San Antonio Express-News (Sunday)
Battle to approve rate increase the prelude to next big CPS fight
Manny Pelaez pulled a slick one during City Council’s debate over CPS Energy’s rate hike.
The District 8 councilman zeroed in on this scenario: If council voted down CPS’ 3.85 percent increase, the major bond-rating agencies would pounce, downgrading the utility’s debt. That, in turn, would push up its interest expenses by millions of dollars per year, a cost that ultimately would land on CPS customers.
“We can’t afford to be demoted by the credit-rating agencies,” Pelaez said during that Jan. 13 session. “If we allow that to happen, we will be responsible for sending more San Antonians’ money to fund managers and billionaires so they can go off and buy another Rolex or another bottle of Opus One or Pappy Van Winkle, or whatever it is these guys buy.”
In other words, jacking up CPS customers’ monthly bills was a way to assert ourselves against our greedy, drunken Wall Street overlords.
That’ll show ’em?
Pelaez is a pragmatic, business-friendly politician. He’s funny, with a finely tuned sense of the absurd. He’s also lawyerly (because he’s a lawyer) and has little patience for dogma. He was on the winning side in this par
ticular debate, which ended with an 8-3 vote to approve the rate increase.
Earlier in his remarks, the North Side councilman bemoaned
the many straw men and “false choices” that had punctuated the months-long public discussion about a rate hike. That included the notion
that rejecting the increase would punish the city-owned utility for its missteps during the winter storm nearly a year ago.
Then Pelaez made a straw
man out of the uber-rich. Why?
Needling the liberals
Apart from making a valid point about heftier interest pay
ments, maybe at least a small part of him wanted to needle
City Council’s two most outspoken liberals — District 2’s
Jalen McKee-Rodriguez and District 5’s Teri Castillo, both of whom joined District 10 Councilman Clayton Perry in voting against the rate increase.
McKee-Rodriguez and Castillo stood out that Thursday. They were trenchant, angry and unwilling to bow to the “business case” for a rate increase, which San Antonio’s major chambers of commerce endorsed. Part of that case centered on maintaining strong bond ratings.
Early in council’s three-hour session, CPS interim CEO Rudy Garza outlined why the utility needed to raise rates immediately, its first increase in eight years.
“Waiting will cost our community later in terms of higher rate increase requests,” Garza said. “And if our credit rating is downgraded, that means higher costs and less investment in our system.
“A no vote does not punish CPS Energy for Winter Storm
Uri. It hurts our customers and makes it more difficult to make the investments needed to make sure this does not happen again.”
McKee-Rodriguez, who represents the East Side, wasn’t putting up with it — from Garza or council members, such as Pelaez, who sided with him.
“That’s a misunderstanding and misrepresentation of our options and what our goals are as council members,” he said. “There’s no shortage of people on this dais who are going to represent the chambers of commerce, who are going to represent business interests and lobbyists. There is a shortage of people who are listening to constituents and saying, ‘I’m going to echo what they’re saying.’
“I’m going to vote on behalf of people making $18,000 a year.”
But the rate structure …
Castillo, the West Side’s council representative, was more targeted — and much more dogmatic. She dug into CPS’ rate
structure, specifically the discounts granted to heavy industrial users that aren’t available to residential customers and smaller businesses.
Several council members talked that day about the need to overhaul how CPS charges both its business and residential customers, to make it fairer to families. But Castillo was the only bulldog.
“The time for the rate increase is when we’ve restructured the inequitable rate structure,” she said. “Instead of making residents and small businesses bear the brunt, why not take a first look at restructuring rates so that higher volume users are paying for using more power?”
Large companies (think Toyota or H-E-B) gobble up more than half of the electricity CPS provides but kick in less than 40 percent of the utility’s total revenue,
she said.
“Small and micro-businesses do not enjoy the sweetheart deals that large industrial users do,” she added.
Castillo then channeled the labor left of the early to mid-20th century.
“I can already hear the counterargument: Big Business creates jobs,” she said. “Well, Big Business exists on the backs and the work and the tears of the working class.”
Both Castillo and McKee-Rodriguez represent parts of San Antonio that struggle with outsized poverty. They both won office in June runoffs. They are obviously fighters. And the go-alongto-get-along mindset that usually dominates City Council is anathema to them.
Democratic socialists
Castillo and McKee-Rodriguez
had the backing of the local Democratic Socialists of America in their races. And both have embraced Austin’s Greg Casar, a self-avowed democratic socialist, in the upcoming Democratic primary in the 35th Congressional District.
For some idea of what this growing political movement — whose swaggering star is New York Rep. Alexandria OcasioCortez — is about, read the Democratic Socialists of America’s mission statement:
“We want to collectively own the key economic drivers that dominate our lives, such as energy production and transportation. We want the multiracial working class united in solidarity instead of divided by fear. We want to win ‘radical’ reforms like single-payer Medicare for All, defunding the police/refunding communities, the Green New
Deal, and more as a transition to a freer, more just life.”
The movement must have warm feelings for San Antonio, where taxpayers collectively own its electric and water utilities.
But its adherents most likely would agree with Castillo about the unfairness of CPS’ rate structure.
Interim CEO Garza promised council members the utility would produce a plan by year’s end for changing the way it charges residential and business customers. You probably can take that pledge to the bank.
After all, Garza has said the utility will ask City Council to OK additional rate hikes in 2024 and 2026. Blowing off rate reform, thereby ticking off council reps, would be a politically disastrous move for the utility.
The next fight
However, as reassuring as Garza’s vow was to some council members, this will be the next CPS fight. And it promises to be a big one.
For generations, San Antonio officials have used cheap power and water as one of their lures for large outside companies such as Toyota and Microsoft, which operates several data centers here. A proposal to make industrial customers pay more will galvanize chambers of commerce, the San Antonio Manufacturers Association and other business leaders.
The same will be true of the grassroots Texas Organizing Project and a bevy of other environmental and social justice groups.
City Council chambers will be one of the main battlegrounds.
I’d expect Castillo and McKeeRodriguez to push for sweeping, structural changes on behalf of low-income San Antonians. Without the cartoonish takedowns of Big Business and shadowy, slivery “business interests”? That’s too much to hope for.
But that’s months away. Pelaez has plenty of time to work on his material.