Aztec Workshop Weighs Electric, Water System Upgrades Totaling Millions

Aztec Electric Director John Wheeler put three utility systems under the microscope at a public workshop last week, presenting repair-and-replacement fund balances of $5.3 million for electric infrastructure, $1.9 million for water and $2.27 million for wastewater as the city faces a convergence of capital decisions.

The March 27 session, held ahead of the regular city commission meeting, centered on two pressure points: whether to extend, renegotiate or replace the city's power supply contract with Guzman Energy Group, and how to handle a water meter replacement program that drew sharp interest from residents and business owners who attended.

Guzman Energy has supplied Aztec's municipal power since 2015, when the city moved away from Public Service Company of New Mexico. That switch cut the power rate from roughly 8.2 cents per kilowatt-hour to approximately 4.25 cents, nearly half the prior cost, a figure locked in through the end of the current contract term. Wheeler acknowledged the favorable pricing while flagging that new obligations under the Southwest Power Pool's Renewal Adequacy requirements could force the city's hand regardless of supplier preference.

Wheeler cautioned that financial projections remain fluid, but the fund balances presented at the workshop gave commissioners a baseline for what modernization could cost. Mayor Mike Padilla noted that those reserves had been built up over roughly the past two years and called for careful stewardship as the city evaluates its options.

The water meter conversation emerged as one of the workshop's more animated discussions. Replacing aging meters could reduce nonrevenue water loss, improve billing accuracy and give utility staff sharper tools for diagnosing outages, but the capital cost would likely require some combination of fund reallocation, rate adjustments or outside financing.

Wheeler laid out three broad paths on the power side: hold the Guzman contract as written, renegotiate its terms, or pursue alternative suppliers to satisfy Southwest Power Pool compliance standards. No recommendation was finalized; city leaders said specific proposals would return to the commission after further review.

The decisions carry lasting consequences. Mandatory regional market compliance, aging distribution infrastructure and a water system overdue for updated metering are not separate problems arriving one at a time. They are arriving together, and what the commission decides in the months ahead will set the trajectory for utility rates and service reliability across Aztec for years.