The 2016 Board of Public Utilities $495 million budget will include a $45 million increase because of environmental upgrades at the Nearman coal-fired power plant, according to BPU officials.
The increase amounts to about 10 percent. The budget was approved at the Wednesday, Dec. 16, BPU meeting.
BPU officials pointed out that despite the overall increase in the budget, there will be a $7 million decrease in operating costs. That is a 3.5 percent cut.
A BPU spokesman said government mandates have resulted in increased costs for electric utilities as they work to comply with environmental rules to provide cleaner power to customers.
The BPU listed its priorities for 2016:
• Guaranteeing the utility’s future position by developing customer communications, programs, products and services that enhance quality of life; including on-going social and traditional media outreach, and an improved customer lobby experience.
• Supporting more renewable energy by reviewing additional enhancements in solar and wind.
• Strengthen energy efficiency programs, especially for the low income customers.
• Monitoring, evaluating and addressing environmental regulations, execution of Nearman’s Air Quality Control (AQC) project and startup, and evaluation of current and future generation resources.
• Supporting economic development and retention opportunities to support growth in the service area with other community partners.
The BPU’s proposed budget for 2016 includes $201.4 million for the operating budget, compared to the $208.8 million adopted budget in 2015.
The BPU’s debt service budget will drop from $48.7 million in 2015 to $47.2 million in 2016, which is a $1.4 million decline.
The PILOT (payment in lieu of taxes) fee will drop from $33.2 in 2015 to $32.2 million in 2016, according to budget figures, a drop of more than $1 million.
The BPU’s capital budget increased from $159.6 million in 2015 to $214.5 million, a reflection of the expenditures for the air quality control measures at the Nearman plant.
According to BPU budget figures, the BPU derives most of its funds from electric revenues, which are projected to decline slightly for 2016, from $235.4 million to $226.2 million. Water revenues are projected to provide $44.7 million in 2016 as compared to $43.9 million in 2015. PILOT fees provide $32.2 million in 2016 as compared to $33.2 million in 2015. Additional funding sources are listed as $192.2 million for 2016 as compared to $137.5 million in 2015.