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.
8 MEETING DATE
February 10, 2026
Calendar: Regular Calendar
Project Manager: Anna Duning
Adopt the FY 2026-27 and FY 2027-28 Biennial Operating Budgets
Summary of Proposed
Commission Action:
Public Hearing to consider and possible action to adopt the San Francisco Public Utilities Commission (SFPUC) Biennial Operating Budget including the Revenue Transfer for Capital in the amount of $2,166,698,799 for FY 2026-27 and $2,344,066,873 for FY 2027-28 in conformance with San Francisco Administrative Code Section 3.3(c).
Background: Budget Development
The San Francisco Public Utilities Commission (SFPUC) has engaged in a detailed budget process over many months. In July 2025, the General Manager issued budget development instructions including guidance on budgetary growth and position requests. The budget systems remained open for eight weeks for the Enterprises and Bureaus to submit their proposals for the FY 2026-27 and FY 2027-28 Operating Budgets between the months of July and September of 2025. The executive teams reviewed the proposals and provided feedback through a series of Budget Steering Committee meetings from September to November of 2025, and General Manager review and approval occurred during additional meetings in December 2025.
Under San Francisco Administrative Code Section 3.3, this Commission must hold two public budget meetings, the first regarding budget priorities and the second to adopt a proposed budget. The second meeting must occur at least 15 days after the first meeting and before February 14. Accordingly, on January 12, 2026, the SFPUC held a duly noticed public meeting to consider budget priorities, at which members of the public provided input.
Additionally, on January 23, January 29, and February 5, 2026 the SFPUC General Manager and staff presented in duly noticed public hearings the preliminary proposed FY 2026-27 and FY 2027-28 Operating Budgets to the Commission for the Water Enterprise, Wastewater Enterprise, Hetch Hetchy Water and Power including CleanPowerSF, as well as for the SFPUC Support Bureaus consisting of Business Services, External Affairs, Human Resource Services, Infrastructure, and the General Manager’s Office. Copies of this presented information are on file with the Director of Commission Affairs and are available online at: https://sfpuc.org/about-us/boards-commissions- committees/sfpuc-commission/agendas-minutes-resolutions-log.
With these four public budget hearings, SFPUC has more public hearings Agenda Title: Adopt the FY 2026-27 and FY 2027-28 Biennial SFPUC Operating Budgets Commission Meeting Date: February 10, 2026
associated with budget development and review than most City departments.
To comply with Charter Section 9.101 and the City’s Budget submittal schedule, the Commission-approved biennial budget request must be submitted to the Mayor and Controller by February 23, 2026, for incorporation into the Mayor’s proposed budget and consideration by the Board of Supervisors. The SFPUC is scheduled to present the proposed biennial budget to the Board of Supervisors in May 2026.
Proposed Operating Budget Review per SFPUC’s Ratepayer Assurance Policy
The SFPUC operations and maintenance budget is increasing by approximately $12.8 million (1%) in FY 2026-27 and $56.1 million (4%) in FY 2027-28, excluding debt service, revenue-funded capital costs, and general reserves. Over the two years, this represents an average annual increase of 2.6%. The city Controller has estimated inflation of 3.3%.
As required by the SFPUC Ratepayer Assurance Policy, to the extent that operating costs are determined by SFPUC management choices, the Commission shall limit operating cost increases, exclusive of debt services and revenue funded capital investment, to not more that the cost of inflation.
Any proposed budget that increases operating costs above this level will be supported by findings of necessity.
The largest driver of cost increases for the operations and maintenance budget are new proposals to operate new facilities, respond to new customer needs, address regulatory requirements, and maintain service levels across the agency. In FY 2026-27, the net increase is $41.7 million, with $21.2 million funding non-discretionary cost of living adjustments (COLAs) on citywide salaries and benefits. In FY 2027-28, $49.2 million of the increase funds new proposals across the agency, with $35.0 million of the increase funding non- discretionary COLAs on citywide salaries and benefits.
Purchase of power, including transmission and distribution costs make up the remainder of the overall two-year operations and maintenance change. Power purchase costs are projected to decrease by $22.0 million from FY 2025-26 to FY 2027-28. In FY 2026-27, the budget will decrease by $29.0 million and increase by $7.0 million in FY 2027-28. These costs are driven by energy market prices and demand.
Summary of Two-Year Operating Budget
The SFPUC proposed operating budget and revenue transfer for capital budget is $2,166,698,799 for FY 2026-27 and $2,344,066,873 for FY 2027- 28 representing annual increases of 2% and 8% respectively.
The budget includes sufficient operating and maintenance funds for the Enterprises and Bureaus including labor, contractual services, equipment, Agenda Title: Adopt the FY 2026-27 and FY 2027-28 Biennial SFPUC Operating Budgets Commission Meeting Date: February 10, 2026
debt service, and services of other departments.
As described in the budget hearings and above, the increases are mainly due to:
- Increases to revenue funding and debt service to fund the capital plans of each Enterprise;
- City-wide COLA increases to salaries and benefits; and, - Responsible effective management of our facilities and equipment, meeting regulatory requirements, and preparing new facilities due to be activated.
Projects that have a technology aspect to them require review and approval by the City’s Committee on Information Technology (COIT). The SFPUC will not be submitting any applications to COIT for review for the FY 2026- 27 and FY 2027-28 operating budget proposal.
