Title
Discussion and Possible Action on One Year Rate Increase for Gas Services
Recommended Action
I move that the Board of Public Utilities direct the Utilities Manager to bring a one year gas services rate increase, LAC Code Ordinance 02-385 as presented on July 22, 2026.
Utilities Manager's Recommendation
The Utilities Manager recommends that the Board approve the motion as presented.
Body
On June 9, 2026 Council Council rejected the proposed two year gas service recommended by BPU. The Council Chair directed the the Utilities Manager to get back with BPU for a one year recommendation on a gas service rate increase. At this same meeting, County Council considered and recommended to the County Manager to draft an ordinance to amend the Utilities Charter section to remove profit transfer paragraph. Once this ordinance is adopted, this change will go to this November's election and depending on the outcome of the election it could change how DPU recommends gas and electric rates. Therefore, there is a reason to proceed with a one year rate increase for gas services.
In addition, Council ask to pull together more information that would support the recommended rate increase. A recent budget-to-actual analysis was completed through May 2026. FY2026 sales revenue is projected at $5.6 million, with a net loss of about $760,000. Based on the U.S. Energy Information Administration (eia.gov), the average cost of gas in calendar year 2025 for the State of New Mexico was $1.15 per therm delivered to residential customers.
Alternatives
As noted above, rate increases will be necessary to support essential operations, infrastructure replacement, and the restoration of cash reserves. Without taking action, DPU would be forced to curtail maintenance and replacement activities, which would ultimately impact system reliability.
Attachments
A - LAC Code Ordinance 02-385 - Gas Rates
B - Gas Rate Ordinance Presentation