Adoption of:
8) SFPUC Biennial Operating Budget, FY 2026-27 & FY 2027-28 9) Capital Budget, FY 2026-27 & FY 2027-28
10) 10-Year Capital Plan, FY 2026-27 to FY 2035-36
11) 10-Year Financial Plan, FY 2026-27 to FY 2035-36
February 10, 2026
1 Item 8: Adoption of SFPUC
Biennial Operating Budget for FY
2026-27 and FY 2027-28
2 SFPUC Operating Budget Overview
3 Budget will grow by 12% or $256
million over the next two years.
Capital is greatest contributor,
growing by $183 million, or 23%.
Purchase of Power will
decrease by $22 million, or -4%.
New proposals account for
roughly $35.4 million net new
costs.
$2,087M $2,169M
-
500
1,000
1,500
2,000
2,500
FY 2026 FY 2027 FY 2028
SFPUC Proposed Budget
($ millions)
Operating Uses Capital Uses Purchase of Power
$2,343M
4 Key Changes to the Operating Budget
Capital
• Debt service to finance capital costs will increase from $525M to $687M by FY 27-28 (31%) • Revenue-funded capital will increase from $266M to $292M (8%) Purchase of Power
• Slight decrease from $512M to total of $490M in FY 27-28 based on most up-to-date power market projections (-4%) Personnel
• Increases in personnel costs are driven by citywide COLAs on salaries and benefits • 37 new permanent FTE proposed, most of which are filled by staff in temporary roles New Operating Budget Proposals
• Non-discretionary costs to maintain existing services including software upgrades, permit fees, and regulatory requirements
• Costs to operate new facilities such as Ozone, Biosolids, and Biogas Facilities • Customer Incentive Programs in Power to encourage electrification • Shift from reliance of community programs on addbacks to annual operating budgets Item 9: Adoption of Two-
Year Capital Budget
FY 2026-27 & FY2027-28, including Capital Financing Authorization Item 10: Adoption of 10-
Year Capital Plan
FY 2026-27 to FY 2035-36
5 6
Capital Improvement Plan (CIP) Summary
$9.1B Water and Wastewater Portfolio
Funds upgrades responsive to regulatory
mandates and critical infrastructure
renewal for many assets 100+ years.
Focus on water & sewer system quality,
reliability, and compliance.
$3.4B Power Portfolio
Funds strategic investments for SF's
clean energy future.
Focus on customer growth, grid
modernization, and resiliency.
Item 9: Two-Year Capital Budget
7 $528
$671
$311
$266
$161
$208 $51
$43
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
FY2027 FY2028
$ in Millions
Two-Year Capital Budget by Enterprise
Wastewater Water Hetch Hetchy Water Hetchy Hetchy Power CleanPowerSF Proposed $1.1 billion in FY 26-27 and $1.2 billion FY 27-28 advances critical projects and is funded by a combination of revenue and debt proceeds.
Item 9: Debt Authorization
8 FY 2026-27 FY 2027-28 Total
Wastewater 503,943,037 661,793,229 1,165,736,266
Water Regional & Local 273,876,750 223,980,983 497,857,733 Hetchy Water 47,139,555 6,874,629 54,014,183
Water Total 321,016,305 230,855,612 551,871,916
Power 40,219,718 97,945,219 138,164,938
PUC Total 865,179,060 990,594,060 1,855,733,120
Item 10: 10-Year Capital Plan
9 0
200
400
600
800
1000
1200
1400
1600
1800
FY 26-27 FY 27-28 FY 28-29 FY 29-30 FY 30-31 FY 31-32 FY 32-33 FY 33-34 FY 34-35 FY 35-36 $ in Millions
Wastewater Water Hetchy Water Hetchy Power CleanPowerSF Proposed $12.5 billion in appropriations over 10 years for major infrastructure replacement, renewal, and modernization across all three enterprises.
Item 11: Adoption of 10-Year
Financial Plan
FY 2026-27 to FY 2035-36
10 11
10-Year Financial Plan Background
• Updated annually on a rolling basis, as required by the San Francisco Charter
• Plans are complex Excel-based financial models
• Forecast revenues, expenses, and rates
• Confirm compliance with all financial policies
• Inputs from Capital Finance, Budget, Power Risk Management, and Water Resources Planning
• Accompanying written report details assumptions and key takeaways • Proposed plans balance competing pressures for affordability, long- term financial sustainability, regulatory compliance, and infrastructure investment
12 Key Policies That Guide Financial Planning
• Financial policies set
guidelines for rate-setting
and budgeting decisions
• Approved by Commission
and reviewed periodically
• Support SFPUC’s bond credit
ratings
• Sets minimum reserves as a percent of operating
expenses
• Provides cushion of reserves for emergencies
Fund Balance Reserve Policy
• Ensures sufficient revenues to pay debt service
• Meets bond indenture requirements
Debt Service Coverage Policy
• Sets target bill as a percent of typical and low-income household income
• If not meeting, requires justification and plan to address • Water/wastewater only
Affordability Policy
13 Expense Assumptions
Operating Expenses
• Base of FY 2026-27 and FY 2027-28
proposed budgets
• Assume savings based on historic
percent of budget spent
• Inflationary growth afterward
• 6% on fringe benefits
• 3% on other costs
• Power supply costs modelled
based on customer demands,
market prices
Capital Financing
• Interim financing with commercial
paper
• Revenue bonds refund commercial
paper
• 3.75-6% interest rate
• 30-year amortization
• Level debt service
• Federal and state low-cost loans
(WIFIA and SRF) incorporated only
if executed
Water & Wastewater Sales Forecasted Flat
58.6 61.0
51.6 110.8
134.9
116.5
53.8 53.4
52.9 51.6
129.2
124.7
125.4 130.5
0 20
40 60
80 100
120
140
160Annual Water Sales (MGD)
Actual Retail Sales (MGD) Actual Wholesale Sales (MGD)
Projected Retail Sales (MGD) Projected Wholesale Sales (MGD) 14 • More conservative
forecast this year vs.
