CPS Energy board approves rate increase, plans more future hikes
SAN ANTONIO (KTSA News) — The CPS Energy Board of Trustees voted to approve the first rate increase in nearly a decade today with plans to raise rates at least two more times in the future.
The approval by the board means the San Antonio City Council will vote Thursday to implement the hike, which is expected to go in effect on March 1.
“I just want to make a commitment to this board and to our community that my goal is to continue to just work collaboratively with our community,” CPS Energy Interim President Rudy Garza said. “We know … we can be a business owned by the city and a community partner at the same time. Those concepts are not mutually exclusive. We can be both.”
The proposed financial plan presented today to the board included a rate evaluation to be done every two years with plans to implement two separate 5.5% rate increases in fiscal year 2025 and 2027 respectively. Officials said those figures are subject to change.
The board voted to implement both a 3.85% rate increase and increased based on offsetting winter storm debts, which will mean that most residential customers will see their bills go up by about $5.10.
Of that $5.10, officials said $1.26 of that will go towards offsetting debts incurred by CPS Energy during the February 2021 winter storm. The remaining $3.84 is the result of the $3.85 rate increase.
“I remember sitting here in the summer, seeing the first projections and what was being considered in the rate and really focusing on the question on process, making sure we’re narrowing the request to things that we absolutely needed,” Mayor Ron Nirenberg, who is also an ex-officio member of the board, said.
CPS Energy said they expect $73 million in revenue with the rate hike.
Officials broke down how the revenue will be used:
- $31 million will go towards infrastructure resiliency including enhanced customer communications, improved experience during controlled outages, upgraded weatherization at power plants, and alternative fuel sources for generation.
- $15 million will be used for technology upgrades including a review of the current state of the company software system and upgrade it to better meet customer needs, and to design a plan to deliver needed technology “to support future operations.”
- $14 million will be used to expand services to include new substations and expanding already existing substations, re-routing electric lines to accommodate new construction, and building additional power poles, wires and meters.
- $13 million will be used to invest in the human infrastructure at CPS Energy, which includes filling 400 vacant positions, raising the minimum wage to $18 per hour, reinstate annual merit-based salary adjustments and to make market adjustment to attract and retain employees.
The utility paused disconnections for non-payment nearly two years ago when the COVID-19 pandemic began and resumed disconnections in the fall.
CPS Energy reports that at the end of October, more than 185,000 customers were at least 30 days past due with a total balance of more than $141 million.