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. 9
MEETING DATE February 10, 2026
Calendar: Regular Calendar
Manager: Anna Duning
Adopt the Two-Year SFPUC Capital Budget (San Francisco Administrative Code Section
3.3(c)) and Authorize Associated Bond Financing for FY 2026-27 and FY 2027-28
Summary of Proposed
Commission Action:
Public Hearing to consider and possible action to adopt Two-Year Capital Budget of the San Francisco Public Utilities Commission consisting of $1,163,787,041 for FY 2026-27 and $1,316,552,550 for FY 2027-28 in conformance with San Francisco Administrative Code Section 3.3(c)); and authorize the General Manager to seek Board of Supervisors approval for the issuance of (1) $551,871,916 aggregate principal amount of Water Revenue Bonds and other forms of indebtedness, including commercial paper and State Revolving Fund (SRF) loans, (2) $1,165,736,266 aggregate principal amount of Wastewater Revenue Bonds and other forms of indebtedness, including commercial paper and SRF loans, and (3) $138,164,938 aggregate principal amount of Power Revenue Bonds and other forms of indebtedness, including commercial paper and loans, subject to the terms of Charter Sections 9.107(6) and 9.107(8).
Background: Under San Francisco Administrative Code Section 3.3, the San Francisco Public Utilities Commission (SFPUC) must hold two 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, 2026.
The SFPUC engages in a detailed budget process over several months. On September 9, 2025, the Commission held a duly noticed public meeting to consider FY 2024-25 budget priorities at which members of the public provided input. On January 12, 2026, this Commission again heard and considered the department’s budget priorities. On January 23, 29, and February 5, 2026, the General Manager and staff presented in a duly noticed public hearing the preliminary proposed FY 2026-27 and FY 2027-28 Capital Budget to the Commission for the Water Enterprise, Wastewater Enterprise, and Hetch Hetchy Water and Power including the Power Enterprise and CleanPowerSF. Copies of the Capital Budget materials from those hearings are on file with the Director of Commission Affairs and available online at https://sfpuc.org/about-us/boards-commissions- committees/sfpuc-commission/agendas-minutes-resolutions-log
Agenda Title: Adopt the 2-Year Capital Budget and Authorize Associated Bond Financing Commission Meeting Date: February 10, 2026
2-Year Capital Budget Development
The development of the attached FY 2026-27 & FY 2027-28 Capital Budget occurred from January through December 2025 and was directed by the Budget Steering Committee, comprised of the SFPUC Executive Team supported by the Capital Planning Improvement Initiative. In July 2025, budget instructions were issued describing how to proceed with capital planning development. The main 2-Year capital budgeting goal was to develop a balanced budget that is deliverable, incorporating current projects needs and ratepayer affordability. The FY 2026-27 and FY 2027-28 Capital Budget is consistent with the first two years of the 10-Year Capital Plan that the Commission is also considering on February 10, 2026.
Baseline Review
As a preliminary step to the capital budget development, a baseline review of all existing project appropriations was completed for potential closeout or repurposing to new capital budget needs. Additionally, Finance staff conducted an evaluation of each enterprise's utilization of budgeted funds and the change in total unspent appropriation balances. Enterprises were allowed to request additional appropriation only if unspent appropriated balances had fallen below certain strategic thresholds.
Capital Plan Quality Review
The SFPUC Infrastructure Bureau reviewed and validated the Capital Plan project submissions for a consistent and comprehensive capital planning approach across the agency comprised of individual project datasheets describing the project budget, schedule, and scope. The capital budget requests went through a separate project quality review process involving (1) validation of costs and schedule of all proposed projects, (2) assessment of the ability to deliver projects as scheduled including looking at historic versus planned spending and available resources, and (3) the assessment by each Enterprise of its ability to onboard new assets as planned. This capital planning effort helps assure the budget requests meet each Enterprise’s long- range capital needs, reflects a sound project prioritization process, and supports affordability by promoting efficient use of ratepayer funds.
