered automatic?

You can add that.

I thought it said recommended. Let me see.

Oh, yeah. Okay. Sorry. I didn't catch that earlier.

How about a friendly amendment to forward our recommendation to counsel with something along those lines. Is that adequate, Tom?

Yeah. Okay.

That's interesting.

Do you accept that as a friendly amendment?

Yes. Second?

Okay. Kathy, do you have that? Okay. So the the recommended action plus the friendly amendment is up for a vote. Kathy, would you please call the roll?

Member Hollingsworth? Yes. Member Stromberg? Yes. Member Heffner? Yes. And member Gibson?

Yes. K. Motion passes four to zero. Okay. Then we have the related item on page two thirty, item seven c, and on a power purchase agreement to cover the extended time, and that's been also, I would assume. Thank you. Go right ahead, Ben.

So this is a similar to what we did last month to get a short term PPA for March. This will cover the period of April, May, and June of this fiscal year. I'm not proposing anything for July because that's out in the next fiscal year, So I'll wait until we have some more clarity and get our budget process finished on that before I ask

for that.

So I'll be back for you before you again. Hopefully, it'll be for a longer period than just the month of July. It will and we'll have a completed ECA, and I'll be able to ask for a power purchase agreement all the way until Foxdale Flats comes online next summer. With that, this one's a little different than the last one. I based upon the my risk assessment of potential changes in market pricing, we we've got some volatility in in petroleum resources that we're seeing because of what's going on with Iran and the Strait Of Hormuz.

So I'm mindful of that. It hasn't really had much of an impact on natural gas prices in The US, so we're not seeing any commensurate rise in the in the pricing of electricity, which is a large part of which in the market is natural gas fired generation. We're not seeing that increase. It's pretty well sticking to what the forward curves that we're I was seeing them over a month ago. They're holding pretty well.

I did get one indicative price bid at $31 per megawatt hour. So I took that number, gave it a 25% contingency, and came with a dollar amount, which you see before you, the in the staff report of 3,800,000. And I didn't specify a particular supplier at this time because I wanted to leave that open until I can get closer to the actual execution date and when I need to actually submit the staff report for council approval because in the next week, prices could change. And I don't wanna lock in on a particular supplier any sooner than I have to to provide myself the flexibility to pick a different supplier if the prices are better net from someone else next week. So that's why this one doesn't specify a particular supplier of the energy, just the dollar amount and the quantities of 42 megawatts around the clock in April and 40 up to 45 megawatts around the clock in May and June.

So I hope I've explained everything that you need to understand the context of this. But with that, I'll say give me any questions you got.

Thanks, Ben. Questions? I have one. This is for $3,800,000 for three months. The extension for March was one month at little over half $1,000,000. That's a it's three times longer, but more than six times the price. Are you expecting or building in a doubling of cost?

Yes. Because the amount of energy I expect to purchase is double. For March, we only purchased 20 megawatts around the clock. Now we're asking for up to 42 or 45 megawatts around the clock for these coming months simply because we expect a higher power consumption in these months as temperatures rise. And as we're seeing, they're already rising.

It won't be long at this rate before people start running air conditioning. And the second part is the DOE national Alamos National Lab have elected not to run their gas turbine unit. For March, they said they wanted to run it. It's just for context, it's running some little hiccups. It they're planned on running all of March, and they were they got ready to fire it up March 1, and it had a failure on the a gas leak at the unit itself, and they couldn't run until the ninth after they got that fixed.

And it's been running up until today when they had a compressor fit gas compressor failure that's expected to take it offline for less than a month. So that's why the numbers are different because when they're not planning on running this unit, and we're buying more power.

Okay. So it's quantity rather than rate. Yes. Alright. Thank you.

Although I will say the rate is a little higher. The forward curves and the pricing is expected to be nominally $5 plus or minus more than the previous one just because of the forward curves and what

That's what I thought, so is that the rate increase was small, and that's why I didn't catch the increase in quantity. Thanks for the question. That's great. It's helpful. Other questions?

Alright. Is there any public comment? I don't see any in chambers. None online either. Back to the board for further discussion or motion. I

move that the board of public utilities recommend approval of a power purchase agreement with a yet to be determined provider competitively selected on the 03/31/2026 in an amount not to exceed $3,833,000 plus applicable gross receipts tax to meet forecasted Los Alamos Power Pool load for the months of April 2026 through June 2026 plus applicable gross receipts tax for the purpose of buying power and energy to serve the Los Alamos power pool's electric load and forward to council for approval.

Second. Thank you. Moved and seconded the recommended motion. Is there any further discussion?

Kathy? Member Hollingsworth? Yes. Member Stromberg? Yes. Member Hefner? Yes. And member Gibson?

Yes. Thank you. Okay. That takes us to Item seven d, approval of a services agreement for a 560 kilowatt mobile generator and maintenance services. Clay.

Chair Gibson, members of the board, this is a this this was initiated by our by our risk or sorry. Emergency management department. They went out for a hazard mitigation loan with FEMA, and they they started the the application process and then eventually had to hand it over to us. So then we oversaw it. And so we were the ones that ended up being the applicant for the for the grant from the Department of Homeland Security Emergency Management, which is basically funded by FEMA.

