Council seethes at CPS rate request

Utility’s bid for hike assailed as being tone deaf as users struggle with bills

City Council members bristled at CPS Energy’s proposed rate hike Wednesday, saying the utility must regain the public’s trust before looking to increase customers’ bills — and that San Antonians are already being bled dry.

“Now is the worst time ever to come in saying, ‘We need a rate increase,’” District 10 Councilman Clayton Perry said during a briefing by CPS officials. “Our property taxes go up every year. We’ve got inflation going on right now ... and then we’re piling on top of it.”

CPS is seeking a rate increase of 3.85 percent, which would raise the average customer’s bill by $5 per month beginning March 1.

More than 185,000 CPS customers are at least 30 days behind on their bills and owe the cityowned utility a total of $141 million. The average past-due balance was $693 as of Oct. 31.

The city of San Antonio gave $20 million in funding from the federal American Rescue Plan Act to CPS to pay off 20,000 customer accounts. But with thousands of customers still facing disconnection, several council members questioned the timing of the rate hike request.

“The reality and sobering conversation for me is in District 3 — I have over 10,000 residents pending disconnections,” said Councilwoman Phyllis Viagran, who represents the Southeast Side district. “It’s very important that we’re thoughtful about this rate increase.”

Since September, CPS officials and city staff have whittled the utility’s request from a hike of potentially more than of 10 percent. The 3.85 percent rate increase would bring in about $73 million per year in additional revenue.

Interim CPS chief executive Rudy Garza has said the utility will use the additional funds to pay for a new technology platform and to provide electric and gas service to new residential and commercial developments. Another $31 million would pay to weatherize the utility’s plants over the next couple of years.

CPS would use the remaining $13 million in new revenue to add employees, with a goal of hiring

250 new workers over the next year. Garza said Wednesday the utility’s employee count has fallen from 3,300 to around 2,900 today.

“I can’t run a utility company without employees, and we are dangerously low,” Garza said.

Several council members, including District 2’s Jalen Mckee-rodriguez and District 5’s Teri Castillo, said they want CPS to commit to closing the utility’s two-unit Spruce coal-fired power plant this decade, and to changing the way it bills customers — possibly

by charging business customers more and households less.

District 1 Councilman Mario Bravo said council should extract commitments from CPS before approving a rate hike. Council is expected to vote on the rate increase Jan. 13.

Accountability issues

“There are issues with trust and accountability, so this is a hard time to be coming to us asking for a rate increase,” Bravo said. “We’re definitely going to have to see, I believe, some commitments before we go through with this.”

CPS is planning to seek additional rate increases in 2024 and 2026.

The size of those future rate hikes will largely depend on what the utility decides to do with the Spruce coal plant — shutter it, convert the plant to run on natural gas or find another source of electricity. Changing the utility’s rate structure also could fuel the need for a rate hike.

The Rate Advisory Committee, made up of 21 San Antonio residents, will make a recommendation on the rate hike request before City Council votes on it next month. After that, the RAC will examine CPS’ power-generation priorities and how it bills customers.