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File #: 15464-22    Version: 1
Type: Budget Item Status: Consent
File created: 1/20/2022 In control: County Council - Regular Session
On agenda: 1/25/2022 Final action:
Title: Approval of Budget Revision 2022-43 for Purchased Gas in the Gas Utility.
Presenters: Heather Garcia
Indexes (Council Goals): * 2021 Council Goal - Investing in Infrastructure, DPU FY2022 - 1.0 Provide Safe and Reliable Utility Services, DPU FY2022 - 2.0 Achieve and Maintain Excellence in Financial Performance
Attachments: 1. A - Budget Revision 2022-43
Related files: 15416-22
Title
Approval of Budget Revision 2022-43 for Purchased Gas in the Gas Utility.
Recommended Action
I move that Council approve Budget revision 2022-43 to authorize an increased budget for purchased natural gas in the Gas utility in the amount of $3,000,000; as summarized on Attachment A, and that the attachment be made part of the minutes of this meeting.
Utility Manager Recommendation
The Utility Manager recommends that the Council approve the motion as presented.
Board, Commission or Committee Recommendation
The Board of Public Utilities recommends that the Council approve the motion as presented.
Body
Global demand on natural gas and increased reliance on natural gas as an alternative to coal, in addition the risk of severe weather events, has impacted supply of natural gas. Estimates used during the FY 2022 budget planning period, which were adjusted after the February Polar Vortex weather event in Texas, were $2.80 per MMBTU. Prices have averaged $4.76 per MMBTU for FY 2022, with prices hitting $6.30 per MMBTU in January. FY 2022 total cost of gas purchases was budgeted at $2,138,175, as of January 12th, 2022, $1,766,232 has been spent. This is approximately eighty three percent of the budget with only fifty percent of the year completed.

The following calculations are based on the assumption that gas prices will be $6.02 MMBTU for NMMEA discounted volumes for the remainder of the year, with 20% of non-discounted volumes being at $6.30 per MMBTU. Transportation costs also remain the same at $0.27 per therm.

2022 Budget $2,138,175

YTD paid and recorded as of 1/12/22 $1,766,232
2022 Remaining (estimated) $3,340,207
Est EOY total spend $5,106,439
Difference ($2,968,264)
Because several estimates are included in the year-end projection and there is a potential for further market response, staff is recommending an expenditure budget adjustment of $3,000,000 for gas purchases.
Alternatives
If these budget increases are not app...

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