Capital Revenue Transfers support enterprise pay-go or revenue funded capital of $246.6 million for FY 2026-27 and $292.3 million for FY 2027-28.
Operating FY 2026-27 FY 2027-28
Water Enterprise $734,487,103 $783,680,638
Wastewater Enterprise 589,987,818 654,568,740
Hetch Hetchy Power 294,299,998 348,834,840
Hetch Hetchy Water 148,059,639 158,581,710
CleanPowerSF 399,864,241 398,400,945
Subtotal $2,166,698,799 $2,344,066,873
External Affairs $14,236,981 $15,134,221
General Manager 43,602,037 47,061,770
Business Services 106,123,801 111,982,429
Bureau Recoveries (163,962,819) (174,178,420)
Infrastructure 115,496,942 122,301,823
Project Recoveries,
Infrastructure (115,496,942) (122,301,823)
Total SFPUC $2,166,698,799 $2,344,066,873
Capital Revenue Transfer FY 2026-27 FY 2027-28
Water Enterprise $65,705,483 $71,606,345
Wastewater Enterprise 81,739,215 91,215,291
Hetch Hetchy Power 66,523,586 93,295,007
Hetch Hetchy Water 32,522,250 36,019,141
CleanPowerSF 72,928 140,712
Subtotal $246,563,462 $292,276,496
Budget & Costs:
Total Change Operating Budget*:
FY 2026-27: $2,166,698,799
FY 2027-28: $2,344,066,873
Agenda Title: Adopt the FY 2026-27 and FY 2027-28 Biennial SFPUC Operating Budgets Commission Meeting Date: February 10, 2026
Total Change to Capital Revenue Transfer:
FY 2026-27: $246,563,462
FY 2027-28: $292,276,496
* Includes Capital Revenue Transfer
Recommendation: SFPUC staff recommends that the Commission adopt the attached resolution.
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.
Attachments: 1. Appendix A: FY 2026-27 and FY 2027-28 SFPUC Operating Budget New Proposal Details
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, The San Francisco Public Utilities Commission (SFPUC) has engaged in a months-long detailed process to develop a new two-year (biennial) operating budget; and
WHEREAS, On January 12, 2026, this Commission heard and considered budget priorities for the department in conformance with San Francisco Administrative Code Section
3.3(b). Additionally, on January 23, January 29, and February 5, 2026, the General Manager and staff presented proposed Biennial FY 2026-27 and FY 2027-28 Operating Budgets for the Water Enterprise, Wastewater Enterprise, Hetch Hetchy Water and Power including the Power Enterprise and CleanPowerSF, as well as the SFPUC Support Bureaus (the Biennial Operating Budgets); and
WHEREAS, The detailed operating budgets for each Enterprise and Bureau presented to the Commission at the public hearings on January 12, January 23, January 29, and February 5, 2026, are on file with the Director of Commission Affairs and incorporated here by reference, and the summaries of the budgets presented on February 10, 2026, are attached to this Resolution; 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 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
WHEREAS, The SFPUC proposed Biennial Operating Budgets must be submitted to and approved by the Mayor and the Board of Supervisors, as provided under Charter Section 9.101; now, therefore, be it,
RESOLVED, This Commission hereby approves the FY 2026-27 and FY 2027-28 Biennial Operating Budgets, including the revenue transfer for capital, as set forth as follows:
Operating FY 2026-27 FY 2027-28
Water Enterprise $734,487,103 $783,680,638
Wastewater Enterprise 589,987,818 654,568,740
Hetch Hetchy Power 294,299,998 348,834,840
Hetch Hetchy Water 148,059,639 158,581,710
CleanPowerSF 399,864,241 398,400,945
Subtotal $2,166,698,799 $2,344,066,873
External Affairs $14,236,981 $15,134,221
General Manager 43,602,037 47,061,770
Business Services 106,123,801 111,982,429
Bureau Recoveries (163,962,819) (174,178,420)
Infrastructure 115,496,942 122,301,823
Project Recoveries,
Infrastructure (115,496,942) (122,301,823)
Total SFPUC
$2,166,698,799 $2,344,066,873
Capital Revenue Transfer FY 2026-27 FY 2027-28
Water Enterprise $65,705,483 $71,606,345
Wastewater Enterprise 81,739,215 91,215,291
Hetch Hetchy Power 66,523,586 93,295,007
Hetch Hetchy Water 32,522,250 36,019,141
CleanPowerSF 72,928 140,712
Subtotal $246,563,462 $292,276,496
and, be it,
FURTHER RESOLVED, That this Commission authorizes the General Manager to submit the above referenced proposed Biennial Operating Budgets to the Mayor and the Board of Supervisors for approval; and, be it,
FURTHER RESOLVED, That the General Manager is authorized to make further technical adjustments to these approved amounts as may be necessary or upon further direction from the Commission, the Mayor or the Board of Supervisors; and, be it,
FURTHER RESOLVED, That the General Manager is authorized to adjust salaries in conformance with amendments to the Annual Salary Ordinance and mandatory fringe benefits as provided in the Controller's instructions; and, be it,
FURTHER RESOLVED, That the SFPUC proposed Biennial Operating Budgets shall be filed with the Controller in conformance with the provisions of the San Francisco Charter Article IX and Administrative Code Chapter 3. Copies of the approved budget are on file in the office of the Director of Commission Affairs.
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