The Sacramento Municipal Utility District, struggling with lower-than-expected revenue, may have to cut costs and raise rates, utility officials acknowledged during this week\u2019s meeting of the SMUD Board of Directors. In a financial report given at the July 17 meeting, district controller Cary Nethaway revealed that year-to-date revenue was down by about three percent from projections. \u201cThe district\u2019s activities have resulted in a decrease in our net assets of $25.6 million, that\u2019s compared to a planned decrease of $18.8 million, which is a negative variance of $6.8 million,\u201d through the first five months of 2008, Nethaway said. The muni budgeted $434.5 million in revenues through May 31, but actual revenues were $420.8 million, $13.7 million less than expected, or about 3 percent. The decrease is mostly attributed to lower usage and a lower number of customers, Nethaway said. Expenditures, however, were also lower than anticipated. Budgeted expenditures were $453.3 for the five-month time period, but the actual amount was $446.4 million, $6.9 million lower than planned, a savings of about 1.5 percent. \u201cThe increase in natural gas prices coupled with the struggling economy has put the district into an anticipated shortfall position for 2010 and 2011 given how high the gas prices are going. So we will need to address that and look at a combination of lowering costs and increasing rates,\u201d board member Genevieve Shiroma said. For the current fiscal year, SMUD is anticipating a $50 million shortfall in its overall $1.3 billion budget, according to district chief financial officer Jim Tracy. The utility has said it\u2019s looking at ways internally to close the financial gap. Also at the July 17 meeting the board authorized general manager John DiStasio to sign amended full service agreements with Vestas-American Wind Technology for $6.48 million, covering SMUD\u2019s Vestas V-47 wind turbine generators, and for $26.66 million, covering SMUD\u2019s Vestas V-90 wind turbine generators. The amended full service operation and maintenance agreements cover operations, service, and maintenance of the Phase 1 and 2 turbines at the Solano Wind Project through Dec. 20, 2017. A five-year extension to an electric services agreement with the State of California Division of Fairs and Expositions providing for customer tailored rates also was approved. Each vote was 5-0. Board president Larry Carr and member Bill Slayton were absent.