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CPS Energy bills will increase in March after San Antonio City Council approves rate hike

CPS Energy Interim CEO and President Rudy Garza
Joey Palacios
Texas Public Radio
CPS Energy Interim CEO Rudy Garza

This post has been updated.

The average monthly CPS Energy bill will go up by about $5 in the Spring as the San Antonio City Council gave the green light to a 3.84% increase Thursday.

The vote ends months of debate that started with a rate increase of over 10% proposed last summer. However, after public resistance and the exit of high-level leadership at the utility, the increase was adjusted significantly lower. It comes several months after CPS Energy resumed pandemic-related disconnections and almost a year before the anniversary of the winter storm in 2021.

The vote was split into two separate issues. The approval of a regulatory asset to pay for the costs of the winter storm over the next 25 years passed 9-2 with council members Jalen McKee-Rodriguez of District 2 and Teri Castillo of District 5 voting against.

The base rate increase passed 8-3 with District 10 councilman Clayton Perry joining McKee-Rodriguez and Castillo in the dissent.

“No time is a good time for a rate increase, but after eight years, it is time to do the right thing and as CPS Energy continues to build trust we will continue to assess their needs. Making the right decision today protects the future of San Antonio’s only energy company, a future that we know soon will be without coal,” San Antonio Mayor Ron Nirenberg said before Thursday’s vote was final.

Utility officials have spent the last several months on a campaign to educate the public on why it says the increase was necessary. Interim CEO Rudy Garza said on several occasions the cost of building infrastructure was going up, weatherization of plants and energy sources was essential and being able to address reduced staffing levels with competitive compensation was needed.

“This rate increase is about our ability to serve our customers — nothing more, nothing less — and ensure that we have the resources necessary to provide the fundamental utility services our customers expect and deserve from us. The timing is never right for these asks, but if we don’t do this now, there will be greater negative impacts in the future,” Garza told the council.

The rate increase includes a charge on natural gas usage that equates to about $1.25 per monthly bill that will be included for the next 25 years. That charge, called a regulatory asset, will be used to fund the more than $400 million CPS Energy has paid to natural gas providers during the winter storm last year. Nearly $1 billion was charged to the utility but about half remains in dispute.

Approximately 400,000 CPS Energy customers were affected by the storm and lost power for hours or several days as the state weathered an energy crisis during historically cold temperatures.

The utility is also owed more than $150 million in overdue accounts from tens of thousands of customers who fell behind on their bills during the pandemic. The utility resumed disconnections in the fall but stated that those who are on payment plans would not be disconnected.

Councilwoman Castillo attempted to delay the vote on the base rate increase by a year to January of 2023. Castillo wanted CPS Energy to examine rate restructuring where the cost of energy usage is adequately applied.

“Instead of making residents and small businesses bear the brunt, why not take a look at restructuring rates so higher-volume uses are paying for using more power rather than being incentivized to use more?” she asked.

Castillo’s motion to delay was seconded by councilman McKee-Rodriguez. Councilman Perry voted in favor of it but ultimately it failed 3-8.

Multiple council members asked for commitments from CPS Energy on various issues, including ending the use of coal-fired power plants.

CPS Energy has weighed the phasing out of it’s Spruce coal plant but has not provided a formal commitment to a timeline. District 7 Councilwoman Ana Sandoval asked for one before voting.

“It is absolutely past time for the largest municipal utility in the nation to take a formal position and a leadership position on fighting climate change and ending the use of coal,” she said.

Garza said issuing a plan for phasing out coal was something the utility could commit to by the end of the year. “Our board should be able to make some decisions on these issues,” he said.

The last rate increase was eight years ago. The time between the current increase and the next is likely to be much shorter. Utility officials on Thursday presented that two separate 5.50% rate increases were possible in 2025 and 2027.

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Joey Palacios can be reached atJoey@TPR.org and on Twitter at @Joeycules