And so we went through a process of of identifying what our weak points are and what we would need to do to be able to maintain water service in the event of a prolonged outage from something like a a fire Cerro Grande or Los Angeles level fire. And so we had experience doing that with a Cerro Pelado fire, I think, 2022, and that was the year that we rented the I think it was a one megawatt generator from EUamps. Right? And we were able to basically connect it to the Wahe to the to the e a four line that back feeds up to Barranca Mesa so that in the event of a of an outage, we would able to we'd be able to open that piece of the e a four line and provide power through the generator to power at least a well and two or three boosters at a time so that we could get power into town. And so we have a we already have one smaller generator that we can run the booster in town to get it to the tanks, but we needed something large enough to run at least a well and the boosters in the Guaje to get it into town.

So we did a load analysis, and I I worked with Steven Maris on this. We did a load analysis and calculated how much, how large of a generator we would need. Initially, we were we were looking at a a somewhat larger generator, but the costs for that was was too much because we were hoping to be able to run, like, everything off of one generator, but we realized that we could actually coordinate the system in such a way that we could boost water, turn turn a booster off, turn another one on. And so we found out that the the minimum size basically was a 560 kilowatt generator. And when and it still provides we still had a a margin of error in there.

So we put out the application, and it took a while back and forth. There were some issues. We were a little bit worried that they were that they were gonna just throw it in the trash, but eventually, they did come back. It's taken quite a while. If you recall, you've already approved the 25% match.

I think that was done two years ago. So it's a 75, 25% grant and match 25% match from DPU. The the grant total is 387,476 and 25¢, and our 25% match is $96,869.06. So, really, there's two components to this. There's the purchase, and then there's the seven year service agreement.

So what you're really approving right now is the purchase, and then the the service agreement is something we're gonna have to add as a as a maintenance and testing services from Lofton Equipment to come every year and do load test and and all of the year by year different service procedures that they have to do to a large sized generator like this. It is mobile. It's diesel. The nice thing about this generator is that we have three different locations where we we would be able to store it, and it could be used for essentially backing up power at the wastewater treatment plant in here in Los the Los Alamos Wastewater Treatment Plant, and then it can run Otowi Well 2 and which provides water all the way to White Rock through Parito Tank 1. So just through that one well and that string, we would be able to to provide water in the in the event that there's an outage there, or we can use it to provide water up into town.

So, really, like I said, this is two has a two part two components. There's the purchase and then the services agreement, which is a seven year service agreement. That's good. That's essentially it.

Thank you. Questions? Matt first and Eric?

I just have a quick question. So we're just looking at the purchase, and you mentioned it's the maintenance. I'd just like to know what our maintenance obligation is. Is it, like, on the order of $10,000 a year or

a 100,000 or a million? Or, like, what are

we looking at for maintenance?

Gonna vary. I think the first couple of years is probably not gonna be that much, but eventually, there's gonna have to be like this. They they come in and they do, like, a a load test. It's not gonna be any more than, like, $50,000 a year. So that to answer the question closely, but it's gonna vary between, like, yeah, 10 and 50. Depends on what they have to do.

Great. Thanks.

Eric? Thank you, Jerry Gibson. Thank you, Clay. So with 530 k w, I'm guessing or five sixty k w that this thing can probably run up to about 300 to 350 horsepower worth of motors. So what so there are some wells that this would not be able to back up.

That's correct. Yeah. So so the largest one in what in in the Gwahi Stream is 250.

But the the well that we just did, the ribbon cutting, wasn't that, like, 700 horsepower or something, or am I dreaming that number?

This this can I believe wait? Let's see. 560 kilowatt. It let's see. If it's 300 I think I think it's that it's not 700. That one I think is is 500. It's a 500 horsepower. Yeah. So I I wanna say that this can still we looked at that, and it was still able to run it. What is one horsepower six six hundred and seventy.

Yeah. I I mean, I a good rule of thumb is two kilowatts for every horsepower.

Yeah. Two

kilowatts. So if you had a five sixty, that'd be like a 280 horsepower motor, you know, in order to start it. But

Yeah. That that's the issue is is

That's the issue in starting it. Yeah. And and you've got a

So I think that the deal was because of the Binchaus starters, you can reprogram those to have a slower soft start so that you don't have

Ah, okay.

I think that's Yeah.

That that makes me I

had to remember that. Cool.

And so I guess portable generator, this comes with a portable day tank?

Yes. So how long would the

day tank be typically running allow it

to run?

Yeah. That's a good that's a good question. That that we're gonna have to actually work with the with the provider because it depends on the load. Of course. Yeah. So I think it if we were running the when when we were talking to the to the vendor, they were talking about running you know, if you're running a 250 horsepower motor, we were looking at being being able to run it basic with two refills running it over a a twenty four hour period.

Okay. Alright. Thank you.

That was that was a question we had. Like, how often are we gonna have to feel the same? But so so the deal is is that we're gonna have to be ready to supply diesel in that in that situation.

Clay, you've indicated that this generator is mobile and could serve a number of different utility facilities. Would it also be available to serve any other emergency loads in town? Or or are there restrictions from the FEMA grant that says you can't do that, or is there other technical reasons you can't?

No. The the so it's, you know, it's for in the event of a prolonged outage that was caused by some sort of emergency. So they they weren't really picky about that. They they were actually worried about, like, our sewer lift stations more or less. And we were like, well, we already have those figured out because we have other, like, you know, our our general utility 480 volt, like, ingers, the ones that you kinda see powering, like, lights at night and things like that.

