In a recent meeting of the Denton Public Utilities Board, significant discussions centered around the proposed budget for fiscal year 2026, particularly regarding electric utility rates and infrastructure investments. The board is considering a substantial 34.2% increase in the electric budget compared to the previous year, primarily driven by rising purchase power costs. This increase reflects ongoing adjustments in the energy market, with staff committed to updating forecasts to ensure accuracy before finalizing recommendations for the City Council.

Importantly, there will be no base rate increase for Denton Municipal Electric (DME) in fiscal year 2026. Instead, adjustments will be made through the Energy Cost Adjustment (ECA) and the Transmission Cost Recovery Factor (TCRF), which will continue to be reviewed quarterly and annually, respectively. The board highlighted the implementation of the ECA large load, which is expected to enhance the financial stability of the fund by establishing a reserve target.

The financial outlook for DME includes projected revenues of $526.6 million and expenses of $509.5 million, resulting in a net income of $17 million. Through a zero-based budgeting approach, DME identified $3.3 million in cost reductions, which include cuts to insurance for outages and a reduction in lobbying expenses. Additionally, DME plans to maintain six vacancies throughout 2026, contributing to these savings.

Looking ahead, DME's five-year capital plan anticipates $63.9 million in new funding, with a significant portion expected to be debt-funded. Key projects include $8.3 million for new residential and commercial developments, $18.2 million for distribution transformers and substations, and nearly $10 million for technology and electric relocations. The board also mentioned ongoing transmission overload projects awaiting approval from the Electric Reliability Council of Texas (ERCOT).

Overall, the discussions at the meeting underscore the board's proactive approach to managing costs while planning for future infrastructure needs, ensuring that Denton’s electric utility remains resilient and responsive to community demands. As the budget process continues, updates will be provided to the council to facilitate informed decision-making ahead of the budget adoption.