last year’s plan –
especially for wholesale
• Long-term trends from
planning documents,
with adjustment down
• Price elasticity
• Conservation
• Job & population growth
• Wastewater volumes
are based on retail
water
Water Expense Summary
15 • Average annual
growth: 4.4%
• Capital is the driver
• Costs of regional
water system split
between retail and
wholesale
customers
43%
46%
49%
42%
7%
12%
$812 $825
$886 $910 $951
$1,011 $1,069
$1,131 $1,173 $1,228 $1,250
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
FYE
2026
FYE
2027
FYE
2028
FYE
2029
FYE
2030
FYE
2031
FYE
2032
FYE
2033
FYE
2034
FYE
2035
FYE
2036
Millions
Operations & Maintenance Debt Service Revenue-Funded Capital Wastewater Expenses More than Double
16 • Average annual
growth: 8.4%
• Capital is the driver
• Huge increase in
capital costs
translates into
higher debt
service costs
• All costs borne by
San Francisco retail
ratepayers
64%
42%
17%
43%
19%
15%
$544 $588
$655 $709
$805
$892
$962
$1,029
$1,118 $1,173 $1,225
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
FYE
2026
FYE
2027
FYE
2028
FYE
2029
FYE
2030
FYE
2031
FYE
2032
FYE
2033
FYE
2034
FYE
2035
FYE
2036
Millions
Operations & Maintenance Debt Service Revenue-Funded Capital 17 Water & Wastewater Rate Plan
$171
$389
$490
$0
$100
$200
$300
$400
$500
$600
Average Monthly Residential Water and Sewer Bill
Sewer Bill
Water Bill
Typical Household Affordability Target
Low-Income Household Affordability Target
Retail
Water Rate
Change
Wastewater
Rate
Change
Combined
Bill
Increase
Wholesale
Water Rate
Change
FYE 2027* 7.0% 15.0% 10.5% 7.6%
FYE 2028* 7.0% 14.5% 12.5% 7.2%
FYE 2029 7.5% 13.0% 10.7% 3.1%
FYE 2030 7.5% 13.0% 11.3% 2.5%
FYE 2031 7.5% 12.0% 10.4% 4.5%
FYE 2032 7.0% 8.0% 7.7% 5.5%
FYE 2033 6.0% 8.0% 7.3% 5.3%
FYE 2034 6.0% 8.0% 7.3% 3.0%
FYE 2035 4.5% 5.0% 3.7% 3.7%
FYE 2036 4.5% 5.0% 4.8% 0.5%
10-Year Avg 6.4% 10.1% 8.6% 4.3%
20-Year Avg 3.8% 6.4% 5.4% 3.8%
* Rates expected to be adopted in Spring 2026
18 Water & Wastewater Discounted Bills
• Low income Customer
Assistance Program
(CAP) currently provides
over 7,600 households
25-40% bill discounts
• Customers enrolled in
CAP will remain under
the 5% of income bill
target throughout the
20-year period
$102
$294
$0
$50
$100
$150
$200
$250
$300
$350
$400
Average Monthly Discounted Residential Water and Sewer
Bill
Discounted Sewer Bill
Discounted Water Bill
Low-Income Household Discounted Bill Affordability Target Water & Wastewater Rate Increases vs. Other Utilities
19 • Rate survey
context: our
near-term bill
projections are
line with peer
agencies
• Few peers
publish long-
term rate
forecasts
$222
$205 $200 $192 $189 $178 $168 $161
$-
$50
$100
$150
$200
$250
Los
Angeles
(LADWP &
LASAN)
City of
Santa
Clara
City of San
Diego
(Projected
FY 2027)
City of
Santa Cruz
(Projected
FY 2027)
San
Francisco
(Projected
FY 2027)
City of
Oakland &
EBMUD
(Projected
FY 2027)
San
Francisco
(SFPUC)
City of San
Jose
Water Bill Sewer Bill
Hetch Hetchy Growing Customer Base
20 • Lower short-term
power sales due to
delays in
redevelopment
projects
• Higher long-term power
sales due to large
customer acquisition
and electrification
• 6.9% annual growth
985 1,036
837
938
957
983
1,387
1,862
0 200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Power Sales (GWh)
Actual Retail Sales Projected Retail Sales
Hetch Hetchy Power Expenses
21 • Average annual growth:
10.8%
• FYE 2029 and FYE 2030
adjustments related to
construction schedules’
impacts on power
generation and cost
shares for new customer
infrastructure
• Much of the expense
growth related to capital
and supply costs for new
customers, and offset by
additional revenues
37%
44%44%
20%
17%
14%
18%
$296
$362
$407
$476 $492 $472 $514
$560
$608
$739
$824
$-
$100
$200
$300
$400
$500
$600
$700
$800
$900
FYE
2026
FYE
2027
FYE
2028
FYE
2029
FYE
2030
FYE
2031
FYE
2032
FYE
2033
FYE
2034
FYE
2035
FYE
2036
Millions
Power Supply and Delivery Other Operations & Maintenance Debt Service Revenue-Funded Capital
Hetch Hetchy Power Rate Plan
Retail Rate
Increase
FYE 2027* 7.0%
FYE 2028 7.0%
FYE 2029 6.5%
FYE 2030 6.5%
FYE 2031 6.5%
FYE 2032 6.5%
FYE 2033 6.5%
FYE 2034 6.5%
FYE 2035 2.5%
FYE 2036 2.5%
10-Year Avg 5.8%
22 * Rates expected to be adopted in Spring 2026
Rates shown are for retail, non-municipal customers.