So we have those to power lift stations. So we weren't too worried about that. They were they were thinking, you know, like a municipal level lift station like in Albuquerque or something. And we were like, actually, our problem is providing the water. And so they they were interested in that, and we had to produce a whole set of documents that showed that, you know, here here are the sizes of all the motors, booster stations, wells, and how the water gets moved from from, you know, production in the ground all the way up to the tank.

So we just had to provide that information to them. But to get back to your question, it could it as long as as long as you have the right transformer and everything. So there is a kind of that issue is how it's 480 volts, so it depends on the load and the type of voltage going to other end use of nodes. That that's the issue because there's as Eric can can explain, there's different sort of flavors of service loads. And so there would be kinda some transformer issues in doing that.

Okay. Second question. I'm not as clear as I would like to be on how much of this is for the generator purchase and how much is for this maintenance contract. And kinda related to that is when I look at the the grant or match funding was $3.87 k, and 96 is contributed by utilities. How much how much of this is purchased and how much of this is is maintenance?

And Let me let me look

at of

the staff report, and there's some can answer that, Kelly. So if you if you go to our exhibit a Yeah. Page 15 of 16, the equipment purchase is 311,000. There's a delivery fee of $58.51. Then there's, a potential for tariff, charge of $78.56.

So that's if you add those together, we're, you know, on the order of, 325,000 to purchase of the generator. Then the rest of the contract, and member Heavener mentioned, you know, what what's the annual cost? It ranged from 8,100 a year up to 12,770, but it varied even in the out year. It was on the last year was ten thousand four seventy five. The total was just under 70,000 for the seven years, so little under 10,000 a year for maintenance and inspection. So, hopefully, I answered your question. Almost.

So is is the the FEMA grant the FEMA grant covers not only 75% of the purchase, but also the maintenance contract?

I believe it's just the purchase.

It's just the purchase. Yes. Yeah.

So the $3.25

So we have to budget a line item every year for the service.

Yeah.

Okay.

Yeah. So under section c no. That that's in the that's in the whole packet. Sorry.

I don't have $2.37 in our

report. Page two yeah. So under section c, that it describes all of the different services and the purchase. So, yeah, the purchase is 311,000. So so we actually came in a little bit under the budget for that, But there is the delivery fee, and then there's the scheduled maintenance fees, and that's over a certain number of years.

Seven years. Seven years. And then a non call maintenance fee in case there's a some sort of issue, and that was the $50,000 that I had to remember. So sometimes, you know, it is a motor. Sometimes you end up with a with a situation where, like, they have to come in and overhaul the head, you know, or something like that.

So how much is FEMA paying three quarters of the $3.11? I'm trying to figure out how much FEMA's.

Yes. Paying out of actually They'll pay

the delivery fee and the tariff too. That's part of the cost to get it here on-site.

Okay. The where's the tariff in in in the

If you look, it's very there's a footnote in the page 15 of exhibit Which is Is page what? Well, I don't have them.

And we don't have your numbers and your numbers.

I know. And with the packet numbers are somewhat different. It is

40 eight? Okay. Okay.

Yeah. It's up on the screen. Yeah. There you go.

Okay.

Yeah. There's the schedule.

Alright. Okay. Thank you. Are there other questions?

Just asked a silly technical so you mentioned diesel. Are there other options for gas or other

Not for something that's mobile.

Okay.

Yeah. It has to be diesel.

Yeah. Okay. So there's no advantage for swapping fuel?

So we have the mobile I mean, the our fixed generator Mhmm. Like, down in White Rock and which that that is a 750 kVA, the one in White Rock at the wastewater plant. And so we're that one runs on natural gas. The one here runs on natural gas. And the one that backs up only a portion of the Los Alamos Wastewater Plant plant, it's natural gas. But those are fit those have to be fixed and plumbed, yeah, to the gas system.

Okay. Thanks.

If there's no other questions, I'll ask for public comment. I don't see any in chambers. I don't see any online. We'll move back to the board for discussion and promotion.

I move that the board of public utilities recommend approval of services agreement number AGR26Dash36 with Lofton Equipment Company for a mobile 560 kilowatt generator and maintenance services in the amount of $436,603 plus applicable gross receipts tax for the term of seven years and forward to counsel for approval.

Second. Okay. Moved and seconded. Any other comments? Kathy?

Member Hollingsworth? Yes. Member Stromberg?

Yes.

Member Hefner? Yes. Member Gibson?

Yes. Thank you. Motion passes. Four to zero. Thank you. Thank you. I know you've been working on this one for a long time. Mhmm. Alright. That takes us to board business beginning with the chair's report.

You know, I don't know if Philo's gonna say anything about it or not, but James Oliver retired today. He left before he could come to the meeting. He would have been welcome to come on to this evening's meeting, but and I don't see him watching online either. He must not miss us yet. Anyway, we will miss him. We didn't have the opportunity to say goodbye. I went to the going away Shindiga County had Friday afternoon, but we didn't, as a board, have a chance to say goodbye.

I saw him out in the parking lot on the way out to his car. He was I had a pretty big smile on his face.

Okay. As most of you know, probably everyone knows, you know, Eric would like to leave us also. He threw his hat in the ring for county council. Apparently, the utility board doesn't offer enough meetings, enough agenda docs to read, enough controversy.

