CPS Energy’s Costs During Winter Storm Crisis Reach Nearly $1 Billion For Energy, Fuel It Had To Buy
CPS Energy officials are still figuring out the cost of the winter storm and energy crisis that left hundreds of thousands of people in San Antonio without power for days — but early estimates total almost $1 billion.
The costs stem from the municipally-owned utility having to buy nearly $200 million of electricity from ERCOT, the operator of Texas' grid, and up to $800 million worth of natural gas, which had skyrocketing costs during peak days of the crisis. CPS Energy is attempting to reduce the impact of the high cost via a $500 million loan that needs to be approved by the San Antonio City Council.
CPS Energy CEO and President Paula Gold-Williams told board members during a specially called meeting Monday about consumer electricity bills seen across Texas reaching several thousand dollars and that the utility is working to stop that.
“We are not sending out bills (to CPS Energy customers) that include these outrageously high prices for fuel and power,” she said. “That is what municipal power does, we make sure that we defend and protect our customers.”
The winter storm left San Antonio with below freezing temperatures for more than 100 hours with wind chills reaching minus 4 degrees early on Feb. 15.
Those sub-zero wind chills across Texas knocked power generators out of commission and plummeted millions of Texans into darkness, in some cases for several days, as ERCOT ordered utilities to shed load from the system in order to protect the grid.
The exorbitant cost CPS Energy and other utilities face is the result of power generators charging more for natural gas and extra electricity. The Public Utility Commission of Texas allowed the price of energy production to reach scarcity pricing levels.
That saw the price of natural gas skyrocket to more than 16,000% by CPS Energy’s count. The utility also had to purchase additional electricity through ERCOT. Gold Williams has noted that all of CPS Energy’s portfolio from it’s coal plant, nuclear power plants, solar and wind energy, and gas steam turbines suffered at least some kind reduction of power during the storm.
She said the utility would negotiate with all energy providers to bring down the $1 billion price tag.
“We are attacking that with every tool that we have both from a policy standpoint, a regulatory standpoint, we’re going to negotiate and we’re going to use all other tools that we can to get that down,” she said.
The utility is looking at multiple avenues to avoid passing on the costs to customers. That includes a $500 million loan. CPS Energy trustees approved asking the San Antonio City Council for the loan during Monday’s meeting.
San Antonio Mayor Ron Nirenberg sits on both the CPS Energy board and chairs the city council. He said that loan — if approved — would be meant to keep liquid assets available for CPS Energy’s day-to-day operations.
“This action allows CPS to maintain cash flow while we work to defend the rights of our citizens against having the cost burden of this disaster put on the backs of them while they suffered through one of the worst market failures and weather events in Texas history,” Nirenberg said.
Gaining access to that loan would take approval from the full San Antonio City Council.
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