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Energy Resources April 20, 2026 Scott Bouchie; Energy and Sustainability Director John Petrof; Senior Fiscal Analyst Fiscal Year 2026/27 Public Purpose The Energy Resources Department exists to sustainably procure and deliver natural gas and electric power through a safe and reliable infrastructure with predictable, affordable prices aligning with Mesa’s priority of quality development and a thriving community 2 OUTCOMES-base of kpis HOW WE ALIGN TO THE PRIORITIES WHY WE EXIST Stabilize and reduce supply costs Meet customer needs • Ensuring reliability of Natural Gas and Electric service • Staffing Provide opportunities for staff within department • Succession Planning • Cross Training Resiliency Outcome Areas 3 3 Reduce & Stabilize Costs – Electric Resources 4 4 Efforts to Reduce Electric Resources Costs Reverse Auction • Mesa capped cost per MWh; counterparties underbid each other • November 2025 Parker-Davis Voluntary Reduction Program • Option to receive payments instead of hydropower if financially beneficial • Began July 2025 Increase counterparties with which Mesa is enabled to trade power • Increase competition to potentially reduce power costs Reduced Market Exposure • Implement staggered (rolling) expiration dates for electric purchase contracts to minimize exposure to market volatility Reduce & Stabilize Costs – Natural Gas Resources 5 5 Efforts to Reduce Natural Gas Resources Costs Prepay Program • Participate in purchasing opportunities available exclusively to municipally owned gas distribution system • Achieve a savings of $0.10 per dekatherm on 4,500 Dth per day, beginning May 2026 Fixed-Price Natural Gas Contracts • Lock in fixed pricing for approximately 70% of annual natural gas usage, ensuring stable and predictable costs Reduced Market Exposure • Implement staggered (rolling) expiration dates for natural gas purchase contracts to minimize exposure to market volatility Utility Awards Natural Gas • APGA SOAR Award – Silver Level Designation, 2025-2027 Electric • APPA RP3 Designation. Platinum Member 2026-2029 • 2025 Certificate of Excellence in Reliability • APPA Safety Award – Diamond 2025 Highlights and Accomplishments 6 6 Outage Duration - SAIDI 7 7 Outage Duration - SAIDI 8 8 Gas Emergency Response Time - Mesa 9 9 Resiliency 10 18% 2% 2% 14% 21% 43% Percentage Renewable / Traditional Power Fiscal Year 27-28 Hydropower (up to 15 MW) City Solar (3.62 MW) Customer Solar (2.2 MW) SRP Renewables (16 MW) Utility Scale Solar (25 MW) Traditional Power (mixed fuels, various MW) 38,044 6,088 Transportation CNG Used by Mesa (December 2025 to March 2026) Clean Energy supplied RNG (MMBTU) Mesa Produced RNG (MMBTU) Department Financial Summary 11 Figures in millions, rounded 11 Core Business Process Energy Resources FY 24/25 Year End Actuals FY 25/26 Revised Budget FY 25/26 Year End Estimate FY 26/27 Proposed Budget Expenditures Electric Operations and Maintenance $6.4 $7.1 $6.7 $7.4 Gas Operations and Maintenance $14.4 $16.0 $15.8 $16.3 Expenditures Total: $20.8 $23.1 $22.5 $23.7 Energy Supply Planning and Acquisition of Electric Energy Supplies $31.3 $25.2 $25.2 $23.3 Planning and Acquisition of Natural Gas Supplies $14.3 $17.8 $11.7 $16.1 Total $66.4 $66.1 $59.4 $63.1 Reduction in Temp Services - Administrative • Eliminate college intern program - $50,000 • Reduce utility locating temps - $113,353 Reduction in Overtime Hours – Service • Electric Transmission & Distribution Maintenance - $40,000 New Revenue - Administrative • Increase retained revenue for developer deposits from 8% to 10% - $60,000 Base Budget Reduction(s) 12 Total Reductions: $263,353 12 FY 26/27 Budget Reduction Summary Reduction Additional Income Reduction Amount Total Fund Reduction in Temp Services N/A $163,353 $163,353 Utility Reduction in Overtime Hours N/A $40,000 $40,000 Utility Increase in Developer Cash Contributions $60,000 N/A $60,000 Utility Total $60,000 $203,353 $263,353 13 13 14