General Use rates for certain municipal depts. increase by $0.03/kWh annually until they reach equivalent retail rate $98
$209
$-
$50
$100
$150
$200
$250
Average Monthly Residential Hetch Hetchy Power Bill
CleanPowerSF Volumes
23 405
2,980
2,995
3,106
3,189
3,973
0 500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500Power Sales (GWh)
Actual Retail Sales (GWh) Projected Retail Sales (GWh)
• Entirely new forecast
methodology
• Includes growth from:
• Population and job
growth
• Electric vehicle
saturation
• Replacement of gas
appliances with
electric
• 2.5% annual growth
CleanPowerSF Expense
24 • Average annual
growth: 5.4%
• Expenses driven
by power supply
costs and include
contingencies to
account for
uncertainty
• Some expense
growth related to
increased sales
assumptions
80%
87%
$380 $399 $397
$425 $431
$463 $489 $512
$539
$585
$645
$0
$100
$200
$300
$400
$500
$600
$700
FYE
2026
FYE
2027
FYE
2028
FYE
2029
FYE
2030
FYE
2031
FYE
2032
FYE
2033
FYE
2034
FYE
2035
FYE
2036
Millions
Power Supply Other Operations & Maintenance Revenue-Funded Capital CleanPowerSF Rate Plan
$56 $59 $59 $63
$2
$9 $9 $4
$36
$36 $27 $27
$56 $59 $59 $63
$2
$35 $26 $26
$27
$5
$2 $2
$93
$104
$95 $94 $91 $85 $85
$92
$0
$50
$100
$150
CleanPowerSF
July 2025
PG&E
July 2025
CleanPowerSF
Jan 2026
PG&E
Jan 2026
CleanPowerSF
Mar 2026
PG&E
Mar 2026
CleanPowerSF
Jan 2027
PG&E
Jan 2027
CleanPowerSF vs. PG&E Average Monthly Residential Bills (E-TOU-C) PG&E Delivery PG&E Fees (PCIA/FFS) CleanPowerSF Generation PG&E Generation PG&E Credits (PCIA)
25 Generation
Rate Increase
FYE 2027* -20% to -25%
FYE 2028 8.5%
FYE 2029 8.0%
FYE 2030 5.5%
FYE 2031 5.5%
FYE 2032 4.5%
FYE 2033 3.0%
FYE 2034 3.0%
FYE 2035 3.0%
FYE 2036 3.0%
10-Year Avg 1.4% to 2.1%
* Rates adopted in January 2026 and
effective March 2026
26 Plans Meet & Exceed All Financial Policy
Targets
Metric Policy Requirements Water Wastewater Hetch Hetchy Power CleanPowerSF
Fund Balance as a % of
Operating Expenses
Minimum 25% and if
>68% note plan 34% – 42% 35% – 45% 36% – 93% n/a
Days Cash on Hand
(CleanPowerSF)
Minimum 150 and
target 180 n/a n/a n/a 160 - 213
Current Debt Service
Coverage Minimum 1.10x 1.23x – 1.27x 1.26x – 1.36x 1.79x – 4.22x n/a Indenture Debt Service
Coverage Minimum 1.35x 1.61x – 1.70x 1.47x – 1.72x 3.30x – 16.74x n/a Revenue-Funded % of
Capital Plan Minimum 15-30% Water Enterprise:
37% 24% Hetch Hetchy Water
& Power: 34% 100%
Typical Household
Affordability
(Water & Sewer)
Max. 3.0% of 40th
percentile household
income or justify
1.9% - 3.1%
exceeding target FYE 2034-FYE 2043 n/a n/a
Low-Income Household
Affordability
(Water & Sewer)
Max. 7.0% of 20th
percentile household
income or justify
4.6% - 7.4%
exceeding target FYE 2034-FYE 2044 n/a n/a
27 Questions?
28 Water Financial Plan
FYE 2026 FYE 2027 FYE 2028 FYE 2029 FYE 2030 FYE 2031 FYE 2032 FYE 2033 FYE 2034 FYE 2035 FYE 2036 Beginning Fund Balance ($M) $ 218.5 $ 173.1 $ 159.5 $ 139.8 $ 144.9 $ 152.6 $ 156.7 $ 165.6 $ 172.7 $ 188.0 $ 200.7 Sources ($M)
Retail Water Sales 358.7 380.8 405.8 435.0 466.1 499.1 534.0 566.1 599.8 627.6 654.9 Wholesale Water Sales 356.0 386.3 415.2 433.1 444.9 466.9 493.6 521.2 537.4 560.3 564.7 Other Miscellaneous Income 51.6 44.8 44.9 46.8 47.8 48.9 49.8 50.7 51.6 52.8 53.9 Total Sources $ 766.4 $ 811.9 $ 865.9 $ 914.9 $ 958.8 $ 1,014.9 $ 1,077.4 $ 1,137.9 $ 1,188.8 $ 1,240.6 $ 1,273.5 Uses ($M)
Operations & Maintenance 322.7 322.7 342.5 355.9 369.7 383.6 397.8 412.5 426.7 440.2 454.0 Hetchy Water Operating Transfer 54.1 60.6 64.9 67.7 70.9 72.8 74.8 76.9 78.8 80.7 82.3 Debt Service 339.3 343.9 370.7 383.9 408.3 439.7 481.9 511.2 543.0 572.1 582.2 Revenue-Funded Projects 95.6 98.2 107.6 102.3 102.1 114.8 114.1 130.2 125.0 134.8 131.2 Total Uses $ 811.8 $ 825.5 $ 885.7 $ 909.8 $ 951.0 $ 1,010.9 $ 1,068.5 $ 1,130.8 $ 1,173.5 $ 1,227.9 $ 1,249.7 Net Revenues ($M) $ (45.4) $ (13.6) $ (19.8) $ 5.1 $ 7.8 $ 4.0 $ 8.9 $ 7.1 $ 15.3 $ 12.7 $ 23.8 Ending Fund Balance ($M) $ 173.1 $ 159.5 $ 139.8 $ 144.9 $ 152.6 $ 156.7 $ 165.6 $ 172.7 $ 188.0 $ 200.7 $ 224.5 Rate Increase - Retail 5.0% 7.0% 7.0% 7.5% 7.5% 7.5% 7.0% 6.0% 6.0% 4.5% 4.5% Rate Increase - Wholesale 2.3% 7.9% 6.9% 3.7% 2.2% 4.5% 5.3% 5.1% 2.7% 3.8% 0.3% Fund Balance as % of Op. Expenses 45.9% 41.6% 34.3% 34.2% 34.6% 34.3% 35.0% 35.3% 37.2% 38.5% 41.9% Debt Service Coverage (Current) 1.11 1.23 1.23 1.27 1.27 1.27 1.26 1.27 1.26 1.26 1.27 Debt Service Coverage (Indenture) 1.63 1.70 1.62 1.65 1.65 1.63 1.61 1.61 1.61 1.62 1.66 Revenue-Funded % of Capital 37.5%