So I can't I'm I'm just surprised they approved my paperwork. That that was that was a lot of hoops to jump through.

The yeah. Everything got more complicated. Anyway, the we don't know how it's gonna work out in November, but I'm sure it'll be a a interesting campaign experience in any case. We wish you the best in that regard. So, lastly, Kathy and presented the utility department annual report last last meeting that had some gas usage natural gas usage numbers in it that I was uncertain about, shall we say.

And we had some considerable discussion to try to understand the differences there. And there were several several factors went into the differences. The single biggest one and perhaps the one of most note is that the department used sales numbers for gas, which makes sense if from a financial standpoint, and I use what's imported into the community, figuring it all gets used somewhere whether we whether the local meter's recorded or not. There's always been a little difference there. For some reason, in f y twenty one, that number jumped from about 2% a year up to something over 5% a year.

Makes a significant difference. The we don't know why it jumped for sure, but it did, and that was a significant part of it. We also found a few discrepancies in the heating degree a report from the laboratory and ways of processing that information. So when the when the dust all settled, it was I mean, you can take your choice. You wanna look at sales or you wanna look at the gas we actually used.

From an environmental standpoint, which I think is the intent of our goal, I think the the gas imported is a better measure, and that's actually what went out in the report. I thank Kathy for scrambling to rework that. So it what it basically says is we haven't met the goal yet as the other way of calculating it would say that we are, nor are we making a lot of progress either. So we still have a lot of work to do there. And that was my big concern is it would look like, we're all done.

We don't have to worry about it for a few more years. Not true. So thank you, Kathy, for helping fix that one. That's all I had. Do other board members have reports? Matt?

Sure. Just a quick report. Based on some of your comments, sir Gibson, from last meeting about starting to think about phasing out natural gas systems. I went back and reread an article in Science Magazine in their policy forum about fossil energy minimum viable scale, and I'll just read one sentence at you. We assert that the minimum viable scale for current oil, natural gas, and coal systems are likely much larger and therefore much more near in time than many energy modelers or policymakers realize.

And that was, I think, reaffirming your concerns, and I think I just wanted to share that the thinking with everybody. I've got the hard copy. If somebody wants, I'm happy to pass it on, and I sent file on the PDF if everybody it's a three page article. But it's looking at the national system, but it was compelling thinking as well. So

Does it have details in it of things to think about that we should be thinking about?

It was hard to translate because, again, it's at the national system, but I think it helped inform my thinking, but there were no specifics that I would would bring to to the local BPU. Just the sense of urgency, I think.

I would be interested in any case. If other members are too, just send it out to the to the board. That's a legitimate communication. It's not a policy decision.

To file. He can send

it. Yeah. I'll send out.

Mhmm. Whatever works. Any other board reports? So, Philo, you're up for utility manager's report.

Sure. Chair, members of the board, we had planned to award a contract or present to the board to award a contract for the peers, the caissons in at the, White Rock Substation. However, the contractor didn't have the appropriate license to award the bid for that work. They and so, procurement is working with r and m construction. They've done a lot of work around the community, and they're preparing a task order for us to hopefully bring this back in April.

We are suspending the rules at the work session for the rate introduction, so, I will have a couple items for action, to bring to the board then. And, today, that the wiring for the tie line occurred, and that I was pleased to hear it all all went well. So the last remaining work is for our team to complete the risers and bypass switches before it's energized. So we do have this backup plan in sight now. So and then also with Elkridge, made some decent progress with getting a 100 homes hooked up to the new gas system now total.

There's, 17 homes with green tags that are getting ready to be cut over, and there's 14 more homes that require the, construction inspection division, mobile home inspections. And so seven are scheduled for this Friday and in in the last seven the following week. So we're seeing how we're getting close to the finish line. Recruitment status, had retirement notice from our public relations manager, Kathy Deanna. Mhmm.

Yeah. And our gas water sewer superintendent, Sammy Maesas. And after I wrote this report, Clay wrote me another email says, David Gomez, our water production superintendent, also gave us so there's spring fever in the air, gave retirement notices. And, these are long term employees that have served our operation very well, and then and, we'll be actively working on their replacements here next month, in month or two. And then, we we have completed interviews for the deputy utility manager for engineering and the senior management analysts and working with, HR to finalize those recruitments.

We've made an offer to a water production electrician. He's still considering the offer. And then we have open recruitments for a line person, electrical engineering project manager, electrical engineering manager, and engineering aid for utility locate. So those it's we make a couple steps ahead and a couple steps back each month, so I'll keep you updated as we move along. I will say through retirements in this this little wave here, we do have good people below that our team has recruited that I know will be able to step up.

So there don't panic. So, you know, that that's it's good we have that ability. A few years ago, we weren't there, but we're we're there. So okay. Then, you know, we mentioned Ben tonight about the energy coordination agreement.

Just just so kind of a status update there. Wrote some language we received on Sunday, and Thomas turned it, and we got it back to the DOE today. And some of the language that was there to kinda highlight was the ECA term is a ten year contract, but we also added a paragraph to, have a a ten year renewal. So, in 2036, me Ben will be here to talk about that to the board, and, we'll hopefully have just a a more simple renewal, process for that for another ten years. And then, also, there's a provision.

