THATCHER — On Monday, the Thatcher Town Council unanimously approved the town’s tentative budget for fiscal year 2023-24, but not before making a big addition.
Upon advice of staff, the council approved adding a $500,000 expenditure to start the process of replacing the electrical substation next to the town’s Public Works Yard.
“The transformers there are from 1960, so that is 63 years old, those transformers,” said Town Manager Heath Brown. “They usually expect about 40 years of life out of them.”
Brown said total cost to replace the substation is around $3 million; however, due to the lead time needed to secure the transformers, the town will be able to spread the cost over the next three fiscal years. He said the town plans to spend about $200,000 this year to start the process, with this year’s funds coming out of the Electric Fund’s contingency.
Supplying power to residents has been a challenge over the last year and a half. In addition to the expensive substation replacement, the town has seen significant cost increases to purchase power.
Currently, the Electric Fund is in a deficit by about $700,000 for the current fiscal year, which ends June 30.
The council agreed with Brown’s recommendation to start hedging power purchasing. That would allow the town to lock in a purchase price, regardless of actual cost at the time the power is delivered.
Brown explained that could mean paying slightly more than the going rate during low demand periods, but the move will protect the town if the power sector sees another major spike in natural gas costs, as happened the last two years when gas prices increased as much as 400 percent during peak periods.
