FY 25-26 2nd Quarter Budget
Report
Anna Duning, Budget Director
March 10, 2026
FY 2025-26 Q2 Summary
Positive operating results projected for Power, CleanPowerSF , and Water with modest shortfall in Wastewater.
All enterprises meeting financial policy targets.
• Water: Retail and wholesale revenues are down from budget due to lower volumes. Largely offset by debt service and some personnel savings.
• Wastewater: Revenues projected below budget due to lower volumes. Partially offset by some cost savings in debt service and personnel.
• Power: Revenues projected slightly below budget due to due to less demand. More than offset by savings in power purchasing due to less demand as well as lower energy prices. • CleanPowerSF: Revenues projected to be below budget due to scheduled rate decrease effective March 1st and lower demand. This is offset by slightly higher wholesale sales revenues and significant savings from power purchase costs.
FY 2025-26 Water Budget Variances
Net Operating Result: $1.3M
Overall revenues down ($33.4) and cost savings of $34.7M leading to positive operating results $1.3M.
Total net impact on fund balance is ($1.7M) after legal settlements $3.0M.
Sources
• ($1.1M) or -0.3% retail water sales
• ($21.7M) or -5.8% wholesale water sales
• ($8.9M) or -44.8% in federal bond interest subsidy, offset with debt savings below • ($1.8M) or -5.3% other sources, including installation charges and revenue transferred to Wastewater for Customer Assistance Program funding Uses
• $29.5 or 8.0% debt service due to 2025 bond refunding • $3.4M or 2.7% personnel
• $1.1M or 1.4% bureau overhead
• $0.8M or 100% general reserve
FY 2025-26 Wastewater Budget
Variances
Net Operating Result: ($1.6M)
Overall revenues down ($6.9M) and cost savings of $5.3M leading to negative operating results ($1.6M).
Sources
• ($7.6M) or -1.6% sewer service charges, in line with prior year trends • $0.7M or 1.1% other sources
Uses
• $2.2M or 1.5% debt service
• $1.5M or 1.5% personnel
• $0.8M or 1.4% bureau overhead
• $0.9M or 100% general reserve
FY 2025-26 Power Budget
Variances
Net Operating Result: $56.5M
Overall revenues down ($8.1M) and cost savings of $64.6M leading to positive operating results $56.5M.
Sources
• ($9.4M) or -4.0% retail sales
• ($0.5M) or -2.2% gas & steam sales
• $0.7M or 2.4% wholesale sales
• $1.1M or 0.9% other sources, including interest earnings Uses
• $56.0M or 34.7% purchase of power
• $6.1M or 21.4% gas & steam
• $1.2M or 1.9% personnel
• $0.5M or 1.4% bureau overhead
• $0.8M or 100% general reserve
FY 2025-26 CleanPowerSF
Budget Variances
Net Operating Result: $38.0M
Overall revenues down ($32.2M) due to rate decrease scheduled to take effect in March and cost savings of $70.2M leading to positive operating results $38.0M.
Sources
• ($32.2M) or -6.0% power sales
Uses
• $29.3M or 8.1% purchase of power
• $40.3M or 100% general reserve
• $0.5M or 5.1% personnel
• $0.1M or 1.4% bureau overhead
Key Financial Policy Targets
Fund Balance Reserve
Water Wastewater Hetchy
Power
Clean
Power
SF
25%-68% of Annual Operating Uses 50.6% 54.9% 106.1% 66.6%* Debt Service Coverage Reserve
Indenture Basis ≥ 1.35x 1.83 2.73 18.09
Current Basis ≥ 1.10x 1.25 1.82 8.08
*CleanPowerSF’s Fund Balance Reserve Policy: build fund balance reserve to min of 41% (150 days) & target of 49% (180 days) of operating expenditures between FY 21-22 and FY 24-25 Questions?