Aztec city officials, utility experts and residents spent about two hours Tuesday discussing the city’s electric and water systems – aging infrastructure, rising power costs and looming deadlines that could reshape how the community keeps the lights on.
The workshop, held ahead of the City Commission meeting, laid out a series of costly and complex decisions for Aztec as it navigates regional power market changes, evaluates its contract with Guzman Energy Group and considers major upgrades to water and electric meters.
Electric Director John Wheeler outlined several options aimed at avoiding future outages. He said the financial implications of those options remain uncertain and that every number is fluid. Funding may or may not be available from the joint utility operations and maintenance fund.
Funds in the electric repair and replacement fund total about $5.3 million, while the water repair and replacement fund holds about $1.9 million and the wastewater fund about $2.27 million.
Mayor Mike Padilla said those funds were established by the commission about two years ago to address emerging utility repair needs. Being “very careful” with those funds is imperative, he said.
A proposal from Guzman Energy Group remains fluid, Wheeler said, adding the city is still evaluating the Renewal Adequacy requirements of the new Southwest Power Pool, which are mandatory.
“From a personal standpoint, I’d like to see us look at Guzman as hard as we possibly can and give them every opportunity we can to retain them as our power supplier,” Wheeler said.
A proposal from Guzman Energy Group is fluid, Wheeler said, adding they’re still looking at the Renewal Adequacy requirements of the new Southwest Power Pool, which are mandatory.
“From a personal standpoint, I’d like to see us look at Guzman as hard as we possibly can and give them every opportunity we can to retain them as our power supplier,” Wheeler said.
When Guzman took over as electric supplier in 2015, it reduced the city’s power cost from Public Service Co. of New Mexico from 8.2 cents to 4.25 cents per kilowatt-hour, a rate that extends through December. Wheeler said Guzman has supported the city’s employee association and community functions such as picnics and a golf tournament.
In 2027, Guzman’s cost would rise to 4.548 cents per kilowatt-hour, then to 4.76 cents in 2028, until the contract ends Feb. 28, 2030. Wheeler said that once the contract terminates, power costs could rise to about nine cents per kilowatt-hour, depending on the market.
Farmington Utility Electric System has reduced the kilowatt-hour charge from $3.25 to 25 cents on the transmission line from Bloomfield to Aztec. However, that annual savings of about $227,000 will be offset by costs assessed by the Southwest Power Pool, which is now the regional transmission operator.
Edwin Reyes of Enchantment Energy Consulting LLC said the goal of the regional transmission organization is to maximize efficiency by dispatching the least expensive power resources available, helping keep overall energy costs lower across the system.
He explained that there is no fixed rate, only an Annual Transmission Revenue Requirement, which is calculated by dividing the system’s total cost by peak usage for the month.
Returning to the city’s options, Wheeler said any agreement would need to be signed that evening to take effect April 1. If grant funding became available for building transmission lines, generators or solar facilities, it could “change everything,” he said.
Commissioner Brett Lanier raised concerns about water levels at Lake Powell and the potential impact on hydropower generation. Reyes said the five-year outlook is flat, but another spring like this one could require the city to purchase power from another grid source.
Wheeler mentioned the option of becoming an “island” and disconnecting from the grid, but it also comes with risks such as rising gas costs to run generators.
Padilla said generators would require a building and enclosure, Environmental Protection Agency approval, an Enterprise gas line and a certified operator.
“What about just throwing our entire system out for bid and letting, like, Farmington bid to purchase our grid … I mean, have you,” said business owner Ashley Seyfarth, “because clearly, like, the base charges in aspect are substantially higher.”
She said larger buying pools often secure better pricing and value. Commissioner Katie Buchholz said such a move would result in a loss of local control.
Wheeler also discussed solar power, saying his research showed that installing two megawatts of solar generation paired with four megawatts of battery storage would cost about $11.6 million.
Jason Sandel, president of Azetc Well Servicing, asked why the situation was being treated as an emergency. Wheeler said whatever decision the city makes must be implemented by 2030. Padilla said, “We just have a time frame” to sign an agreement.
“Capital outlay funds are plentiful these days, and we should be seeking them, particularly in the amount of $20 million for solar and battery,” Sandel said.
Jeric Jaramillo, interim public works director, said many of the city’s Badger-brand water meters are old and rely on moving parts.
“And these types of meters, the older they get, they slow down, they get build up,” he said.
Former Mayor pro tem Ken George said the meters are only about 20 years old and were all replaced after he joined the city.
Jaramillo said he reviewed last year’s budget and found $60,000 allocated for meter replacement. He advocated for long-term replacement using new ultrasonic meters, which have no moving parts and “communicate better with the current system.”
The new meters would reduce the labor-intensive need for manual readings, he said. Replacing only a handful at a time would take many years, while setting aside about $2.2 million to replace all meters could complete the project within two to three years.
George asked for data showing that the existing meters are failing to read accurately and causing revenue losses for the city. He questioned whether the Badger meters are “that bad.”
Former Commissioner Jack Scott said he was aware of three instances in which the city paid consultants to map all water valves, but those records could not be produced.
“And I’m being very critical here, because I’ve seen so much that has happened. If we’re going to spend money, let’s make sure it’s spent on what it needs to be spent on,” Scott said.
Amos Trujillo, Electric Department meter reader and warehouse supervisor, advocated for full replacement of the meters.
“We’re losing revenue, period,” Trujillo said.
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