CPS eyeing how to pay storm’s big bill
Customers urge utility not to boost their monthly costs
CPS Energy customers won’t see dramatically higher monthly bills stemming from last week’s winter storm — at least not yet.
On Monday, CEO Paula Gold-williams said the city-owned utility is still assessing the expenses caused by the deep freeze, which set off prolonged power outages in San Antonio and across Texas.
Determining the extent of the financial hit, which includes the runaway cost of natural gas last week, could take weeks.
“We want to do all we can to get access to funds and assistance to reduce the bill on San Antonio,” she said. “We are taking time now to look at that.”
Gold-williams’ assurance came as cold comfort to ratepayers, some of whom are calling on the utility to find ways to cover the expense without driving up their monthly bills.
At a Monday meeting of CPS’ board, 108 residents signed up to address the utility’s five trustees. One of them was customer Maria Rodriguez, who said she and her family went without electricity for 96 hours last week.
“We had to put (my brother’s) insulin in the snow,” she said. “So it’s just very sad what we went through.”
Last week, Gold-williams said the utility would look for ways to whittle down the expense over a 10-year period. But customers swiftly panned the idea on Facebook and Twitter.
State and local officials spanning the political spectrum — among them Republican Gov. Greg Abbott and U.S. Rep. Joaquin Castro, D-san Antonio — also rejected the idea that sky-high costs spurred by the winter storm should be passed along to ratepayers.
In a letter Monday to the CEO of the Electric Reliability Council of Texas, the state’s grid operator, more than a dozen Texas mayors — including San Antonio’s Ron Nirenberg, Sylvester Turner in Houston and Steve Adler in Austin — called on state leaders to review the “policies and decisions that left our cities and the entire state vulnerable during (last) week’s extreme weather event.”
“It has become painfully clear that our communities were made vulnerable by numerous decisions by (ERCOT’S) leadership,” the mayors wrote.
Nirenberg, who is also a CPS trustee, has said there would be “hell to pay” if residents wind up paying higher bills as a result of skyrocketing energy prices. Last week, he suggested CPS “should send the bill to ERCOT” rather than residents.
“If you put it on the backs of ratepayers, every elected official in Texas, and frankly across the country, should be against that,” Nirenberg said in an interview Monday. “The first thing lawmakers should be asking themselves is who got rich while Texans suffered.”
Others blamed CPS for not adequately preparing for severe winter weather after the last deep freeze in 2011.
“A challenging winter storm isn’t new to Texas,” said Mario Bravo, a project manager at the Environmental Defense Fund and a City Council candidate in District 1.
As power plants failed and natural gas pipelines and wellheads froze Feb. 14 and 15, there wasn’t enough electricity to meet demand across Texas. ERCOT told utilities statewide they had to cut power to homes and businesses to save the grid.
Gold-williams said ERCOT ordered CPS to slash five times as much power last week as it cut during the 2011 cold snap, which also resulted in blackouts in San Antonio.
The grid operator also directed natural gas providers to preserve the fossil fuel to use for heating homes rather than sending it to power plants to generate electricity.
The freeze sharply reduced the natural gas supply as demand for gas heat and electricity hit a new high in Texas. As the storm’s severity became clear, prices for natural gas in the Permian Basin skyrocketed more than 6,000 percent.
CPS Energy had to buy natural gas at those astronomical prices to fuel power generation at its plants, Gold-williams said.
“Typically, the gas price is affordable. But in this case, we had all the issues with supply,” she said. “That was happening across the state.”
CPS paid for some of the gas out of its cash reserves.
Covering the cost isn’t as simple as asking ERCOT to pay CPS’ natural gas bill. The utility owes natural gas suppliers, not the grid operator, Gold-williams said.
“The biggest piece of (the expense) is from a completely different group of entities where we’re buying fuel,” she said. “They are not ERCOT bills.”
State lawmakers are grappling with the question of how to stop utilities from passing fuel costs to their customers. In a Sunday appearance in San Antonio, Abbott said storm-related utility bills will be the Legislature’s “top priority.”
“Texans who suffered through days of freezing cold without power should not be subjected to skyrocketing energy bills due to a spike in the energy market,” Abbott said.
State Rep. Lyle Larson, a San Antonio Republican, is urging Texas leaders to dip into the state’s so-called rainy day fund to offset those costs — a move Abbott didn’t rule out Sunday.
“It is our fault we did not weatherize our power generation capacity,” Larson said in a Sunday tweet.
On Monday, Nirenberg appeared to favor Larson’s idea. But he said he’d also spoken with the White House about potential federal relief for utility customers.
Taking money out of city coffers is out of the question, he said.
“We shouldn’t collectively just roll over for the debacle that happened last week,” Nirenberg said.
Gold-williams has said CPS will seek reimbursement from the state and federal governments. The utility could also sell bonds and use other financial instruments to spread out the cost over years.
At Monday’s CPS board meeting, customers bridled at the notion they’d be stuck with higher bills after going without power for hours or days last week.
“CPS put out a tweet about socalled bill relief, telling folks that they can pay back their bill over 10 years for power they may or may not have had,” Isabel Castro said. “That is not relief. That is a burden.”
Some called on Gold-williams and other CPS executives to forgo bonuses or their salaries to help cover the costs.
Gold-williams said CPS in May canceled $13 million in incentive bonuses to 1,800 of the utility’s employees as the COVID-19 pandemic cut into the utility’s bottom line.
The CEO, who makes a base salary of nearly $486,000, had been set to receive a bonus of $530,000.
“There are people that continue to bring up compensation as an element to be focused on,” Gold-williams said Monday. “What we believe is that we need to be focused on providing energy and serving and connecting and finding solutions.”