Budgetary Control
Attached is an overview of the FY 2026-27 and FY 2027-28 Capital Budget for each enterprise. The budget summary includes an “Authority,” column which contains a 5-digit code (the Authority Code). If this budget is adopted by the Commission, the General Manager would have authority to re- allocate project appropriations within the same Authority Code, subject to the procedures set forth in the Infrastructure Division’s Procedures Manual on Project Change Management. This procedure establishes a formal process for all SFPUC capital projects or programs to identify, track, and approve or deny Change Authorization Requests to project scope, schedule and/or budgets. However, the reallocation of project appropriations from one Authority Code to a different one would require both Commission and Board of Supervisors approval.
Agenda Title: Adopt the 2-Year Capital Budget and Authorize Associated Bond Financing Commission Meeting Date: February 10, 2026
FY 2026-27 and FY 2027-28 Capital Budget Approval
This Resolution approves the proposed SFPUC Capital Budget of $1,163,787,041 for FY 2026-27 and $1,316,552,550 for FY 2027-28 presented at the budget hearings on January 12, 2026, and as shown on Attachment A.
The Resolution would also authorize the General Manager to submit associated bond authorization ordinances to the Mayor and Board of Supervisors. The associated Two-Year capital budget and bond authorization ordinances will also be presented to the City’s Capital Planning Committee at a future date and the Board of Supervisors in June 2026.
Budget & Financing
Costs:
The SFPUC FY 2026-27 and FY2027-28 capital budget and associated financing costs are as follows:
FY 2026-27
Capital Budget
Amount Financing
Costs
Total
Wastewater 527,567,324 65,731,701 593,299,025
Water 311,187,010 35,723,054 346,910,064
Hetchy Water 160,684,133 10,024,599 170,708,732
Hetchy Power 51,426,203 1,370,089 52,796,292
CleanPowerSF 72,928 0 72,928
Total $1,050,937,598 $112,849,443 $1,163,787,041
FY 2027-28
Capital Budget
Amount Financing
Costs
Total
Wastewater 670,517,999 86,320,856 756,838,855
Water 266,102,460 29,214,911 295,317,371
Hetchy Water 207,717,517 9,302,064 217,019,581
Hetchy Power 42,865,942 4,370,089 47,236,031
CleanPowerSF 140,712 0 140,712
Total $1,187,344,630 $129,207,920 $1,316,552,550
Bond Authorization: The SFPUC FY 2026-27 and FY2027-28 bond authorizations are as follows:
Enterprise 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 Water - Hetchy 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
Total $865,179,060 $990,594,060 $1,855,773,120
Agenda Title: Adopt the 2-Year Capital Budget and Authorize Associated Bond Financing Commission Meeting Date: February 10, 2026
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/sfc204c4faea54a3383fb09e9981226 17 Power:
https://sfgov.legistar.com/View.ashx?M=F&ID=13655933&GUID=E0C82 847-9CA9-4368-8C71-30AAB4A0962E%EF%BF%BC%EF%BF%BC
Recommendation: SFPUC staff recommends that the Commission adopt the attached resolution.
