PORT TOWNSEND — The Jefferson County PUD passed its 2026 budget with projected expenditures of $89 million.
The utility continues to offer and expand on its core services of electric and water while building out its newer broadband service.
“The electric side is by and large the largest generator,” said Jameson Hawn, the PUD’s digital communications specialist. “It’s the one bringing in the most revenue. We have to be strong financially on the electric side, because the water side isn’t always in the black.”
The total projected loss for water services in 2026 is $404,000, said Mike Bailey, the PUD’s finance director, at an Oct. 6 budget hearing held by the PUD commissioners.
“The electric business is subsidizing the water business, and has been for years and years and years,” Commissioner Kenneth Collins said.
More than $51.46 million is expected in revenue from the electric utility’s operations, according to the approved budget.
The broadband utility is expected to generate more than $2 million in operating revenue. The water utility is expected to generate almost $4.6 million, $452,632 less than in 2025.
The remainder between the projected operational revenue of more than $58 million and the PUDs total expenditures of $89 million are planned to be covered by a combination of grants, loans, construction-related reimbursements, taxes and other non-operating funds, Hawn wrote in an email.
The PUD plans to spend $52.5 million on operations and $37.1 million on capital projects for all three of its utilities.
“The 2026 budget reflects a 3.5 percent rise in operating expenses, primarily due to the upswing in power costs coupled with inflationary pressures,” Bailey said.
The PUD’s electric utility is projected to spend more than $44.2 million on operations.
The biggest operations expense for electric is purchased power from the Bonneville Power Administration (BPA), which would account for 33 percent of overall operational spending. Purchased power is expected to cost more than $17.31 million.
The second largest expenditure in operations is labor and benefits, which accounts for 25 percent of operations spending.
Labor and benefits expenses are projected at more than $13.32 million.
Of the money spent on labor and benefits, more than $2.5 million is budgeted for the executive department, more than $2.27 million is budgeted for electrical line crew, more than $1.37 million is budgeted for electrical operations and more than $1 million would go to customer service.
The third largest expense is depreciation, which is expected to cost almost $7.75 million, or 15 percent of operations expenses.
The remaining 27 percent includes more than $3.23 million for the state business and occupation tax (B&O) and a state privilege tax, nearly $2.93 million for administrative and general expenses, $2.73 million for interest on long-term debt and $1.9 million for professional and consulting services.
Of the $37.1 million to be spent on capital projects, more than $15.17 million would be spent on broadband, accounting for 40.8 percent capital spending. The budgeted amount matches the amount budgeted in 2025.
“Broadband is our largest slice of the pie for funding this year, but the vast majority of that stems from grants,” Hawn said.
Broadband’s biggest expense is for mainline fiber, budgeted for more than $9.65 million. Engineering is budgeted for almost $1.7 million. The PUD plans to spend more than $1.5 million on the line that runs from the mainline into individual homes.
As a part of its approved $70 million, four-year work plan, electric’s 2026 work plan is expected to cost $11.27 million. The number makes up more than 30 percent of the capital budget. The number also reflects a reduction of more than $1.45 million from the utility’s 2025 budget.
Electric’s highest expense is new feeder lines, which are budgeted for $3.45 million. Expanding substation infrastructure and upgrading existing substation infrastructure are each budgeted for $3 million.
“We have a lot of growth,” Hawn said. “We have to be very tactical about where we place new feeders and substations.”
Long-term debt principal payments are budgeted at more than $4.8 million, nearly 13 percent of capital spending.
The PUD’s water work plan would spend more than $3.8 million. Broadband’s fleet is budgeted for $500,000. Contracted engineering is projected to cost $405,000. Electric would spend $190,000 on its fleet and water $115,000 on its fleet.
To view a detailed budget breakdown, visit jeffpud.org/finances.
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Reporter Elijah Sussman can be reached by email at elijah.sussman@peninsuladailynews.com.
