Title
Approval of Budget Revision 2024-60 Uniper Settlement and Change to Debt Coverage Ratio
Recommended Action
I move the Board of Public Utilities recommend the Uniper Settlement Funds be invested in a combination of a laddered treasury portfolio and the New Mexico Local Government Investment Pool (LGIP) in accordance with the County Investment Policy as overseen by the County’s Chief Financial Officer.
I further move that BPU provides guidance to the Utility Manager to use the settlement funds and associated interest income to:
1) bring Electric Distribution and Electric Production reserves up to their required balances per DPU Financial Policies and the County Charter Section 509 and Section 40-63;
2) cover increased cost of power to minimize rate increases beyond those already anticipated in long term plans; and
3) upgrade electric production and distribution systems to meet expected increased electrification demands over the next three to ten years.
I further move that BPU approve Budget Revision 2024-60 as presented and forward to Council for consideration.
I further move to amend Objective 2.3 of the DPU/BPU FY2025 Strategic Focus Areas, Goals & Objectives to reduce the debt coverage ratio target from 1.6 to 1.3.
Utilities Manager's Recommendation
The Utilities Manager recommends that the Board approve the motions as presented.
Body
In March, the Department of Public Utilities received a settlement from Uniper for the cancellation of two power agreements. The first was for 25 megawatts at an average price of $62.25 per megawatt hour. The second was for 15 megawatts at a price of $39.67 per megawatt hour. The total settlement was $58 million. The replacement power contract is at a price of $76.75 per megawatt hour. The additional power costs for FY2024 are approximately $2.2 million and for FY2025 are approximately $8.7 million. Attachment A is a budget revision to recognize the $58 million settlement and the estimated interest income. ...
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