Attachments: 1. Attachment A: Two-Year SFPUC Capital Budget
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, On September 9, 2025 and January 12, 23, 29 and February 5, 2026, this Commission heard and considered budget priorities for the department and the San Francisco Public Utilities Commission (SFPUC). The General Manager and staff presented the preliminary proposed FY 2024-25 and FY 2025-26 Capital Budget for the Water Enterprise, Wastewater Enterprise, and Hetch Hetchy Water & Power, including the Power Enterprise and CleanPowerSF (Capital Budget) including the list of projects, cost estimates, and schedules to the Commission; and
WHEREAS, An overview of the proposed FY 2026-27 and FY 2027-28 Capital Budget for each SFPUC Enterprise is set forth as Attachment A and is on file with the Director of Commission Affairs; and
WHEREAS, As a preliminary step to development of the FY 2026-27 and FY 2027-28 Capital Budget, a baseline review of all existing project appropriations was completed for potential closeout or repurposing to new capital budget needs; and
WHEREAS, The FY 2026-27 and FY 2027-28 Capital Budget submittals went through a quality review to assure the budget addresses the immediate capital improvement needs of each Enterprise and reflects a sound project prioritization process which included a validation of costs and schedule of all proposed projects and an assessment of the ability to deliver the projects within the two-year time frame; and
WHEREAS, The proposed FY 2026-27 and FY 2027-28 Capital Budget must be submitted to, and approved by the Mayor and the Board of Supervisors; 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, This Commission has considered the proposed FY 2026-27 and FY 2027-28 Capital Budget for the Water Enterprise, Wastewater Enterprise, and Hetch Hetchy Water and Power, including the Power Enterprise and CleanPowerSF, which totals $1,163,787,041 for FY 2026-27 and $1,316,552,550 for FY 2027-28, as set forth in Attachment A to the February 10, 2026, staff report; now, therefore, be it,
RESOLVED, That this Commission hereby adopts the FY 2026-27 and FY 2027-28 SFPUC Capital Budget in the amount of $1,163,787,041 for FY 2026-27 and $1,316,552,550 for FY 2027-28 and for the Water Enterprise, the Wastewater Enterprise, and Hetch Hetchy Water and Power, including the Power Enterprise and CleanPowerSF as presented at the public hearings on January 12, 23, 29 and February 5, 2026 and as set forth in the attached Attachment A, as follows:
FY 2026-27
Capital Budget
Amount Financing
Costs
Total
Wastewater 527,567,324 65,731,701 593,299,025
Water 311,187,010 35,723,054 346,910,064
Hetchy Water 160,684,133 10,024,599 170,708,732
Hetchy Power 51,426,203 1,370,089 52,796,292
CleanPowerSF 72,928 0 72,928
Total $1,050,937,598 $112,849,443 $1,163,787,041
FY 2027-28
Capital Budget
Amount Financing
Costs
Total
Wastewater 670,517,999 86,320,856 756,838,855
Water 266,102,460 29,214,911 295,317,371
Hetchy Water 207,717,517 9,302,064 217,019,581
Hetchy Power 42,865,942 4,370,089 47,236,031
CleanPowerSF 140,712 0 140,712
Total $1,187,344,630 $129,207,920 $1,316,552,550
And, be it;
FURTHER RESOLVED, That the General Manager is authorized to reallocate funds within an Authority Code as provided in the staff report and Attachment A appended to this Resolution and to make further technical adjustments to these approved amounts as may be necessary or appropriate, or upon further direction from the Commission, the Mayor, or the Board of Supervisors; and, be it,
FURTHER RESOLVED, The General Manager is hereby authorized and directed to submit to the Board of Supervisors proposed ordinances authorizing the issuance of (1) $551,871,916 aggregate principal amount of Water Revenue Bonds and other forms of indebtedness, including commercial paper and State Revolving Fund (SRF) loans,
(2) $1,165,736,266 aggregate principal amount of Wastewater Revenue Bonds and other forms of indebtedness, including commercial paper and SRF loans, and (3) $138,164,938 aggregate principal amount of Power Revenue Bonds and other forms of indebtedness, including commercial paper and loans, subject to the terms of Charter Sections 9.107(6) and 9.107(8).The General Manager shall return to this Commission for a subsequent discretionary approval of any disclosure and transaction related documents prepared in connection with the issuance of such bonds and other forms of indebtedness.