Water Sales - Retail (MGD) 53.4 52.9 52.5 52.4 52.2 51.9 51.7 51.8 51.8 51.8 51.6 Water Sales - Wholesale (MGD) 124.7 125.4 125.7 126.8 127.5 128.1 128.3 129.2 129.7 130.3 130.5 Single Family Residential Avg. Monthly…
Water Usage (CCF) 4.6 4.5 4.5 4.5 4.4 4.4 4.4 4.4 4.4 4.4 4.4 Water Bill $72 $75 $80 $87 $91 $98 $105 $111 $118 $123 $129 Water/Sewer Bill $171 $189 $212 $235 $261 $289 $311 $334 $358 $371 $389 Avg. Bill as % of Typical HH Income 1.8% 1.9% 2.1% 2.3% 2.5% 2.6% 2.8% 2.9% 3.0% 3.0% 3.1% Avg. Bill as % of Low-Income HH Income 4.3% 4.6% 5.1% 5.5% 5.9% 6.3% 6.6% 6.9% 7.2% 7.2% 7.4% Disc. Bill as % of Low-Income HH Income 2.6% 2.8% 3.0% 3.3% 3.5% 3.8% 4.0% 4.1% 4.3% 4.3% 4.4% 29 Wastewater Financial Plan
FYE 2026 FYE 2027 FYE 2028 FYE 2029 FYE 2030 FYE 2031 FYE 2032 FYE 2033 FYE 2034 FYE 2035 FYE 2036 Beginning Fund Balance ($M) $ 181.3 $ 137.6 $ 114.2 $ 98.6 $ 106.1 $ 105.9 $ 108.8 $ 110.1 $ 119.0 $ 120.0 $ 121.2 Sources ($M)
Sewer Charges 472.8 538.4 613.4 690.7 778.3 867.5 936.1 1,009.9 1,090.1 1,144.4 1,199.7 Other Miscellaneous Income 27.9 26.1 25.6 25.4 26.2 26.9 27.6 28.3 29.3 29.8 30.3 Total Sources $ 500.7 $ 564.5 $ 639.0 $ 716.1 $ 804.5 $ 894.5 $ 963.7 $ 1,038.2 $ 1,119.3 $ 1,174.2 $ 1,230.0 Uses ($M)
Operations & Maintenance 243.5 254.8 276.2 285.4 295.2 305.7 316.7 328.2 339.3 349.6 360.2 Debt Service 146.0 247.6 283.3 329.0 383.3 462.9 515.5 556.7 593.6 608.6 658.2 Revenue-Funded Projects 154.9 85.5 95.0 94.2 126.3 123.0 130.3 144.4 185.4 214.8 206.1 Total Uses $ 544.4 $ 587.9 $ 654.5 $ 708.6 $ 804.7 $ 891.5 $ 962.5 $ 1,029.3 $ 1,118.3 $ 1,173.0 $ 1,224.5 Net Revenues ($M) $ (43.7) $ (23.4) $ (15.6) $ 7.5 $ (0.2) $ 2.9 $ 1.2 $ 8.9 $ 1.0 $ 1.2 $ 5.5 Ending Fund Balance ($M) $ 137.6 $ 114.2 $ 98.6 $ 106.1 $ 105.9 $ 108.8 $ 110.1 $ 119.0 $ 120.0 $ 121.2 $ 126.7 Rate Increase - Retail 9.0% 15.0% 14.5% 13.0% 13.0% 12.0% 8.0% 8.0% 8.0% 5.0% 5.0% Fund Balance as % of Op. Expenses 56.5% 44.8% 35.7% 37.2% 35.9% 35.6% 34.8% 36.3% 35.4% 34.7% 35.2% Debt Service Coverage (Current) 1.77 1.26 1.28 1.31 1.33 1.27 1.26 1.28 1.31 1.36 1.32 Debt Service Coverage (Indenture) 2.74 1.72 1.63 1.64 1.61 1.51 1.47 1.49 1.52 1.56 1.52 Revenue-Funded % of Capital 24.1%
Billed Discharge Volumes (MGD) 45.1 44.5 44.1 44.0 43.8 43.5 43.3 43.4 43.3 43.3 43.1 Single Family Residential Avg. Monthly…
Billable Volumes (CCF) 4.3 4.2 4.2 4.1 4.1 4.1 4.1 4.1 4.1 4.0 4.0 Sewer Bill $99 $113 $132 $148 $170 $191 $206 $222 $240 $248 $260 Water/Sewer Bill $171 $189 $212 $235 $261 $289 $311 $334 $358 $371 $389 Avg. Bill as % of Typical HH Income 1.8% 1.9% 2.1% 2.3% 2.5% 2.6% 2.8% 2.9% 3.0% 3.0% 3.1% Avg. Bill as % of Low-Income HH Income 4.3% 4.6% 5.1% 5.5% 5.9% 6.3% 6.6% 6.9% 7.2% 7.2% 7.4% Disc. Bill as % of Low-Income HH Income 2.6% 2.8% 3.0% 3.3% 3.5% 3.8% 4.0% 4.1% 4.3% 4.3% 4.4% 30 Hetch Hetchy Financial Plan
FYE 2026 FYE 2027 FYE 2028 FYE 2029 FYE 2030 FYE 2031 FYE 2032 FYE 2033 FYE 2034 FYE 2035 FYE 2036 Beginning Fund Balance ($M) $ 288.0 $ 283.0 $ 234.8 $ 179.2 $ 113.1 $ 129.3 $ 139.5 $ 146.6 $ 164.4 $ 189.1 $ 237.1 Sources ($M)
Retail Power Sales 216.7 240.8 274.6 314.9 367.7 412.3 461.7 509.7 562.3 708.2 774.4 Wholesale Power Sales 27.6 22.5 20.6 26.1 28.3 16.7 15.7 20.3 20.0 14.5 14.9 Gas & Steam Sales 22.8 20.4 20.8 20.8 21.1 21.1 21.8 22.4 23.1 23.8 24.5 Water Sales 2.5 2.7 2.9 3.1 3.3 3.6 3.8 4.1 4.4 4.6 4.8 Hetchy Transfer 54.1 60.6 64.9 67.7 70.9 72.8 74.8 76.9 78.8 80.7 82.3 Other Miscellaneous Income 43.0 73.0 75.5 71.6 114.3 51.7 36.4 39.4 43.3 58.3 66.8 Total Sources $ 366.8 $ 419.9 $ 459.2 $ 504.3 $ 605.5 $ 578.2 $ 614.1 $ 672.9 $ 731.9 $ 890.0 $ 967.7 Uses ($M)
