Owensboro Municipal Utilities has approved a $133 million budget and business plan for the 2025-26 fiscal year, maintaining its financial course with no changes since the initial proposal was presented on May 1.
Officials said the new budget includes $113 million in operating revenue — nearly $95 million from the electric system and $18 million from the water system — as well as more than $20 million in capital funding across both systems. The approved plan also reflects a planned cash decrease in the electric general fund, which OMU Manager of Production Cost Kathy Roberts said aligns with the utility’s long-term financial projections.
“That was in our plan, that we would be bringing that cash down,” Roberts said. “It was expected.”
The electric fund is projected to see a net decrease of $4.7 million in cash, while the water fund is expected to increase by $549,000. The budget includes $9.3 million in capital funding for the electric system and $3.1 million for the water system, not including additional projects funded through grants.
Driving the electric fund’s decline is a combination of increased purchased power costs — passed through to customers via the Energy Cost Adjustment (ECA) — and interfund transfers, Roberts said. However, those pressures are offset in part by increased telecom revenue from OMUfiber sales and the ECA balance adjustment of $4.6 million.
The water fund, Roberts said, is benefiting from a two-phase rate adjustment that was previously approved to help improve cash flow and future bond ratings.
“This will help us get a better rate if we need to issue bonds in the future,” she said.
OMU General Manager Tim Lyons said that looking ahead, OMU plans to secure long-term power contracts in FY26, begin a cost-of-service study for the electric system, and continue work on infrastructure to support electric, water, and internet services. Lyons said OMU — like utilities across the country — is anticipating continued economic pressure from inflation and tariffs.
Despite those challenges, he highlighted a successful year of project completions, including:
- Achieving a 97% customer satisfaction rating
- Fully deploying fiber-to-the-home internet access across the electric service area
- Installing pumps and water lines to improve service in the Hillcrest area
- Completing a 4kV-to-15kV electric system conversion for enhanced reliability and safety
“We’re very grateful to have received local, state, and federal funding that made several of these projects possible,” Lyons said. “That support helps reduce the expenditures passed on to our customer-owners.”
The board unanimously approved the budget and business plan following the presentation.
