AGENDA TITLE:
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Fiscal Year 2025/26 Electric Utility Quarterly Financial Update Report (EU)
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MEETING DATE:
March 18, 2026
PREPARED BY:
Melissa Price, Assistant Electric Utility Director
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RECOMMENDED ACTION:
Receive Electric Utility Financial Update Report for the first and second quarters of Fiscal Year 2025/26.
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BACKGROUND INFORMATION:
The Fiscal Year 2025/26 Financial Update Report, through December 31, 2025, is included as an attachment and a highlight of activities and progress is outlined below. Overall, LEU maintains a strong financial position, operates within budget constraints and remains well positioned to continue maintenance and operations efforts.
Electric Utility Financial Highlights
• REVENUE is stable tracking at 55 percent of budget.
ü Energy sales are tracking at 56 percent of budget. Typically, energy sales tend to track higher during the early, warmer months of the fiscal year (i.e., July-September).
• EXPENSES are tracking at 56 percent of budget halfway through the year.
ü It is important to note that two transfers to the General Fund, namely Cost of Service and the PILOT, are transferred in full at 100 percent of budget once at the beginning of each Fiscal Year.
ü Non-power operating expenses are tracking at 45 percent of budget.
ü Power supply costs are tracking at 54 percent of budget and were revised upward as part of the midyear budget review process with cost increases primarily attributed to higher power generation costs associated with lower market prices leading to less plant revenue to cover fixed costs.
ü Capital outlay expenses are tracking at 27 percent of budget. Primary efforts have been focused on inspection efforts and underground/overhead maintenance activities as well as substation upgrade/maintenance work associated with the electric distribution system.
• RESERVES, as of December 31, 2025, totaled approximately $43.7 million. These reserves are used to fund pay-as-you-go capital improvement and system maintenance projects as well as provide funding, when needed, for business related areas of risk such as market power volatility and the cost of replacement power during dry year conditions for which costs cannot reasonably be forecasted and budgeted.
• CAPITAL IMPROVEMENT PROJECTS includes nearly $20 million over 5 years for capital improvement efforts. The projects listed are included in the City’s current Capital Improvement Program included in the adopted budget.
5-YEAR FINANCIAL FORECAST indicates sufficient reserves through Fiscal Year 2029, based on current forecasted assumptions. LEU anticipates a needed inflationary level adjustment in Fiscal Year 2030 with the last base rate adjustment implemented July 1, 2024.
FISCAL IMPACT:
There is no fiscal impact from the preparation of this report.
FUNDING AVAILABLE:
Adequate funding is available in the Fiscal Year 2025/26 budget, as amended by Council action from time to time, for the items in this report. All data is presented as current as of the date(s) obtained from the City’s financial reporting system.