CPS Energy prepares to ask for another rate hike

SAN ANTONIO – Continuing with its promise — or warning — of pursuing more rate increases, CPS Energy is preparing to unveil its latest request a little less than two years since the last one passed.

The city-owned gas and electric utility will request an increase of its gas and electric base rates by 4.25% from both the CPS Energy Board of Trustees and San Antonio City Council on Nov. 8 — a move it says would raise many customers’ bills by less than $5.

The basics

The “preliminary” figure of 4.25% was included in a presentation to a community input group Wednesday evening, and a utility spokeswoman confirmed to KSAT that it would be the same number presented next week.

The requested increase is lower than the utility had originally been forecasting, but additional rate hikes are still expected in the near future.

The utility hopes to get board and the city council approval for the current rate hike before the end of the year, she said in an emailed statement, with the goal of putting the rates into effect on Feb. 1, 2024.

The proposed increase would raise residential customers’ monthly gas and electric bills by about $4.45. Small commercial customers would see their electric bills increase by about $18, and their gas bills go up by $7 every month.

Larger businesses could see their monthly electric bills increase by hundreds — or even thousands of dollars — at an average change of 3%, according to the same presentation.

The utility expects the increase would bring in another $85 million every year. Its plans for the money include replacing aging technology, more tree trimming, grid upgrades, and planning for a wave of pending retirements.

The utility also plans to increase its affordability discount program to offset about half of the increased base rate costs.

2022 rate increase

CPS trustees and the San Antonio City Council last approved a rate increase in January 2022, which took effect March 1, 2022.

That increase was a two-part proposition: a 3.85% increase to the gas and electric base rates and the establishment of a “regulatory asset” that showed up as an increase to customers’ fuel adjustment charge. At the time, the utility estimated a combined $5.10 impact on the average residential bill.

At the time, the council voted 9-2 to approve the increase to the fuel charge and 8-3 on the base rate increase.

Councilwoman Teri Castillo (D5) and Councilman Jalen McKee-Rodriguez (D2) voted no on both, and Councilman Clayton Perry (D10) joined them in voting no for the base rate.

Mayor Ron Nirenberg, Councilman Mario Bravo (D1), Councilwoman Rebecca Viagran (D3), Councilwoman Adriana Rocha Garcia (D4), Councilwoman Melissa Cabello Havrda (D6), Councilwoman Ana Sandoval (D7), Councilman Manny Pelaez (D8), and Councilman John Courage (D9) all voted to approve both the fuel charge and rate increase.

Bravo, Sandoval, and Perry are no longer on the council.

Their successors have not yet voted on a CPS Energy rate: Councilwoman Sukh Kaur (D1), Councilwoman Marina Alderete Gavito (D7), and Councilman Marc Whyte (D10).

More reluctance?

The council has not started the official discussions about the rate proposal. But it has been long-expected and has lingered around the periphery of most discussions about other CPS Energy issues.

In a Wednesday council meeting, Pelaez warned that his support for the long-expected rate increase won’t be guaranteed this time around.

“The reality is, is that never before have I been put in a position where my constituents have been put under this much pressure. And there comes a point right, where I think it’s fair for council to say ‘no,’” Pelaez said.

More increases incoming

Before the March 2022 increase, the utility’s rates had stayed the same since February 2014 - just over eight years.

But the utility has said it plans to pursue more regular increases as it tries to improve its infrastructure, replace aging technology, and keep its systems growing along with the city.

Even during the 2022 rate increase discussions, the utility tentatively planned rate increases in its 2025 and 2027 fiscal years, which run from February through January.

The current proposal matches that first increase, and CEO Rudy Garza indicated at Wednesday’s council meeting that the second is still on the table, perhaps along with another in FY 2029.

“I can tell you we’ll need to come in two years from now and have a conversation. And then, likely the two years from then, we’ll at least need to put a placeholder in case there’s still some work to do,” Garza said.

The size of those future increases is not apparent yet. However, the new proposal is already lower than the 5.5% the utility had used as a “placeholder” during conversations about the last increase. That was partly helped by the extra $130 million it raked in this year selling excess power to the rest of the Texas grid.

More information

CPS Energy has its own website with frequently asked questions about the rate proposal and a list of meetings beginning Nov. 8.

You can also see their Nov. 1 presentation to a community input group below or watch the video of the meeting here.

Speak up

CPS Energy is soliciting public comment for its Wednesday, Nov. 8 meeting at 11 a.m. at CPS Energy Headquarters on McCullough Avenue.

You can register to speak at the meeting between Friday, Nov. 3, at 5 p.m. and Tuesday, Nov. 7, at 1 p.m. by calling 210-353-4662 or emailing PublicCommentRegistration@cpsenergy.com.