Kutak Rock has has worked a lot of DOE sites, so there's been discussion. How do you develop a large capital project and plan for it and and not assume, you know, we would go in for the project for thirty or forty year financing and then not you know, the DOE could walk away in ten. How do you how do you assume that much risk? There's a provision through WAPA where you can enter a contract for a thirty year power purchase agreement. So this was adding an option for us should we wanna explore a large project that needs a long term investment and contract need.

And so this would allow for us to add in, you know, a purchase of a asset such as a SMR or geothermal plant and then get recovery through rates. And then Ben and and Nick worked with DOE and Exeter, their consultant, to estimate the contract value. We had initially proposed at 63,000,000, and it's 425,000,000. So that's under review with the procurement office in Albuquerque. And so our next steps is another round of internal attorney reviews and, just to make sure all those loose ends are correctly addressed.

And, I asked for a meeting. The DOE got back with me, they said he's checking with his team. And, hopefully, within the next week or two, we'll have another rereview of where we're at today. So I do think you know, Ben mentioned that, you know, our extension tonight was a hundred and twenty days. We had initially proposed 90.

They wanted they proposed back a hundred and twenty to have that review time. But I think we really hope we have a lot of the loose ends tied up by, hopefully, the end of the month where we can have another turn and get it presented to the board subcommittee or the total board if Thomas thinks it's ready. So we'll we'll have to we'll bring that back when we get the right guidance. And the Hemis Mountain fire protection project we got after, secretary Noem was let go, all the hazard mitigation grants got released, and we were notified we we can get funding. FEMA, though, does check their aerial photography and saw that we had made progress to this, project.

And and so we had to go rescope the project, and, it end up being the remaining works 3,700,000 that's eligible for FEMA funding in their their cost share because it's it's the same as this grant that we awarded for the generator. It's, you know, one third, but it's really 25%. And, about one third of whatever the federal share is, and then it ends up being 25%. So there's 2,800,000 of federal funds that we'll be able to take advantage of. And so we, also have been working, we you've got some guidance on the gas tonight, but, Joanne, Richard, and and, James and James, Allard, before he left, did some special rate modeling for water, because there's a lot of energy to move that water up to the 10,000,000 gallon reservoir.

So that we're gonna have a special rate just to pay for the additional work to move that water up the mountain. And so that will be presented to you in two weeks. And the then finally, our pump house and control works currently out for bids and due here in a few weeks. On Foxtel Flats, there's really no new update. There is some work we're doing on a what do they call land? What's the transfer agreement? The the lease agreement.

Assignment.

Assignment of lease agreement. Right. Yeah. So we're doing a little work behind the scenes, but it doesn't change any of the construction dates. And UAMs didn't have any new updates, so what I wrote here is the same.

And then the Chromium plume, I met with members of the county manager staff, the deputies, both deputies, and the new NMED resource protection division director. And this gentleman did discuss some options on how to reinitiate the chromium plume project. There's it's you know, right now, it's on a time out, and we're I think there's at least on the NMED side and us that we wanna see something get started again and get get some movement towards treating that plume. The 18 inch waterline work unit, we've gotten back all the permit comments from Llano and finalizing application to the army corps for permit to do the work. Once we have those all the permits in hand and the scope fully defined, when you get your permits, you get comments back.

So, then we'll have our on call contractor fin finalize the task order, and then we'll bring that back to the board for approval as well as a budget revision because it's a unplanned issue with the waterline. Our other unplanned issue with water was our tank inspections and cleaning, and those are moving along as scheduled. And we have found through the tank cleaning that there's some corrosion at the bottom of the tanks and and where the sand was covering it. And that we'll need to do some additional maintenance and repairs once everything's completed. Hopefully, we'll bring that back once we learn what the needs are.

And then, some good news with PFAS settlement. Through review of our, data and so forth, a higher level attorney that I hadn't worked with before came got into the conversation, and, we actually qualify for the phase one list of that class action lawsuit. And that allows us to have an expedited payout schedule, for that PFAS settlement funds, that's, you know, through Dow Chemical, etcetera. They're gonna set up a meeting in early April, and I'll learn more, report back to the board on that. And the and I I did get some bad news, and this was on the vertical switch gear.

It was moving forward to be on on schedule and under budget, and, I was notified last week that or a week and a half ago, I think it was now, that they had some emergency work that competed for that effort and had to suspend the project. And once they reinitiate it, they'll report back what what this new schedule will be and and but there'll be some cost given in that delay. I don't I don't know the scale yet. And then finally, I did attend the legislative rally, and the theme of the discussion for power is affordability, equity when it comes to impacts by data centers and supercomputing. A lot of you probably hear it in the news all the time.

They've taken it up all the capacity and to build new capacity costs a lot more, which we've been presenting for many years. So, basically, these centers need to be bringing in or paying for that additional capacity versus using up everything. And, the the other issue was permit reform. And, chair Reidy and public relations manager Duran, joined me on our Capitol Hill visit with our congressional delegation. So I think they were good meetings, it was interesting time.

So it's always interesting times on the hill, hear about what's happening in The US. So so I stand for questions.

Thank you. Questions. Eric?

Thank you, chair Gibson. You know, Fenton Hill was a geothermal experiment. I heard a rumor the other day that they may be starting that back up. Have you heard anything about that?