Power Supply & Delivery Charges 110.3 127.9 139.8 169.2 147.6 194.1 183.3 215.6 242.0 328.9 364.2 Other Operations & Maintenance 205.8 203.5 206.6 207.1 212.2 218.2 225.3 232.9 240.2 247.8 255.6 Debt Service 13.6 17.7 17.7 36.0 61.9 75.6 94.9 107.7 125.6 125.6 142.8 Revenue-Funded Projects 42.2 119.1 150.7 158.3 167.8 80.1 103.5 99.0 99.3 139.8 169.4 Total Uses $ 371.8 $ 468.1 $ 514.8 $ 570.5 $ 589.4 $ 567.9 $ 607.0 $ 655.1 $ 707.2 $ 842.1 $ 932.0 Net Revenues ($M) $ (5.0) $ (48.2) $ (55.6) $ (66.2) $ 16.2 $ 10.3 $ 7.1 $ 17.8 $ 24.7 $ 47.9 $ 35.8 Ending Fund Balance ($M) $ 283.0 $ 234.8 $ 179.2 $ 113.1 $ 129.3 $ 139.5 $ 146.6 $ 164.4 $ 189.1 $ 237.1 $ 272.8 Rate Increase - Retail 10.0% 7.0% 7.0% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 2.5% 2.5% Rate Increase - General Use 15.9% 13.7% 12.1% 10.8% 9.7% 8.9% 8.1% 7.5% 7.0% 6.5% 6.1% Fund Balance as % of Power Op. Expenses 117.7% 93% 66% 36% 42% 38% 39% 40% 42% 44% 47% Debt Service Coverage (Current) 4.35 2.64 4.22 2.74 3.47 1.82 1.92 1.87 1.79 2.29 2.24 Debt Service Coverage (Indenture) 27.03 16.74 14.81 5.92 5.58 3.67 3.47 3.40 3.30 4.18 4.15 Revenue-Funded % of Capital 33.5%
Power Sales - Retail (GWh) 957 983 1,035 1,103 1,193 1,243 1,298 1,340 1,387 1,743 1,862 Residential Avg. Monthly…
Electric Usage (kWh) 312 315 320 325 331 337 345 353 362 372 381 Electricity Bill $98 $106 $115 $124 $134 $146 $159 $173 $189 $199 $209 Avg. Bill as % of Typical HH Income 1.0% 1.1% 1.1% 1.2% 1.3% 1.3% 1.4% 1.5% 1.6% 1.6% 1.6% Avg. Bill as % of Low-Income HH Income 2.5% 2.6% 2.7% 2.9% 3.0% 3.2% 3.4% 3.6% 3.8% 3.9% 3.9% Disc. Bill as % of Low-Income HH Income 1.7% 1.8% 1.9% 2.0% 2.1% 2.2% 2.4% 2.5% 2.7% 2.7% 2.8% 31 CleanPowerSF Financial Plan
FYE 2026 FYE 2027 FYE 2028 FYE 2029 FYE 2030 FYE 2031 FYE 2032 FYE 2033 FYE 2034 FYE 2035 FYE 2036 Beginning Fund Balance ($M) $ 214.0 $ 254.1 $ 204.2 $ 182.1 $ 169.0 $ 181.1 $ 197.6 $ 222.1 $ 251.0 $ 283.2 $ 303.3 Sources ($M)
Retail Electricity Sales 389.3 330.7 367.2 404.5 436.8 471.9 505.8 531.7 561.6 594.1 631.4 Wholesale Power Sales 21.9 8.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other Miscellaneous Income 9.2 9.6 7.9 7.2 6.7 7.2 7.8 8.7 9.7 10.8 11.6 Total Sources $ 420.5 $ 348.6 $ 375.1 $ 411.7 $ 443.5 $ 479.1 $ 513.6 $ 540.4 $ 571.3 $ 604.9 $ 643.0 Uses ($M)
Operations & Maintenance 379.9 398.4 397.0 424.3 431.1 462.3 488.7 511.2 538.3 575.0 620.5 Debt Service 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Revenue-Funded Projects 0.5 0.1 0.1 0.6 0.3 0.3 0.3 0.3 0.8 9.8 24.5 Total Uses $ 380.4 $ 398.5 $ 397.1 $ 424.9 $ 431.4 $ 462.6 $ 489.0 $ 511.6 $ 539.1 $ 584.8 $ 645.0 Net Revenues ($M) $ 40.0 $ (49.9) $ (22.0) $ (13.2) $ 12.1 $ 16.5 $ 24.6 $ 28.8 $ 32.2 $ 20.1 $ (2.0) Ending Fund Balance ($M) $ 254.1 $ 204.2 $ 182.1 $ 169.0 $ 181.1 $ 197.6 $ 222.1 $ 251.0 $ 283.2 $ 303.3 $ 301.3 Generation Rate Change 0.0% -23.1%* 8.5% 8.0% 5.5% 5.5% 4.5% 3.0% 3.0% 3.0% 3.0% Days Cash on Hand 262 207 185 160 169 172 183 198 212 213 196 Revenue-Funded % of Capital 100.0%
Power Sales - Retail (GWh) 3,106 3,189 3,267 3,333 3,412 3,493 3,583 3,656 3,748 3,851 3,973 Residential Avg. Monthly…
Electric Usage (kWh) 235 238 241 243 247 251 255 259 263 269 276 Generation Bill $36 $27 $30 $32 $35 $37 $39 $41 $43 $46 $48 Total Electricity Bill $104 $94 $102 $109 $115 $122 $130 $135 $141 $149 $154 Avg. Bill as % of Typical HH Income 1.1% 1.0% 1.0% 1.1% 1.1% 1.1% 1.2% 1.2% 1.2% 1.2% 1.2% Avg. Bill as % of Low-Income HH Income 2.6% 2.3% 2.4% 2.5% 2.6% 2.7% 2.8% 2.8% 2.8% 2.9% 2.9%
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
DEPARTMENT Financial Services
AGENDA NO.
11 MEETING DATE
February 10, 2026
Calendar: Regular Calendar
Project Manager: Erin Corvinova
Adopt the SFPUC 10-Year Financial Plan for FY 2026-27 through FY 2035-36
Summary of Proposed
Commission Action:
Public hearing to consider and possible action to adopt the San Francisco Public Utilities Commission 10-Year Financial Plan for FY 2026-27 through FY 2035-36.
