CPS bills increased 25% from ’21
Record-breaking temperatures, as well as higher costs for gas, are behind the jump
San Antonio households saw their CPS Energy bills increase 25 percent in May from a year earlier — and that was before searing temperatures in June pushed usage even higher.
CPS customers paid an average $150 for electric and gas service in May, up $30 from the same month last year.
As bills jump, the city-owned utility is delivering millions more in revenue to the city of San Antonio, a windfall City Hall is apparently not immediately willing to touch to reduce the impact on ratepayers.
More than half of the increase in May — the most recent month for which data was available — was caused by customers using more electricity to power air conditioners amid recent recordbreaking temperatures. But other factors are also driving the jump.
Chief among them is the rising price of natural gas, which a CPS financial report said “resulted in an unavoidable impact on customers’ bills.”
Higher costs for gas — the main fuel CPS uses at its power plants — accounted for nearly $9 of the average increase in May bills. Gas prices have swung wildly over the past year, rising from about $3.50 per unit last summer to more than $9 in early June before falling back below $7 late last month.
Meanwhile, CPS began charging higher rates in March after City Council approved a rate increase. That added an average $3.24 to electric bills in May.
On top of that, CPS ratepayers are paying about $1 extra each month for the next 25 years to cover the cost of natural gas CPS bought at exorbitant prices during Winter Storm Uri.
CPS customers aren’t alone. Monthly bills are rising sharply for customers of utilities across the state as gas prices have jumped, according to data from the Public Utility Commission of
Texas.
The gas price increases are largely a result of Russia's invasion of Ukraine early this year, an event that shocked global energy markets and pushed European nations to wean themselves off of Russian natural gas. In its place, more have been buying liquefied natural gas delivered by ship from the U.S., cutting into domestic supply and making natural gas more expensive stateside.
High gas prices and elevated electric consumption from customers have increased CPS' expenses this year. Even so, it generated $197 million more in revenue through May than it was expecting. And because the city of San Antonio receives about 13 percent of the utility's revenue, its take so far this year has been millions of dollars more than the city anticipated.
Entering the fiscal year, which begins for CPS in February, the utility was expecting to show a $32 million loss through May. But higher electric sales pushed it to a $1 million profit at the end of May — a $33 million difference. In last week's financial report, CPS said it expects “headwinds in the remainder of the year that may offset” the additional revenue.
For its part, the city has received $97 million in payments from CPS through May, or $7 million more than expected. For the entire fiscal year, CPS now is budgeting to pay the city $443 million — $55 million more than expected.
It's not clear whether the city could use the windfall this year to help cover households' escalating utility bills. When CPS sought a rate increase from council earlier this year, the city's top finance officials were unwilling to discuss reducing the portion of CPS revenues the city collects to offset the higher rates.
Instead, the city directed $20 million from the federal American Rescue Plan Act to help CPS pay off some delinquent customer accounts. And while the city takes a chunk of every dollar CPS brings in, it is not taking any part of the Uri-related charges customers are paying every month.
City staffers are updating projections related to CPS payments and “evaluating options for potential assistance for CPS Energy customers,” a city spokeswoman said Tuesday by e-mail.
But assistance, if there is any, would not come until later this year, the spokeswoman said. “Any recommendations would be included as part of the proposed budget to be presented to City Council by the city manager” on Aug. 11.
Rising utility costs have caused more customers to fall behind on their bills. CPS Interim CEO Rudy Garza said last week that thousands of customers who fell in arrears during the pandemic are catching up each month, but thousands more customers are falling past-due.
Amid the affordability crunch for customers, CPS is in the process of crafting its long-term power generation plans. Natural gas figures to play a big role for the utility in the years to come.
Before the end of this year, CPS plans to sign a five-year agreement with a natural gas plant in Texas to provide gas to the facility and take back the electricity it generates. The socalled tolling agreement would have an option for an additional five year period.
Even as natural gas prices have risen in recent months, Garza has said the utility must have more gas-fired generation it can turn on and off to go alongside wind and solar arrays. Contracting with another gas plant would allow CPS to close its aging Braunig gas-fired units that were built in Southeast Bexar County in the 1960s.