I would maybe ask Ben. Have you heard anything on the Fenton Hill? I know it gets brought up a lot with lab people from historical perspective. But

I have heard a rumor just as you have. Nothing more substantive than that and nothing to and nothing that involves the DPU at this time.

Alright. Well, as long as we're in the rumor mills, are there any rumors about EPCU? Any any updates on EPCU?

We did have our Los Alamos PowerPool meeting, and that's always an action item that's discussed. And it sounded like they were working on the mobilization, and design was, what, at 60?

What was the percent? Don't recall the exact numbers. It's on schedule and on plan. They've staked out the locations of the of the path, and they are making their expected progress towards completing their design and construction. They're in permitting right now, I believe, as well. Still working through that piece.

Other questions? Thanks, Philo. Thank you. County manager, you are up.

Okay. Good evening, chair and board members. Few highlights of things that have been going on. Just this last week, our both our police department and our fire department received, reaccreditation under their national associations. The police department's accreditation hearing was in Tucson, and I went to the fire department, which was in Orlando.

I think you're aware we have a new fire chief, but chief Servi, who was the interim fire chief, is now retiring. So we in the senior management team along with utility manager Shelton, we, took her out to lunch today to celebrate, but pretty amazing for her to have a career in a in a fire departments that don't even have separate gender facilities or anything like that. I mean, she's she's amazing. So we're I think there's a community event next week. It was in the paper.

I don't recall off the top of my head right now. I apologize when that is. We did receive our $40,000,000 in the bank for selling bonds for our broadband project. So we are we have the monies to move that forward and start implementing. And let's see.

We were very fortunate with the timing of selling the bonds because now with the with the war going on, it's really the rates have gone way up, but we were able to lock in around 4% average. So it's really good. Next week, we're prepping for or we're prepping for a trip to DC to the hill, our annual trip next week. And with the chair, Reidy, councilor Herman, intergovernmental inter affairs, Danielle Duran, and myself. And we'll certainly be talking about Chromium plume and maintaining funding for environmental cleanup as well as funding for a new well.

And we've also been, looking for funding as well for and applying for our emergency operations center, which is in addition to fire station three as a regional EOC just because when there's an emergency that doesn't involve the laboratory and because of technology interconnections, we really can't access the laboratory EOC. So it is important we have another facility with the technology and be able to operate, when that facility is not available to us and and to meet needs that, we can't meet, or things that we can't access being at the the lab's EOC. The we are busy with the budget pulling together the final numbers, pulling together the final presentation. Overall, in the general fund, what you'll see is a a slight decrease from fiscal year twenty six to '27, some modest increase in things like insurance, salaries, contracts. However, that's somewhat offset with reduced transfers to some of our other funds like capital funds because we are gonna be planning another bond sale potentially in the fall to fund some of our capital projects that we had prelim previously, we were going to not use debt service for, but just pay for out of the the fund balance.

So that'll help smooth out some of those capital expenses over a longer period of time because we are seeing some old debt. We're we're retiring it, and and so we're able to issue some new debt because of that without really increasing our costs of to debt service. That's good news. We will be talking about entering into negotiations with the plumbers and pipe fitters for a collective bargaining agreement in the in the near future, so I thought I'd mention that. And and I just think the other thing that we're just talking about at senior management team is just, a really a lot of concern about the fire season starting earlier, the temperatures.

We're seeing a heat wave, a lot of fuels, very little moisture, no snowpack. So you should see a lot of outreach about fire prevention and and restrictions coming out about what we can do to keep our community safe. So with that, I will stand for any questions.

Thank you. Questions?

Okay.

Thank you. She covered everything. Thank you. That takes us to the council liaisons report. Councilor Herman, you'll have to unmute yourself, I believe.

Thank you, chair Gibson. Chair and board, we had a county council work session last night. First, we had presentations from both parks and rec and the library board. We did accept the inclusivity task force final report, and now we're kind of wrestling with, what to do after the having accepted their final report. So more on that when we know.

We did accept both the community wide electric vehicle charging plan and the fleet conversion plan. And we approved amendment for a services agreement for construction management and public outreach services for the Trinity Drive safety and ADA improvements project. We also got an update on tourism activities, seems to be going along very well. And then Philo actually gave us a status of the draft ECA, which you know what has happened since then. I do want to apologize for being late this evening.

And I also wanna tell member Stromberg, if I can help you in any way, answer any questions or anything, please let me know, and I will stand for questions.

Thank you. Thank you. You bet. Do we do we have any questions? Other than how is your husband doing after the surgery?

He's doing okay. You know, it's, that's kind of a tough one. Having just one arm, he had rotator cuff surgery. Thank you for asking.

Well, I know it well. I've had both shoulders done. Oh, boy. Yeah. So Different times.

But Yeah.

Okay.

They, it's easier the second time. You know what to expect.

Yeah. So I'm I'm at home being nurse. So, but thank you for asking.

Any any other questions? K. Thank you. Thanks for coming. Thanks for being here anyway.

You bet.

Okay. We move to the ESP liaisons report. And Sue Barnes.

Yes. Good evening. Can you hear me well?

Yep. We can. Yes.