Background: The San Francisco Public Utilities Commission (SFPUC) performs capital improvements to maintain, improve, and replace its infrastructure and facilities to assure high quality utility service for its customers and must plan for future investments in its systems. Under Charter Section 8B.123, this Commission must hold public hearings on an annual basis to review, update, and adopt a Long-Term Capital Improvement Program (10-Year Capital Plan, or Capital Plan) and a Long-Range Financial Plan (10-Year Financial Plan, or Financial Plan). The Capital Plan contains a list of projects to be executed during the planning horizon, including cost estimates and schedules. The Financial Plan includes estimates of operations and maintenance expenses, as well as revenue- funded, and debt-funded capital expenses over a 10-year projection period. The Financial Plan includes utility sales volumes assumptions and projected rate changes required to generate revenues to meet or exceed SFPUC financial policy minimums over the 10-year projection period. Together, the Capital Plan and the Financial Plan serve as a basis and provide supporting documentation for financially informed SFPUC strategic decision-making.
FY 2026-27 through FY 2035-36 Financial Plan
The full Fiscal Year (FY) 2026-27 through FY 2035-36 Financial Plan forecasts, including assumptions, annual revenues and expenditures, rate increases, and financial metrics, are described in detail in the attached report.
Key takeaways are described below:
Expenses
Over the next 10-year period, costs are anticipated to go up for each of the SFPUC’s enterprises. For Water and Wastewater, capital investments are the primary driver for cost growth. Power supply costs are the main cost for CleanPowerSF, whereas both power supply and delivery and capital projects contribute to increased costs for Hetch Hetchy Power.
In Water and Wastewater, operating expenditure projections escalate across the 10-year planning horizon at projected inflationary rates, while Hetch Hetchy Agenda Title: Public Hearing to discuss and possible action to adopt the SFPUC 10-Year Financial Plan for FY 2026-27 through FY 2035-36
Commission Meeting Date: February 10, 2026
2 Power and CleanPowerSF’s operating expenditures are largely driven by anticipated growth in power supply costs and delivery charges. For all enterprises, salary and fringe benefit escalation in the near-term is projected to grow slightly above inflation, reflecting both approved City employee union memoranda of understanding (MOUs) and estimates from the San Francisco Mayor’s Budget Office.
Capital expenditures in the Financial Plan reflect the projected cash need for each enterprise. The cash need is comprised of the appropriations for all revenue-funded capital and debt service payments for all debt-funded projects.
To lower the costs for debt-funded projects, the SFPUC uses low-cost interim financing (such as commercial paper or revolving lines of credit) that is later retired by long term debt. Because of this, and because debt repayment is spread out over many years, there is a lag between when funds are appropriated for debt-funded capital and when those costs begin to impact the cash flow of each enterprise. Wastewater’s growing Capital Improvement Program and subsequent increases in revenue-funded capital, bond issuance, and annual debt service are the primary drivers of its high annual expense growth.
Revenues
As an Enterprise department of the City and County of San Francisco, the SFPUC receives no tax revenues and relies on utility rates as its primary source of revenue. In addition to rates, the SFPUC’s enterprises also generate a modest amount of income from miscellaneous sources, such as interest income earned on reserves, rental revenues, and non-rate penalties and fees. Utility sales comprise the majority of the revenues for each of the SFPUC’s enterprises.
Sales volumes are influenced by many external factors including weather, the economy, emergencies, conservation efforts and mandates, new uses for electricity, and long-term trends such as population growth and price elasticity.
Updates in the current Financial Plan reflect the best available information and are conservatively low so as not to “bank on growth”; the SFPUC will continually monitor actual sales and adjust future forecasts as needed.
