CPS Energy eyes more natural gas as demand soars
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CPS Energy is looking to rely more on natural gas and solar power, but less on wind, as San Antonio's electricity needs surge past what the utility forecast just three years ago.
Why it matters: Without changes, capacity will begin to fall short of demand by the early part of the next decade, which could mean higher costs for consumers — though CPS officials say they are working to prevent that.
- The city-owned utility faces a balancing act of keeping up with fast-paced growth in electric demand while pursuing its goal to be carbon neutral by 2050.
The big picture: One of the biggest changes since the forecast in 2023 is the expansion in data centers, David Kee, director of energy market policy at CPS, tells Axios. But the area's population has also boomed more than anticipated.
State of play: The annual growth in peak demand is now expected to be 260 megawatts, more than double the 115 megawatts originally forecast, per CPS figures.
Flashback: In early 2023, CPS' board of trustees approved a portfolio of energy sources as part of a plan to shutter the coal-fired J.K. Spruce 1 plant by the end of 2028, and convert the Spruce 2 coal plant to run on natural gas.
The latest: Utility officials are now looking for the board to approve an updated portfolio to meet the higher demand. The plan to end coal use is still on track.
Zoom in: Kee has presented three portfolio options to the board.
- The one he recommends includes 40% natural gas, up from 30% in the current plan, and 28% solar power, up from 21%. Wind power would fall from 19% to 15%.
- Another plan would use 66% natural gas, 11% solar and 9% wind.
- The third option would have solar and wind combined account for 53% of the portfolio, with natural gas at 23%.
Context: Kee and Kevin Pollo, senior director of asset management, say the recommended plan balances affordability with climate goals.
- The natural-gas-heavy option would come with a cheaper price tag but the highest emissions, while the most climate-friendly option would be the most expensive.
Reality check: The recommended plan gets CPS slightly closer to meeting its climate goals than the current plan, but both fall short of meeting CPS' emissions targets for 2040.
What they're saying: "We know we've got some work to do, and we continue to look at how we can continue to drive down our total emissions," Pollo tells Axios.
- He says updating the plan doesn't change CPS' commitment to its emissions targets.
Zoom out: Across Texas, gas generation is making a comeback as wind power takes a back seat, per the Texas Tribune, driven by the fast growth in data centers.
What's next: Utility officials plan to present the options Wednesday to CPS' Community Input Committee, a volunteer advisory board of residents.
- The board of trustees is expected to vote on a new plan at its June meeting.