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CPS Energy Board President Francine Romero is pushing back on Governor Greg Abbott's claims that bringing private competition to San Antonio's energy market would save consumers.
“There is so much wrong with that,” Romero said.
Speaking Thursday morning at Texas Public Radio’s Luminaries breakfast event, Romero said Abbott was misrepresenting how competition with residential electricity providers in Houston created lower energy bills.
At an Aug. 4 San Antonio event, Abbott announced he would ask the state legislature to end city monopolies of energy which includes San Antonio and Austin. He said bringing private competition would lower power utility bills. Abbott said the average cost of electricity in San Antonio was about 12 cents per kilowatt-hour.
“In Houston, it’s available as low as 6 cents per kilowatt hour. So you could really reduce your electricity costs a whole lot,” Abbott said.
Romero said she went online to investigate how much a kilowatt hour would cost in Houston and she couldn’t find Abbott’s price of 6 cents.
“The cheapest rate I could find was 12.6 – 12.9 cents a kilowatt hour.,” she said.
She said there might be cheaper introductory rates for customers but then the price goes up.
“I would challenge anyone to go look up these rates in Houston today and take the governor’s advice and he was wrong,” Romero said.
Frank Almaraz, interim president and CEO for CPS Energy, rejected the governor’s office calling the transfer of 14% of CPS Energy’s revenue to the city’s general revenue fund as a “slush fund.”
Last year CPS Energy provided to San Antonio’s city budget over $500 million, one of the largest sources of general revenue for the city. The city used that to pay for a variety of services including police, fire fighting, parks and libraries.
Almaraz, who was also speaking at the TPR Luminaries event, said these are “critical services for our community.”
He added if a for-profit company was the local energy provider those dollars would instead be siphoned out of San Antonio and added, “We’re going to see whether it goes to others in the state or country or the globe as a return.”
Romero said because CPS Energy is run by an independent board, they are motivated to keep rates affordable and not squeeze out extra money for a “slush fund.”
She said this is serious business “and quite honestly the governor is making jokes about Zumba classes.”
Abbott said money collected through CPS Energy rates was transferred to San Antonio’s budget and then used for purposes unrelated to providing electricity.
“Some money that was used in that fund was used for Zumba classes,” Abbott said.
“That’s not what you’re paying your electricity bill for,” he said.
It’s up to the San Antonio City Council to decide how the general revenue is allocated.
“What I can say unequivocally is that the municipal model is good for San Antonio,” said Romero.
Romero said independent research does not support the idea that energy competition automatically produces lower residential bills. She cited a decade old study by The Wall Street Journal examining energy deregulation Texas that was implemented in 2001.
“And then ten years in, Wall Street Journal concluded that residential customers paid $12.6 billion more in the deregulated market than they would have if everything had just stayed the way it was,” Romero said.