In FY 2025-26, the SFPUC projects no additional recovery from the recent drought that ended in FY 2022-23 or the COVID-19 pandemic on water sales and wastewater billable volumes. Current-year baselines represent a “new normal” with modest ongoing adjustments to account for population and account growth, ongoing conservation, and reductions in consumption due to growing utility costs. In Hetch Hetchy Power, significant growth is forecasted due to new customer acquisition and electrification, though these projects primarily occur during the outer years of the plan. CleanPowerSF’s growth assumes minimal impact of electrification in the short-term, but a more moderate long-run trendline.
Proposed Financial Plan
The table below provides a summary of the projected rate adjustments necessary to pay for the proposed budgets and to comply with all financial policies. All rates shown below have yet to be adopted. In Spring 2026, the Agenda Title: Public Hearing to discuss and possible action to adopt the SFPUC 10-Year Financial Plan for FY 2026-27 through FY 2035-36
Commission Meeting Date: February 10, 2026
3 SFPUC anticipates adoption of two years of rates (FY 2026-27 and FY 2027- 28) for retail water and wastewater, and one year of rates (FY 2026-27) for wholesale water, Hetch Hetchy Power, and CleanPowerSF. Especially outside of this timeframe, forecasted rates may change before adoption.
Enterprise
FY 2026-27
Rate
Change
FY 2027-28
Rate
Change
10 Year Average
Rate Increase
Retail Water 7.0% 7.0% 6.4%
Wholesale Water 7.9% 6.9% 4.2%
Retail Sewer 15.0% 14.5% 10.1%
Hetch Hetchy Power1 7.0% 7.0% 5.8%
CleanPowerSF
Generation2 -20.0% 8.5% 2.1%
1 Hetch Hetchy Power rates shown are for retail, non-municipal customers. 2 CleanPowerSF rate increases refer to the generation portion of the bill. CleanPowerSF customers also pay PG&E delivery charges and fees. A 25% generation rate decrease represents an approximate 8.3% total bill decrease.
Power Rates
The SFPUC is forecasting power rate increases meaningfully lower than prior projections in the short-term. CleanPowerSF’s supply costs have decreased from prior projections, and the program’s fund balance reserve currently exceeds its policy targets. To pass these savings on to customers as quickly as possible and remain competitive with PG&E’s recent rate and fee changes, a 20-25% generation rate decrease (depending on customer class) is planned for March 1, 2026, with top-line rates expected to remain flat through the end of FY 2026-27. Moderate rate increases of 5.5-8.5% are anticipated in FY 2027- 28 and beyond to keep pace with supply cost increases.
In Hetch Hetchy Power, retail rates are expected to increase by 6.5-7.0% annually over the next several years, lower than prior projections of 5.0-9.5%.
Rate increases are largely driven by the cost of purchased wholesale power supply and transmission and distribution costs, as well as strategic capital investments that will expand the customer base and increase revenues, bringing down rate increases in the longer term. Despite increases, the 8,000 current Hetch Hetchy Power ratepayers will continue to pay the lowest electricity rates in San Francisco.
Water and Wastewater Rates
Consistent with last year’s 10-Year Financial Plan, the SFPUC forecasts significant short-term rate increases for customers’ combined retail water and wastewater bill. In the Wastewater Enterprise, these increases are mainly driven by capital spending and associated increases in debt service costs related to the replacement and modernization of the core functions of San Francisco’s Southeast Treatment Plant, which was built in 1952 and handles 80% of the City’s combined wastewater and stormwater flows. Current investments Agenda Title: Public Hearing to discuss and possible action to adopt the SFPUC 10-Year Financial Plan for FY 2026-27 through FY 2035-36
Commission Meeting Date: February 10, 2026
4 include construction of a new Headworks Facility, improvement of the Bruce Flynn Wet Weather Pump Station, and replacement of the Biosolids Digester Facilities – work that is largely completed. Planned investments in the 10-Year Capital Plan include projects necessary to meet regulatory requirements and to renew other aging infrastructure, such as the construction of Nutrient Reduction facilities and the replacement of the Southeast Outfall. Together, these projects at the Southeast Treatment Plant are estimated to cost over $7 billion.
Other major cost drivers for water and wastewater rates include projects such as the new wastewater treatment plant on Treasure Island, flooding mitigation projects in low-lying areas of the city, ongoing repair and replacement of sewer and water mains, and major pipeline and tunnel rehabilitation in the Hetch Hetchy Water system. In addition to replacement and renewal of aging infrastructure, many of these investments are driven by regulatory requirements. The SFPUC thoroughly evaluated opportunities to reduce these expenditures and/or extend them over longer periods of time to minimize the impact on ratepayers.
Maintaining the SFPUC’s strong financial position while simultaneously making the large capital investments needed to meet regulatory obligations, responsibly manage the SFPUC’s systems, and improve the SFPUC’s resilience to climate change necessitates raising utility rates. The SFPUC’s current forecasts indicate that, without further adjustments, the average combined water and wastewater bill could slightly exceed the SFPUC’s Affordability Policy targets beginning in FY 2033-34, coming back under the targets in FY 2044-45. This rate trajectory does, however, improve on the prior 10-Year Financial Plan. Rate increases in the next few years are slightly lower than previously projected; however, higher expenditure projections in this timeframe mean that rates beginning in FY 2030-31 – five years from now – are higher.
Despite this increase, the SFPUC’s extensive efforts to reduce the Capital Plan and defer all but the highest-priority projects mean that the projected combined bill in FY 2044-45 is now $482 vs. $505 in last year’s projection, an almost 5% improvement, and is under the SFPUC’s affordability target. The majority of the rate increases in the first two years of the Financial Plan, which are projected to be adopted in Spring 2026, are necessary to pay for debt service on bonds already issued for critical capital investment needs, limiting the ability for further short-term rate reductions. Affordability was a central value in the SFPUC’s budget development process, leading to significant reductions in the Capital Improvement Plan. The SFPUC remains committed to pursuing all additional opportunities to reduce costs and customer bills towards meeting the SFPUC’s affordability targets.
