CPS Energy Considers Rate Increase To Offset Costs Of Winter Storm, Pandemic And General Operations
CPS Energy is exploring what officials call a provisional rate increase that could go into effect later this year.
While the rate increase isn’t set in stone, it is on the table, and executives at the utility believe it may be needed. Details have not been finalized but it could be in the range of 6.5% to 9.5% which could mean bills would increase between $9 and about $15 in 2022 if a rate adjustment is approved by the CPS Energy Board of Trustees and San Antonio City Council.
A pause on disconnections during the pandemic and the sky high costs of the winter storm have put the utility in a tight spot.
“All of those things would make it difficult to finish this year without a rate increase,” CPS Energy president and CEO Paul Gold-Williams said. “But we don’t want to tell people that it’s not possible we’re trying to have a transparent conversation about those pressures, what’s out there, we are still trying to work as hard as we can to find other solutions.”
The potential increase is divided up in three parts.
About 4% to 4.5% would be for increasing general operation costs.
Another 1% to 2% would be towards pandemic related debt such as the impact of pausing disconnections. Currently, CPS Energy is owed more than $100 million in past due accounts
The final increase being explored is for the winter storm and that would last about 25 years which could range between 1.5% to 3%. The utility is fighting more than $1 billion in winter storm costs — like buying natural gas and extra electricity — through multiple lawsuits over providers and ERCOT.
San Antonio Mayor Ron Nirenberg, who sits on the CPS Energy Board, said the winter storm portion of the potential rate increase was still undecided as the utility’s lawsuits navigate the court system.
“We don’t know what that number is going to be — the preference is that it’s zero — but that is going to be a number that changes and our litigation strategy is the ones who suffered through the crisis are the ones saddled with the bills,” Nirenberg said.
Even without the pandemic and winter storm, this year could have seen an increase anyway, Gold-Williams said.
“Just to maintain operations there would have been — we believe — something but then pandemic added to there and (Winter Storm) Uri added to there but no matter what I think - again - with where we are, there was kind of a moderate increase that was on there,” she said.
The last CPS Energy rate increase was in 2014 which was about 4%.
During the board meeting, several citizens spoke up against both the potential rate increase and ending the pause on disconnections. CPS had said previously disconnections could resume in late spring or summer.
Karen Munoz, a Northwest Side San Antonio resident, told CPS Energy’s board of Trustees that a rate hike and resuming disconnections would lead to more dire poverty situations.
“Continuing disconnections and hiking up rates will only worsen this reality, disconnections lead to evictions lead to family separation, and COVID, continued cycles of poverty, and worse,” Munoz said.
A timeline for any rate increase was not set but a decision could be made in the fall — after the summer months when CPS Energy generates the most revenue from electricity usage and selling excess energy on the wholesale market.
“We won’t ask them for one more penny than we need, this is just explaining we’re at this point — after seven years — we’re at this point that we have to really have to look at this honestly and say it’s a real possibility,” Gold-Williams said.
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