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
Attachment A
Two Year SFPUC Capital Budget FY 2026-27 and FY 2027-28
Attachment A Wastewater Enterprise
Funding Source
Authority Description of Appropriation or Fund FY 2026-27 FY 2027-28 19471 Proceeds Sale of Bonds 503,943,037 661,793,229
19141 Wastewater Revenue 85,637,215 91,215,291
19141 Wastewater Capacity Fee 3,718,772 3,830,335
TOTAL - Funding Source 593,299,025 756,838,855
Use of Funds
Authority Description of Appropriation or Fund FY 2026-27 FY 2027-28 SSIP
19142 Program Management 13,750,000 13,750,000
19142 Biosolids/Digester Project 36,889,474 53,313,321 19142 Treatment Plant Improvements - Southeast 169,238,479 108,524,506 19142 Treatment Plant Improvements - Other 59,169,876 106,118,781 19142 Collection System Improvements 4,553,064 11,530,124 19142
Stormwater Management/Green
Infrastructure 3,907,957 25,593,111
19142 Flood Resilience/Hydraulic Improvements 91,159,812 196,184,812 TOTAL - SSIP 378,668,662 515,014,655
Non-SSIP
19141 Renewal & Replacement-Collection System 131,520,005 135,054,132 19141 Renewal & Replacement-Treatment Facilities 15,790,000 16,972,050 19139 Wastewater Facilities and Infrastructure 1,588,657 3,477,162 TOTAL - Non SSIP 148,898,662 155,503,344
19471 Financing Cost 65,731,701 86,320,856
TOTAL - Use of Funds 593,299,025 756,838,855
Attachment A Water Enterprise
Funding Source
Authority Description of Appropriation or Fund FY 2024-25 FY 2025-26 17731 Proceeds Sale of Bonds 273,876,750 223,980,983 19133 Water Enterprise Revenue 71,564,427 69,808,744
19063 Water Capacity Fee 1,468,887 1,527,643
TOTAL - Funding Source 346,910,064 295,317,370
Use Of Funds
Authority Description of Appropriation or Fund FY 2024-25 FY 2025-26 80526 Reg Water Facilities and Infra 203,597,839 122,663,166 80527 Watersheds & Right of Way 8,870,044 9,694,978
80528 Reg Alternative Water Supplies 6,240,441 7,449,609 Total Regional Water 218,708,324 139,807,753
Local Water
80529 Loc Water Facilities and Infra 227,398,679 319,859,530 80530 Local Water Resources (WRD) 9,946,634 17,515,087 TOTAL - Local Water 237,345,313 337,374,617
17731 Financing Costs 61,964,962 64,895,259
TOTAL - Use of Funds 518,018,599 542,077,629
Attachment A Hetch Hetchy
Funding Source FY 2026-27 FY 2027-28
Authority Description of Appropriation or Fund
15366 Proceeds Sale Power Bonds 40,219,718 97,945,219
15366 Proceeds Sale Water Bonds 47,139,555 6,874,629
15405 Hetch Hetchy Revenue Funds (Power/Water) 128,166,131 156,302,733 15404 Cap and Trade Revenue 5,788,233 897,818
21284 Low Carbon Fuel Standard $2,191,387 $2,235,214
TOTAL - Funding Source 223,505,024 264,255,613
Use of Funds
Authority Description of Appropriation or Fund FY 2026-27 FY 2027-28 15363 Water Infrastructure Projects 58,120,523 12,024,110 15364 Power Infrastructure Projects 47,839,224 109,743,958 15365 Joint Water/Power Projects 54,724,386 85,949,449 TOTAL - Water 160,684,133 207,717,517
80427 Distribution Services Retail 22,710,902 16,723,900 80427 Systems 202,376 379,025
80427 Grid Connections 6,133,925 15,133,925
15377 Streetlights 4,424,000 625,092
15400 Small Renewables 1,000,000 1,000,000
15404 Energy Efficiency - General Fund 6,000,000 1,000,000 15383 Power Asset Acquisition 10,955,000 8,004,000
TOTAL - Power 51,426,203 42,865,942
15366 Financing Cost Power 5,246,050 12,775,463
15366 Financing Cost Water 6,148,638 896,691
Total Financing Costs 11,394,688 13,672,154
TOTAL - Use of Funds 223,505,024 264,255,613
Attachment A CleanPowerSF
Funding Source
Authority Description of Appropriation or Fund FY 2026-27 FY 2027-28
80233 ITI from CleanPower Funds 72,928 140,712
TOTAL-Source of Fund 72,928 140,712
Use of Funds
Authority Description of Appropriation or Fund FY 2026-27 FY 2027-28
80233
ITS Capital Projects & Workforce
Management System 72,928 140,712
Total-Uses of Fund 72,928 140,712