Planning for the Future
The SFPUC is committed to long-term financial sustainability through conservative planning, strong financial policies, and transparent forecasting to protect ratepayers and maintain high bond ratings. The SFPUC faces significant cost pressures driven primarily by its capital improvement program, which addresses aging infrastructure, climate change impacts, and increasingly Agenda Title: Public Hearing to discuss and possible action to adopt the SFPUC 10-Year Financial Plan for FY 2026-27 through FY 2035-36
Commission Meeting Date: February 10, 2026
5 complex regulatory requirements—particularly in wastewater. High local construction costs and limited federal funding contribute to rate growth.
Greater regulatory certainty has improved capital planning accuracy, while proactive investments in climate resilience, water supply reliability, and regulatory compliance are fully reflected in long-term plans.
To manage these pressures, the SFPUC applied stringent prioritization and affordability-focused decision-making. Capital plans were reduced from initial estimates by approximately $3.4 billion through project deferrals and tradeoffs while preserving reliability and compliance. Robust financial policies— including Debt Service Coverage, Capital Financing, Fund Balance Reserve, Affordability, and Ratepayer Assurance policies—guide responsible stewardship. The SFPUC exceeds policy minimums for debt service coverage, fund balance reserves, and balanced capital financing, strengthening financial resilience and balancing long-term debt reliance. Despite economic uncertainty and declining federal support, the SFPUC’s enterprises remain financially strong, have outperformed conservative projections, achieved refinancing savings for ratepayers, and continue to balance critical infrastructure investment with affordability goals.
Environmental
Review:
This action does not constitute a project under the California Environmental Quality Act (CEQA) Guidelines section 15378(b)(4) because it involves the creation of government funding mechanisms or other government fiscal activities, which do not involve any commitment to any specific project that may result in a potentially significant impact on the environment.
Approval of projects to be funded through this action would only occur after the necessary environmental review process is completed in conformance with the CEQA and any certification required by Proposition E (approved by the voters in 2002 for water and wastewater projects) and Proposition A (approved by the voters in 2018 for power projects).
On August 1, 2024, and June 25, 2025, the Environmental Review Officer issued Certificates of the City and County of San Francisco Planning Department, pursuant to Section 8B.124(b) of the City Charter under Proposition E (November 2002) and Proposition A (June 2018), certifying that the projects to be funded through the sale of Water, Wastewater, and Power Revenue Bonds and/or Other Forms of Indebtedness, including Commercial Paper, either already comply with the requirements of the CEQA or will undergo CEQA review when they are defined. These certificates can be found below.
Water:
https://sfpuc.sharefile.com/public/share/web-
s8413a722e7c742ea970696cc9415443c
Wastewater:
https://sfpuc.sharefile.com/share/view/sfc204c4faea54a3383fb09e998122617 Agenda Title: Public Hearing to discuss and possible action to adopt the SFPUC 10-Year Financial Plan for FY 2026-27 through FY 2035-36
Commission Meeting Date: February 10, 2026
6 Power:
https://sfgov.legistar.com/View.ashx?M=F&ID=13655933&GUID=E0C82847- 9CA9-4368-8C71-30AAB4A0962E%EF%BF%BC%EF%BF%BC
Attachments: 1. FY 2026-27 to FY 2035-36 SFPUC 10-Year Financial Plan Report
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, Under Charter Section 8B.123, the San Francisco Public Utilities Commission (SFPUC) must hold public hearings on an annual basis to review, update, and adopt a Long-Term Capital Improvement Program (10-Year Capital Plan, or Capital Plan) and a Long- Range Financial Plan (10-Year Financial Plan, or Financial Plan) for the SFPUC; and
WHEREAS, On February 10, 2026, at a duly noticed public meeting, staff presented the proposed 10-Year Financial Plan for the period Fiscal Year (FY) 2026-27 through FY 2035-36 for the SFPUC’s Water Enterprise, Wastewater Enterprise, Hetch Hetchy Water and Power, including the Power Enterprise, and CleanPowerSF; and
WHEREAS, As a best practice, governmental entities should maintain a multi-year financial plan to forecast future fiscal operations and revenue requirements for their customers and stakeholders; and
WHEREAS, Future year revenue requirement impacts should be considered when making budgetary decisions; and
WHEREAS, This action does not constitute a project under the California Environmental Quality Act (CEQA) Guidelines section 15378(b)(4) because it involves the creation of government funding mechanisms or other government fiscal activities, which do not involve any commitment to any specific project that may result in a potentially significant impact on the environment; and
WHEREAS, Approval of projects to be funded through this action would only occur after the necessary environmental review process is completed in conformance with the CEQA and any certification required by Proposition E (approved by the voters in 2002 for water and wastewater projects) and Proposition A (approved by the voters in 2018 for power projects); and
WHEREAS, On August 1, 2024, and June 25, 2025, the Environmental Review Officer issued Certificates of the City and County of San Francisco Planning Department, pursuant to Section 8B.124(b) of the City Charter under Proposition E (November 2002) and Proposition A (June 2018), certifying that the projects to be funded through the sale of Water, Wastewater, and Power Revenue Bonds and/or Other Forms of Indebtedness, including Commercial Paper, either already comply with the requirements of the CEQA or will undergo CEQA review when they are defined; and
WHEREAS, The 10-Year Financial Plan will also be used to meet the City requirement for a 5-Year Financial Plan; now, therefore, be it,
RESOLVED, That this Commission hereby adopts the attached 10-Year Financial Plan Report for the period FY 2026-27 through FY 2035-36.
I hereby certify that the foregoing resolution was adopted by the San Francisco Public Utilities Commission at its meeting of February 10, 2026.
Director of Commission Affairs
San Francisco Public Utilities Commission