Excellent. Thank you so much. I'm here to report that the ESD now has a full seven member board, and counselor Melanie Hand has been appointed as our new council liaison. She's very enthusiastic about joining us, and and and I'm sure will be a wonderful liaison. At our January meeting, we appointed David Hampton to chair and Eric Lachelle to vice chair positions as where as well as approving our 2026 work plan.

We received a report from, Barco in Albuquerque on the recycling audit that they did for us. Not much has changed. We're still doing a great job, with a low contamination rate of about 18%. Please keep separating your cardboard and using the cardboard dumpsters if possible, and remember that plastic bags, film, and Styrofoam do not belong in your blue bins. At our February meeting, we heard presentations on the final drafts of the fleet conversion and community EV community wide EV charging plans, which the ESB approved unanimously.

And as councilor Herman told you, these were also approved last night by council six to zero. The board and our EV working group would greatly appreciate it. BPU's helpful input into these plans. So thank you very much for your contributions to this project. We started planning for Earth Day, which will be April 18 this year at the Nature Center as well as numerous festivals, markets, and other events for sustainability education and outreach in 2026.

It was also reported to us that New Mexico now has a statewide climate action plan, and the ESB has requested a presentation on this in the near future, so if you're interested in that, you might keep an eye on our agenda. At our March meeting tomorrow night, we'll hear a presentation by Mozart DevCo on the proposed waste to energy plant at Okay O'Engage. Mister Michael Dwinell, the cofounder and principal with Mozart DevCo, will present an overview of the plant, a project schedule, and regional partnerships, including how Los Alamos County may participate through landfill waste diversion of municipal solid waste for clean energy production. And that's all I have, but I'll take questions.

Thank you. Questions? Sue, with the new year, will the will there be change in who's doing the liaison work, or you still gonna do it?

At the at this point, it's still me and Shannon Blair. However, we have another person named Blair who has joined the board and is also interested in sharing task with us. So we'll we'll figure that out at tomorrow night's meeting, and they'll be familiar faces.

So Okay. Thank you.

You're welcome. Thank you.

Any any other questions? Kiss not, Sue. Thank you very much. That brings us to board expenses and a training opportunity that is outlined in starting page two fifty of our agenda doc. Milo?

Jerry, I the, national conference, the American Public Power Association is gonna be in Boston from June 26 to July 1. And the conference theme is for board members in elected bodies to participate, so I wanted to be sure to present that to the board if anyone's interested in in attending.

Okay. Is anyone excited about this one?

Someone interested, but I need to figure out some financial issues.

I might be interested, and I need to figure out some schedule issues.

Okay. But I

did look at the site, and even hotel reservations for the conference hotel are not due until the June 3, so we have a little bit of time. And I think the advanced register registration's quite a ways down the road too. So there is time to Bring this back. Sort out issues. Thank you for bringing that to our attention. Actually looked like a pretty good conference. If there's nothing else on that, we move to

Chair, I just Yes. Might ask if if either one of your board members wanna attend. Please let Kathy and I know, and we'll add it to the agenda for approval.

Right.

But more Multiple can go. Right?

Right. It's just a matter of getting the approvals before we make expenditures. So That

takes us to status reports, Please, next. Oh, I'm sorry. DPU quarterly report. Apologize. And that should be Kathy. Getting you retired already here. Jumping right over you. Sorry about that.

I'm still right here, chair Gibson.

And we hope you're here till till the very last minute as long as

Well, thank you.

As you can be.

So I did a pretty lengthy staff report again. Any questions?

No. Just

kidding. I won't take you through a whole lot, but I will, emphasize just a couple things. In write up, I think the adjusting to the weather was just kind of, like, a really good point to make for some of the results that we're seeing. Some good, some bad. It's awesome that they got up Camp May Road. But, you know, there's also bad impacts to warmer weather all the way through the winter, so I thought that was pretty relevant. And did everybody notice that Leo Jaramillo came to our Christmas luncheon? So that was cool. His picture's there. On page 12, I always like to point out the safety employee.

It was Myron Cordova, and he and his partner, Michael Salazar, witnessed a car accident where a car flipped, and the kids in the car were trying to get out and and were trapped, and they broke the windshield in to help them get out. So we thought that was awesome. Only one person can be nominated at a time. So, Clay, you know what to do next quarter. Let's see.

On page 13, I just wanted to point out that this is Roland. Do you guys remember the the outage behind the ice rink? Just a cool picture. I don't even know who took it. Somebody texted it to me, and I didn't keep track, but this wild picture is Roland.

I'm gonna skip all the way through to page 25. This I'm only gonna talk about pictures because I know you guys read every every word I write. This is the temporary belt press that was put in where where they replaced the belt press at the Los Alamos Wastewater Treatment Plant, and that project is done. So first of all, that's cool. And second of all, there's a time lapse video on YouTube of four months crammed down into three minutes.

If you guys wanna see it, go find our YouTube. It's also on also on Facebook, Kathy was pointing out. And then I'm gonna go all the way to the end, really. Let's just jump to page 65. You guys know I like to talk about the employees.

So on the employee page, we did not have a lot of action this last quarter. One new employee, which seems which seems slim for what we've been seeing the last couple of years. But and this is him down in the left corner. He is Harold Harrison's son who just retired from DPU about a year ago from electric production, and Isaiah is now an electric production covering for the family, I guess. And I also wanted to point out Sam Martinez down here because nobody has ever seen his picture in this report where he was identifiable as person.

