AGENDA TITLE:
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Fiscal Year 2024/25 Electric Utility Department Financial Update Report (EU)
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MEETING DATE:
September 3, 2025
PREPARED BY:
Melissa Price, Assistant Electric Utility Director
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RECOMMENDED ACTION:
Receive Electric Utility Department Financial Update Report for Fiscal Year 2024/25.
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BACKGROUND INFORMATION:
The Fiscal Year 2024/25 Financial Update Report for Lodi Electric Utility (LEU) is 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 into Fiscal Year 2025/26.
Electric Utility Financial Highlights for Fiscal Year 2024/25
- REVENUE ended the fiscal year at 95 percent of budget.
- Sales revenue was 95 percent of budget. Sales revenue includes both base rate and Energy Cost Adjustment (ECA) revenue. While energy sales came in as originally forecasted, overall sales revenue was down about 5% which was attributed to a corresponding reduction in actual power supply costs which reduces ECA revenue. However, base rate revenue was up due to Year 2 implementation of a Council approved rate increase.
- Development impact fee revenue realized was approximately $100,000 more than estimated with actual timing of receipts and unexpected customer projects/improvements likely causes for the increase.
- While other revenue is showing at 88 percent of budget, as of the date of preparation of this report, there was a posting delay associated with Cap and Trade revenues that once included, reveals other revenues at 98 percent of budget.
- EXPENSES ended the year at 93 percent of budget.
- Non-power operating expenses ended the year at 87 percent of budget, primarily attributed to a slow- down and lack of demand for the residential direct install program which Council recently approved use of those funds to implement a Commercial DIY Pilot Program.
- Power supply costs ended the year at 96 percent of budget – lower due to more mild weather conditions this past year.
- Capital outlay expenses ended the year at 73 percent of budget. Unspent funds which will roll to Fiscal Year 2026 are primarily associated with substation upgrade and capacity projects, as well as delays associated with long lead times on vehicles/equipment. Approximately $1 million will also roll to the next year for work associated with the 230 kV Transmission Project to begin preliminary design and place equipment deposits.
- RESERVES as of June 30, 2025 totaled approximately $41.6 million or 136 percent of the Council approved reserve target. These reserves are used to fund pay-as-you-go capital improvement and system maintenance projects and to maintain both Council approved operating reserve levels and meet debt service covenants for reserves.
- CAPITAL IMPROVEMENT PROJECTS includes over $20 million for capital improvement efforts. The projects listed are included in the City’s current Capital Improvement Program and included in the adopted budget. The majority of capital improvement work in Fiscal Year 2025 focused on system maintenance, capacity upgrades, substation modernization and upgrades, and work to support DWR’s natural gas power plant project, as well as other customer reimbursed developments and improvements.
- 5-YEAR FINANCIAL FORECAST indicates sufficient reserves through 2029 based on various assumptions. This includes revenue from a recently approved two-year rate adjustment approved by the City Council. The next CPI level forecasted base rate increase is projected in 2030. Based on current assumptions, staff project a needed increase of 3 percent in 2030 and 3 percent in 2031.
STRATEGIC VISION:
3C. Fiscal Health: Ensure elected leaders & staff retain focus on fiscal priorities.
FISCAL IMPACT:
There is no fiscal impact from the preparation of this report.
FUNDING AVAILABLE:
Adequate funding was available in the Fiscal Year 2024/25 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. Final year-end audited data will be provided in the City’s ACFR.