Public utilities face a complex balancing act: upgrading aging infrastructure, complying with evolving regulations and maintaining reliable service—all while staying financially sustainable.
In this Q&A, we sit down with Angie Sanchez Virnoche, a seasoned consultant bringing over 30 years of experience in municipal utility financial planning, to explore why a dynamic financial plan is essential for public utilities. From tackling funding shortfalls to managing risk and navigating regulatory pressures, Angie shares valuable perspectives on how utilities can build strategic, adaptable roadmaps to secure long-term success.
Q: What are the biggest financial challenges facing public utilities?
A: The most pressing challenge is balancing necessary infrastructure upgrades with financial sustainability. Many utility assets have been underfunded for years, leading to a backlog of aging infrastructure. The key question becomes: How do you replace and upgrade systems with limited funding without placing an unbearable financial burden on users? This is where we step in, crafting strategic financial plans that prioritize urgent projects while spreading costs over time to ease the impact on ratepayers.
Q: What goes into creating a financial plan?
A: We start with a foundational financial framework tailored to a jurisdiction’s unique needs. We assess their current financial health, outline their long-term goals and build a roadmap to bridge the gap sustainably. This process involves detailed analysis of historical financial data, future capital improvement needs and regulatory requirements. We also model multiple scenarios to account for potential shifts in costs, funding availability and establish appropriate reserve policies to limit the risk of unexpected emergencies. The end result is a dynamic, adaptable financial strategy that helps utilities make informed decisions, maintain service reliability and plan for growth without compromising fiscal responsibility.
Q: Are there regulatory trends impacting public utilities, and how do we address them?
A: Absolutely. Increasing regulations, such as perfluoroalkyl and polyfluoroalkyl substances (PFAS) limits or stricter wastewater treatment standards, are shaping utility operations. These regulations often don’t come with funding, leaving local jurisdictions to figure out how to comply on their own. We incorporate regulatory requirements into the financial plan, helping utilities sequence capital projects to meet deadlines and avoid costly penalties, all while balancing their budgets.
Q: How do financial plans benefit risk management?
A: Deferring critical capital projects increases the risk of service disruptions, emergency repairs and public health crises. Our financial plans identify the most urgent infrastructure needs, helping utilities prioritize funding for high-risk assets. We also recommend establishing reserves, so utilities have funds ready for unforeseen emergencies, reducing the chance of reactionary spending and potential long-term cost spikes.
Q: What advice would you give to public utilities looking to optimize their financial strategy?
A: Start somewhere. Many utilities delay financial planning because they fear uncovering difficult truths—like the extent of their funding shortfalls. But much like a dental checkup, it’s better to face those issues head-on. Understanding your current financial position is the first step toward bridging the gap between today’s reality and future goals. Even if the initial findings are daunting, a thoughtful, phased approach can make the path forward manageable and successful.
About Angie Sanchez Virnoche
Angie Sanchez Virnoche brings 31 years of experience in financial and rate development services for water, wastewater, stormwater, solid waste and electric utilities. Her knowledge spans policy development, financial planning, cost-of-service studies, rate design modernization and capital funding prioritization. Angie collaborates with bond advisors, attorneys, and engineers and regularly presents to advisory groups, councils, and commissions to facilitate community education and consensus building. She has actively shaped the rate-setting industry through various board and committee roles, making her a key voice in guiding utilities toward sustainable financial futures.
Tags:Financial ConsultingPublic UtilitiesQ&A
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