I have headshots of almost every single employee in this department and didn't have one of Sam, and he's been here as long as I have. So needed to point that out. And that is all I have. Do you all have any questions?

Matt? Sure. First, thanks for every word and every picture. You're welcome. I had a question on page sixty one and sixty two, and I wondered if maybe this was actually something you brought up earlier, Rob, about, like, rationalizing the gas numbers. The loss numbers looked really big to me, and maybe I just haven't noticed those before. But

Are you

talking about the cumulative ones? Or The gas loss of 20%.

Okay. That seems crazy. What what does that mean?

I think that's a Richard question, possibly. Ben? It's a Ben question.

Money or what?

It does vary somewhat from month to month. You get to get an idea of what's really lost, you're gonna have to look over some period of time.

Yeah. But 20% over any period of time sounds like a lot.

Likely an oddity of the way what Jared Gibson alluded to about how we compare sales and purchases. They don't time align very well simply because of the way we do our our billing, and we have our billing cycles. So things never align up very nicely. And depending on the particular year and what the consumption was, particularly at the end of the calendar year, things get out of whack. So the numbers really don't have much substance behind them. Okay. Some years will have an a loss that's negative, which is impossible

Right.

Except for the fact that we report it in this matter. So

That's just the 20% and the contrast from q one struck me as that seems like a to lose 20% seems like a lot. But

Generally, it's just an artifact of, you know, the time shifting would shift about a month. Okay. And if it just happens to lie on those boundaries of winter and when the consumption was higher or lower, it just throws them off.

So I look for a negative loss at q three. That's perfect.

So just, like, I mean, for a public facing document, it might be good to put a comment in to explain when things look really weird like that. Mhmm. Just explain the anomaly.

That's a fine suggestion. Thank you.

Okay. If you were to go through, like, several years of of these reports and and compile and add up all of the all of the metering, could you could you get it to balance out if you looked at it over, like, a ten year period? Like, the pluses and minuses eventually should come to some sort of stable equilibrium. Yeah. Because I I understand what's that.

Because we can read the the border the import meters live all the time, but it takes a long time to compile the the commercial sales. It it's it's a month off at least, if not more. So I I can see how that happens. I'm like, how how would this even make sense unless you can add them up over a period of a long time?

Do some time averaging. Yeah. Yeah. That's a interesting thought. I'll have to look at that. I've never tried that.

I can actually personally address that. Not over ten years, but over the that 2016 to 2020 period that we're using as a baseline, the averaged over the whole five years was just under 2% difference, you know, so between import and sales. It was in '21 that it jumped, and the average over the last four years, f y twenty one through '25 let's see. Twenty one through '24. Sorry.

It was about 5.4%. So, yeah, if you look at individual months, they vary all over the place because of the reasons it's been identified that cycles are just different. Years are have less variation. So the longer you average, the closer you get to what our probably our real situation is. Not ten years, but it's what we've seen lately.

And the interesting thing is why did it jump so much four years ago? Okay. Any anything else on the quarterly report? Thank you for your usual good job.

Thank you, chair Gibson and board members.

Is this your last one?

I think I'll probably have my hand in the next one too. Okay.

That I believe takes us to now we can get to status reports. Are there any questions on status reports? They start on page three eleven of our agenda doc. Any questions or issues or comments on status reports? That's a good thing.

That means refer things are fairly stable. No major entries in the risk line of injuries or else. A few claims, but that's kinda normal. Okay. If there are not if there's nothing on status reports, we'll move to the tickler file starting on page three twenty four.

And I do want to ask in association with that if there are any changes that folks have in their plans to be here or not here, especially over the next couple of meetings. I know people can't project completely way out ahead. But right now on the for the meeting of the first, I show both Eric and Charlie absent and yours truly remote, so we're just down to a quorum, barely. On the fifteenth, we have Jen absent, Matt remote, and Charlie hopefully here, but not clear. Again, we might be watching for a quorum there.

And one more going into early May. Actually, the first meeting in May right now is on the sixth. We show everybody here except maybe Charlie. He always says maybe. Does anyone know of any changes at this point?

Okay. You'll see when you go through the tickler file that we've tentatively scheduled the performance Fylos performance evaluation for the May 6 and the June 3 being those those are the two nights in the next three months that everybody's hopefully here. So we delayed it by about a month from when it was originally scheduled because the review period actually ends at the March. But I thought this was important to have everybody here if at all possible. So that's when why those were moved.

With though with those comments, are there any other comments any comments on the ticker file itself? Everybody's happy with the workload.

Have we heard anything about a Lantel yearly presentation? I think we've been talking about that for, what, the last two years?

At least. Right.

I I have confirmed for April 15.

Oh, it's confirmed now.

Yay. I don't think that made the packet because I just learned that.

Okay. So we have that one on April 15, and we have the EV plan presentation on April 15. That's good news to finally get Leno here. Mhmm. We have some questions. Good. Good. Good. Have an accumulation of questions. You know, the longer they're not here, the more questions we have. Okay. One item that is not on the parking lot yet is a discussion of undergrounding that will be added to the file.

Do we have Chair Gibson, could you repeat that parking lot item?

Undergrounding? Electric Electric underground. Distribution. With that, we are to the final opportunity for public comment. Is there any in chambers? Is there any online? That being the case, we are adjourned. Thank you, every