CPS Energy seeks second rate increase in two years

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.