PUD Commission Approves 2026 Budget
Jefferson County PUD Commissioners approved a $89 million dollar budget for 2026 during their annual hearing on Monday, October 6th, marking the largest utility budget to date.
The balanced 2026 budget includes $52.5M in operating and $37.1M in capital expenditures for the district’s combined electric, water, wastewater, and broadband utilities. Though the total year-over-year increase of the PUD’s operations budget is only $1.1M, capital expenses are up 3.5% as the PUD continues to make large investments in repairing, upgrading and expanding infrastructure.
On the operations ledger, the PUD’s largest expense is purchased power from the Bonneville Power Administration (BPA), accounting for 33% of total operating costs. All of the PUD’s 95% carbon-free electricity is provided by the BPA, which is primarily generated by hydroelectric dams along the Columbia River. The cost of purchased power for the utility is anticipated to rise by $300,000 in 2026, which represents a 9% increase for power and 20% increase in the cost of transmission.
Labor and benefits account for the PUD’s second largest operating expense at $13.3M, which is up slightly from 2025.
“The 2026 budget reflects a 3.5% rise in operating expenses,” said PUD Finance Director Mike Bailey, “primarily due to the upswing in power costs coupled with inflationary pressures.”
Tree trimming and vegetation management along transmission and distribution corridors are a top priority for 2026. The PUD maintains an annual tree trimming expense budget of $1M.
“Based off my experience, an active tree trimming plan can really have a positive impact on reliability,” said Jefferson PUD General Manager, Joseph Wilson. “I’m recommending to our commissioners that our current 7-year trimming cycle move to a 4-year plan to help us serve our customers more reliable power.”
Electric capital expenditures include $11.2M for system improvements. Substation upgrades account for more than half of the annual expense due to aging infrastructure and growth needs in the region. $3.6M is planned for distribution line feeders, allowing for better peak load management during cold conditions and the ability to quickly transfer power from one substation to another to improve reliability
Wilson anticipates a blend of the additional rate revenue and strategic borrowing will be used to tackle the more than $70M in aging infrastructure upgrades and reliability improvements the PUD is planning through 2030.
“Jefferson PUD has many significant and competing infrastructure requirements,” said Wilson. “My goal is to utilize those public infrastructure investments to realize the best outcome for our customers.”
The Commission approved $5.2M in capital expenses for the PUD’s water utility. A complete water main replacement for the Coyle system ranks as the top capital expense, accounting for $2.6M of the $3.8M in total capital spending. The Coyle project was awarded a grant and low interest loan through the Public Works Board to address upwards of 60% water leak loss throughout the system.
The PUD’s broadband expansion accounts for the largest share of projected capital spending. In 2024 and 2025, the PUD built more than 200 miles of fiber optic cable between Quilcene and Gardiner. In October of 2025, construction began on the next 100 miles of fiber internet to the rural areas of northeastern Jefferson County between Discovery Bay and Marrowstone Island. 2026 will also see expansion of fiber to business in Port Townsend and the start of construction of an additional 100 miles of fiber from Chimacum to Coyle.
In total, the PUD is projecting over $15M in broadband capital spending in 2026. The PUD spent over $20M between 2024 and 2025. According to Broadband and Communications Director Will O’Donnell, the PUD expects to complete construction of over 600 miles of fiber by 2028, with total project funding topping $65M.
Commissioners requested PUD staff present quarterly financial analyses to provide a deeper understanding of how the approved budget is implemented across the utility. Across its service offerings, Jefferson PUD provides electricity to more than 21,000 homes and businesses in east Jefferson County, water service to 5,200 homes, wastewater service for 380 households, and more than 500 residential broadband connections to date.
Budget details are available at: jeffpud.org/finance