Rate Changes to be Proposed by Utilities

Published on March 14, 2025

picture of house with blocks in front of it. One has an up arrow, one has a down arrow, and one has a percentage sign.

The Los Alamos Department of Public Utilities (DPU) is proposing two rate changes, for electric and sewer services, and a future rate restructuring that would allow DPU to implement Time-of-Use billing for electric service.

Proposals for the rate ordinances will be introduced to the BPU at its regular monthly meeting on Wednesday, March 19, at 5:30 p.m., with the public hearings at the following BPU meeting on Wednesday, April 16, at 5:30 p.m. Ordinances for these proposals are posted to the DPU website on the Rates and Fees page at ladpu.com/rates.

If approved by BPU, the proposals will be introduced to the Los Alamos County Council on Tuesday, May 6, followed by a second public hearing on Tuesday, June 10. If the rate increases are not adopted, the DPU will need to cut expenses, likely by delaying capital projects. Such an action would increase the degradation of electric and sewer 0infrastructure. For electricity, it would also impact reliability and future capacity. For sewer service, DPU would need to figure out how to avoid Environmental Protection Agency (EPA) permit violations (and associated fines) due to sewer backups and overflows while delaying capital improvement projects on wastewater infrastructure.

Electric Rate Increase

DPU’s 10-year forecast includes annual investments in the electric distribution system that average more than $3 million annually for improvements. The money invested will serve to increase electric reliability for Los Alamos County as the improvements reduce the threat of outages due to aging infrastructure. Improvements will also be made to local distribution capacity, and will serve to accommodate electrification efforts of residents and businesses who install new electric appliances and heating/cooling systems, as well as installations of electric vehicle chargers.

Additionally, the BPU’s financial guidance require DPU to build cash reserves for each utility fund to ensure the department can meet operational needs, handle system retirement obligations, meet debt service requirements, and handle unanticipated system failures or disruptions. The rate proposal meets the guidance of the financial guidance.

DPU’s three most recent electric rate increases occurred in 2024, 2023 and 2015. However, they increases have not yet matched inflationary movement for that time period, as demonstrated by the Consumer Price Index (CPI). Between February 2015 and December 2024, the CPI increased by 34.5%. DPU’s electric rates for the same period increased by only 19.6%.

If approved by BPU and adopted by County Council, a 9% rate increase will take effect on July 1, 2025, with a second increase of 8% starting on July 1, 2026. For residential customers using 500 kWh of electricity per month, the impact will be an increase of $7.50 monthly the first year and an additional $7.25 per month beginning in July 2026.

Sewer Rate Increase

DPU’s wastewater infrastructure is vast and complicated due to the topography of Los Alamos County. Two wastewater treatment plans are necessary whereas most urban areas only need one. DPU also maintains a complicated network of pipes, pumps and lift stations to move sewage to the plants. For comparison, the City of Santa Fe has one wastewater plant and four lift stations for a population of 89,000 citizens. Los Alamos has a population of about 19,000.

The Los Alamos Wastewater Treatment Plant was replaced in 2007 and DPU is still paying off the associated loan. In White Rock, the new $30 million Water Resource Reclamation Facility (WRRF) went online in 2024. DPU has a low-interest loan for that plant replacement as well.

DPU must meet the same financial guidance requirements for the wastewater system as for the previously mentioned electric system. To keep the wastewater collection and treatment system resilient and sound, DPU’s capital projects for the future must ensure:

Adequate infrastructure to support increased demand for new housing in both White Rock and the Los Alamos townsite
Repair and replacement of aging infrastructure, including several lift stations and vitrified clay pipes, to reduce leaks and prevent sewer main breaks
Safe, quality effluent that meets all federal and state standards.

If approved by BPU and adopted by County Council, a 7% rate increase will take effect on July 1, 2025, with a second increase of 7% starting on July 1, 2026. For residential customers, the impact will be an increase of $4.24 monthly the first year and an additional $4.54 per month beginning in July 2026.

Time of Use Electric Rate Structure

Time of Use is a nationwide trending rate structure in which electricity rates vary according to the time of day. Electricity prices are higher during on-peak hours and lower during off-peak hours. Time of Use offers more control over energy bills because you can shift energy use to off-peak times when commodity rates are lower.

For Los Alamos County, shifting usage away from peak periods will not impact the overall cost of power for DPU, but it will have financial impacts on the maintenance, sizing and stability of the electric distribution system. When customers shift energy use away from peak periods, the result is more efficient and sustainable electricity consumption. This improves load balancing and grid stability, and puts less stress on infrastructure. For customers, it offers the possibility of lower bills.

If a Time of Use rate structure is adopted and implemented as proposed, it would include a residential demand rate. This is a variable charge that’s measured in kilowatts (kW) rather than kilowatt hours (kWh). It is based on the intensity at which electricity is used at a given time. For example, if a customer runs an air conditioner and multiple large appliances at the same time, the electrical demand is much higher than if they were to spread out the use of those appliances throughout the day.

Demand is measured by the maximum electricity used in a single hour during the month-long billing period. The customer will be billed for demand based on that single maximum amount. If that maximum was reached during an off-peak time, it will cost the customer slightly less than if it was reached during an on-peak time. Customers will still pay for energy consumption per kWh, as they do now, however they will pay less for energy consumed during off-peak periods. Without local historical data for Time of Use and the impact of choice related to on-peak and off-peak pricing, it is difficult to predict how the average bill may change. However, a frequently-asked-questions document on DPU’s website offers some examples. Those can be found under the Proposed Rate Changes section header at https://ladpu.com/rates.

If approved by BPU and adopted by County Council, the Time of Use rate structure and associated rates will not go into effect until July 1, 2026, as DPU would require a software implementation to facilitate the new structure. That implementation is expected to take at least a year.

Additional information

Frequently asked questions on all proposed changes can be found on DPU’s website under the Proposed Rate Changes section header at https://ladpu.com/rates.

Because DPU is a community-owned utility, BPU meetings are open to the public and held in a hybrid fashion so that citizens can attend in person or online. Meetings are held at 5:30 p.m. in Council Chambers at the Los Alamos County Municipal Building, 1000 Central Ave. The Zoom link for meetings is https://ladpu.com/BPULiveProceedings. For simplicity, both public hearings (BPU and County Council), can be attended remotely using the link https://ladpu.com/RateHearing.

Wed., March 19, 5:30 p.m.: Informal introduction of proposed ordinances at BPU
Wed., April 16, 5:30 p.m.: Public hearing at BPU
Tues., May 6, 6:00 p.m.: Formal introduction at County Council
Tues., June 10, 6:00 p.m.: Public hearing at County Council.