BY JAMES WERNICKE
Los Alamos
County Council votes tonight, August 25, on Ordinance 02-385, a natural gas rate increase that returns after Council rejected a two-year version of the same increase back in June. DPU’s own numbers, buried in the presentation accompanying the ordinance, tell a more complicated story than the “below statewide trends” framing Council has been given., a natural gas rate increase that returns after Council rejected a two-year version of the same increase back in June. DPU’s own numbers, buried in the presentation accompanying the ordinance, tell a more complicated story than the “below statewide trends” framing Council has been given.
The full bill impact is 16–17%, a figure that appears nowhere in DPU’s presentation. DPU’s presentation shows a 9% increase to the monthly service charge and a 41% increase to the fixed cost-recovery rate per therm — both correctly labeled as component changes, not bill totals. The same slide, in the rows directly below, works those components through to actual consumption: a summer bill rising from $67.45 to $78.53 and a winter bill from $110.01 to $128.93 — increases of 16% and 17%. Both figures are DPU’s own. What’s missing is any restatement of that bottom line on the ordinance’s “Recommendation & Summary” slide, which cites only that the proposed rate runs below statewide cost trends — a claim about the peer comparison, not the size of the increase. Council members relying on the summary slide would see no bill-level percentage at all, component or total.
The FY2026 budget itself projected the gas fund would post over $1 million in operating profit this year. The $760,000 loss cited to justify tonight’s increase comes from a budget-to-actual analysis through May — meaning the fund missed its own projection by roughly $1.8 million in a single year. Whether that’s a one-time weather or commodity-price event, or evidence the rate structure has been undersized all along, is a question worth DPU answering before residents are asked to revisit gas rates again next year.
“Below statewide trends” depends on which trend you pick. DPU’s presentation shows its proposed rate coming in below the EIA’s New Mexico statewide average at every consumption tier, which is true and is the number Council was given. But the same slide also shows two actual neighboring utilities — New Mexico Gas Company and Zia Natural Gas Company — priced 35 to 37% below Los Alamos at every tier, before and after this increase. A statewide average that blends dozens of service areas is a weaker comparison than the utilities actually operating next door, and the more favorable number is the one that made it into the recommendation slide.
Ratepayers are subsidizing the General Fund, and it’s more than the utility’s own accounting highlights. The FY2026 adopted budget shows the gas fund sending $705,501 to the General Fund this year — a franchise fee, an in-lieu-of-tax payment, and a “5% Revenue Transfer” that earlier budgets called, more plainly, a Profit Transfer. That’s roughly 8.4% of the fund’s gross revenue leaving before a single dollar goes toward pipes, meters, or PRV stations. This isn’t hidden. It’s itemized in the budget. What’s on the ballot this November, via Ordinance 758, which Council voted 7-0 on July 7 to send voters, is a Charter amendment striking one line from Section 509 — “all remaining operating profits shall be transferred to the County General Fund” — a residual skim on top of the 5% transfer, not the 5% transfer itself. The $390,680 line keeps flowing to the General Fund regardless of the outcome. What disappears is the additional claim on whatever profit is left after that, which the same budget schedule shows would have been $644,159 for gas this year had the fund performed as originally projected. Tonight’s rate ordinance and that ballot question are still the same conversation, since staff have said the ballot outcome could change how DPU recommends future rates — but voters deciding the amendment should know it trims the transfer at the margin, rather than ending it.
The capital program tells its own story. This year’s gas capital budget is $475,000 in DPU’s own CIP schedule and cash-projection table, covering the Elk Ridge Gas System Replacement ($400K) and general pipeline repair ($75K) — though a third table in the same budget book, the Gas Distribution program’s own sub-program breakdown, lists FY2026 capital expenditures at $825,000, a $350,000 discrepancy the budget book doesn’t reconcile. Even using the higher figure, the multi-year CIP schedule through FY2033 drops gas capital to $75,000–$225,000 a year, almost entirely routine pipeline repair — a fraction of what Electric Distribution budgets annually over the same years ($1.7 million to $9.95 million). If the rate increase is meant to fund “necessary infrastructure maintenance,” as the ordinance states, that maintenance is modest by DPU’s own multi-year plan.
None of this settles whether Los Alamos would be better served by New Mexico Gas Company or Zia taking over the system outright. That question turns on a cost-of-service study and an asset valuation that don’t yet exist, and pooling roughly 9,000 Los Alamos customers into a utility serving over 540,000 statewide could plausibly lower rates, or the acquisition cost could offset that gain, or the County could simply be trading the profit transfer for a smaller franchise fee it now has to replace some other way. Nor does it settle whether tonight’s increase is unwarranted: DPU’s budget-to-actual analysis through May showed the gas fund on track for a roughly $760,000 net loss against $5.6 million in sales revenue this year, and a fund running that far underwater needs some correction. What the record does support is that residents are being asked to pay 16–17% more for a system that already runs well above its private-utility neighbors, sends a meaningful share of ratepayer revenue to the General Fund, and isn’t reinvesting heavily in itself going forward. Council and BPU owe residents a fuller account of that trade-off than “below statewide trends,” and residents who will decide the Utilities Charter amendment this November deserve these numbers before they vote on the rate tonight, not after.