El Paso Water frames FY2027-28 choice between capital deferral and stormwater catch-up

El Paso Water frames FY2027-28 choice between capital deferral and stormwater catch-upEl Paso Water’s Public Service Board has been presented with four budget scenarios ranging from a high-risk cutback to accelerated investment, ahead of a planned January 2027 budget decision. The options expose the operational, regulatory and affordability consequences of slowing capital investment, including the potential cancellation of the Pure Water Center under the most severe case.

The strategic option maintains the utility’s existing five-year financial plan, while the accelerated case adds $296 million to the current budget and restores stormwater capital spending to an $80 million-a-year programme.

Under the high-risk scenario, El Paso Water said it would cancel CMAR contracts including the Pure Water Center and the Bustamante digester work, cut 300 positions and reduce its overall budget by 27% from the current level.

The lean case would reduce the overall budget by 8%, defer 21 CIP projects and eliminate 140 positions; the accelerated and strategic cases would raise the total budget by 25% and 8%, respectively.

For a typical 4 CCF customer, first-year bill impacts presented ranged from $0.52 under the high-risk option to $7 under accelerated investment. The utility will take the four scenarios to community meetings before a second workshop on 4 November.

El Paso Water has put four sharply contrasting FY2027-28 budget paths before its Public Service Board, defining a choice between preserving its existing capital programme, accelerating pipe and flood-control investment, or accepting major project deferrals and workforce cuts to constrain rates. The strategic option is the utility’s continuation case: it follows the five-year financial plan already established by the board and was described by staff as the previous form of its recommended budget. The accelerated option would add $296 million to the current total budget, principally to accelerate large-diameter water-main replacement and repair and to restore the stormwater capital programme to a 10-year implementation schedule. That stormwater catch-up would require $80 million a year over the next five years, compared with the $70 million annual programme previously envisaged before inflation. Staff said the accelerated scenario would place the utility back on the path of completing the stormwater master-plan projects within 10 years. The option would imply an estimated 5% stormwater-fee increase, equivalent to roughly $0.35-$0.50 per month for a residential customer, according to the CFO. At the other end, the high-risk option would reduce the total budget by 27% from the current level. Staff said reaching that target would require cancellation of ongoing construction manager-at-risk contracts, including the Pure Water Center and the digester element of the Bustamante Wastewater Treatment Plant expansion. It would also eliminate 300 positions, including licensed operators, delay maintenance and forfeit $31 million of grant-backed projects. The Pure Water Center is planned to produce 10 million gallons per day of drinking water from water arriving at the Bustamante plant. Staff told the board that the facility, first funded in 2012 and expected to enter operation in 2029, is now being built for $330 million. They also warned that cancelling projects could trigger termination claims, legal costs and permit enforcement action. A middle “lean” scenario would lower the total budget by 8%, retain CMAR projects but defer 21 other capital projects. The associated operating reductions would remove 140 positions and put $8 million in awarded grants at risk. Staff said both lower-investment options would shift maintenance towards a more reactive model. The board did not select an option. It asked staff to present five-year bill trajectories, clearer project-level comparisons and concise pros-and-cons summaries during public engagement. For a 4 CCF customer, which staff described as the typical customer rather than the utility’s 9 CCF average, first-year bill increases would range from $0.52 under the high-risk option to $7 under the accelerated case. Community meetings will gather views on priorities rather than ask customers to select one of the four scenarios. A second budget workshop is scheduled for 4 November 2026, with board action on the FY2027-28 budget planned for 13 January 2027.