ECUA targets $250 million bond issue for AMI and transmission upgrades as reclamation facility debt retires

ECUA targets $250 million bond issue for AMI and transmission upgrades as reclamation facility debt retiresThe Florida utility plans to redirect expiring debt service to fund next-generation capital projects without raising rates, while simultaneously moving $2.5 million in annual pipe replacements to its operating budget.

Debt service on the Central Water Reclamation Facility will expire between 2028 and 2031, unlocking capacity for up to $250 million in new bonds.

Targeted capital projects include transitioning from AMR to AMI meters and building redundancy for a major downtown-to-uptown transmission main.

ECUA is moving $2.5 million in recurring water and sewer line replacements from its capital improvement program into the FY27 operating budget.

The utility recently received $3.7 million in PFAS settlements from Tyco and DuPont, though ongoing granular activated carbon operating costs are expected to rise.

The Emerald Coast Utilities Authority (ECUA) is drafting a long-term capital financing strategy that will leverage expiring debt to fund up to $250 million in new water infrastructure projects without requiring additional rate increases. During an April 13 budget workshop for the utility's fiscal year 2027, Executive Administration staff outlined plans to redirect debt service payments currently allocated to the Central Water Reclamation Facility (CWRF). With the CWRF bonds scheduled to be paid off between 2028 and 2031, ECUA intends to use the freed-up revenue stream to back a new series of bonds. This new funding capacity will target major infrastructure upgrades, including a system-wide transition from automated meter reading (AMR) to advanced metering infrastructure (AMI), which will allow customers to track daily water consumption and detect leaks. The bonds will also fund redundancy improvements for a large water transmission main running from downtown to uptown Pensacola, and help the utility push closer to a 1% annual infrastructure replacement target. In the nearer term, ECUA is restructuring how it finances routine pipeline replacement. For the FY27 budget, $2.5 million in recurring capital projects—such as antiquated water and sewer line replacements and inflow and infiltration (I&I) reduction efforts—will be moved from the capital improvement program into the operating budget. Staff noted this change aligns the budget with the reality that these are annual maintenance activities, ensuring they scale with future rate adjustments tied to the Consumer Price Index. The utility is also actively managing capital and operating expenses related to per- and polyfluoroalkyl substances (PFAS) compliance. ECUA has already received approximately 65% of its share from the nationwide 3M settlement, and recently secured an additional $2.5 million from Tyco and $1.2 million from DuPont. While settlement revenues are projected to cover about 80% of the capital costs for PFAS compliance, staff warned that the ongoing operational costs to replace and maintain granular activated carbon (GAC) systems will continue to rise as more units are brought online. Additionally, ECUA is pursuing state appropriations for a septic-to-sewer conversion project in the Ensley residential area, with $500,000 to $1 million currently pending legislative approval in a special session.