CPS Energy seeks second rate increase in two years
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Power bills could rise in San Antonio again next year, as CPS Energy seeks its second rate hike from the City Council in two years.
What's happening: The city-owned utility wants to raise rates by 4.25% as it aims to replace aging technology and meet the power needs of a quickly growing city, among other upgrades.
Why it matters: CPS has been under pressure from advocates to reduce its carbon emissions and offer reliable energy sources amid a Texas power grid that has been stressed by both extreme heat and cold.
What they're saying: CPS's ability to continue its move away from coal-fired power is "absolutely impacted by our ability to get the support we need on our resources," CPS CEO Rudy Garza told trustees last week.
- "Nobody likes to increase rates," Mayor Ron Nirenberg, a CPS board member, said. "We've gotta have a really good justification for that, because our customers are also our owners."
How it works: The city owns CPS, but the utility operates independently with its own Board of Trustees. The mayor sits on the board.
- Rate increases are one of the few ways in which the City Council exercises direct control over CPS, as the utility needs the council's approval.
By the numbers: A 4.25% rate increase would bring in an extra $85 million annually for CPS, per the utility.
- Residential gas and electric customers would see their bills rise by $4.45 per month.
- Commercial electric customers would see an increase of anywhere from $18 to $17,127 per month, depending on their size.
Details: Of the $85 million, CPS would spend $26 million on reliability and resiliency efforts, $25 million on technology and security, $13 million on growth and $21 million on people. That means:
- Reliability and resiliency: Invest in new-generation technologies, reduce the impact of outages and prepare for increased material costs.
- Technology and security: Replace 20-year-old technology, protect against cybersecurity threats and enhance customer communication.
- Growth: Upgrade or replace aging service areas to meet population growth and update the grid.
- People: Hire and train new employees.
Flashback: In January 2022, the City Council approved a 3.85% rate increase for CPS, then the utility's first rate hike in eight years.
- The utility initially considered a 10% increase at the time but later scaled it back.
Zoom in: CPS is now on track to seek smaller increases every two years, in part to reduce the impact of a single larger increase.
- In another two years, CPS will seek an estimated 5.5% increase.
What's next: CPS's Board of Trustees is slated to vote on the rate hike on Dec. 4. If it's approved then, it will head to the City Council for a final vote on Dec. 7.
- The rate increase, if passed, will take effect Feb. 1.