SAN ANTONIO – Continuing with its promise — or warning — of pursuing rate increases more regularly, CPS Energy will request a new rate hike on Wednesday, a little less than two years since the last one passed.
The city-owned gas and electric utility will lay out its proposal to increase its gas and electric base rates by 4.25% in a pair of meetings Wednesday before the CPS Energy Board of Trustees and San Antonio City Council. The utility says the increase would raise the average residential customer’s bills by less than $5.
The board meeting begins at 11 a.m., and it will be livestreamed in this article. The council meeting begins at 2 p.m..
The basics
The requested 4.25% increase is lower than the utility had originally been forecasting, but CPS Energy officials say they plan to continue coming back for at least a conversation about rate increases every two years through 2030.
For the current rate hike, the utility hopes to get board and City Council approval in early December. If both bodies approve the change, the new rates would take effect on Feb. 1, 2024.
The utility’s proposed increase would raise the average residential customer’s monthly gas and electric bill by about $4.45. Small commercial customers would see their electric bills increase by about $18, and their gas bills go up by $7 every month.
Larger businesses could see their monthly electric bills increase by hundreds — or even thousands of dollars — at an average change of 3%, according to the same presentation.
The utility expects the increase would bring in another $85 million every year. Its plans for the money include replacing aging technology, more tree trimming, grid upgrades, and planning for a wave of pending retirements.
The utility also plans to increase its affordability discount program to offset about half of the average bill impact for residential customers.
2022 rate increase
CPS trustees and the San Antonio City Council last approved a rate increase in January 2022, which took effect March 1, 2022.
That increase was a two-part proposition: a 3.85% increase to the gas and electric base rates and the establishment of a “regulatory asset” that showed up as an increase to customers’ fuel adjustment charge. At the time, the utility estimated a combined $5.10 impact on the average residential bill.
At the time, the council voted 9-2 to approve the increase to the fuel charge and 8-3 on the base rate increase.
Councilwoman Teri Castillo (D5) and Councilman Jalen McKee-Rodriguez (D2) voted no on both, and Councilman Clayton Perry (D10) joined them in voting no for the base rate.
Mayor Ron Nirenberg, Councilman Mario Bravo (D1), Councilwoman Rebecca Viagran (D3), Councilwoman Adriana Rocha Garcia (D4), Councilwoman Melissa Cabello Havrda (D6), Councilwoman Ana Sandoval (D7), Councilman Manny Pelaez (D8), and Councilman John Courage (D9) all voted to approve both the fuel charge and rate increase.
Bravo, Sandoval, and Perry are no longer on the council.
Their successors have not yet voted on a CPS Energy rate: Councilwoman Sukh Kaur (D1), Councilwoman Marina Alderete Gavito (D7), and Councilman Marc Whyte (D10).
More reluctance?
The council has not started the official discussions about the rate proposal. But it has been long-expected and has lingered around the periphery of most discussions about other CPS Energy issues.
In a Nov. 1 council meeting, Pelaez warned that his support for the long-expected rate increase won’t be guaranteed this time around.
“The reality is, is that never before have I been put in a position where my constituents have been put under this much pressure. And there comes a point right, where I think it’s fair for council to say ‘no,’” Pelaez said.
More increases incoming
Before the March 2022 increase, the utility’s rates had stayed the same since February 2014 – just over eight years.
But the utility has said it plans to pursue more regular increases as it tries to improve its infrastructure, replace aging technology, and keep its systems growing along with the city.
Even during the 2022 rate increase discussions, the utility tentatively planned rate increases in its 2025 and 2027 fiscal years, which run from February through January.
CPS Energy’s presentation on Wednesday indicated an estimated 5.5% increase in FY 2027, and Chief Financial Officer Cory Kuchinsky told reporters he expects the utility will come back every two years through 2030 to at least hold a discussion about a possible rate increase.
The size of those future increases is not set in stone. For example, the current proposal being considered is already lower than the 5.5% the utility had used as a “placeholder” during conversations about the last increase. That was partly helped by the extra $130 million it raked in this year selling excess power to the rest of the Texas grid.
More information
CPS Energy has its own website with frequently asked questions about the rate proposal and a list of meetings beginning Nov. 8. The site also includes a bill estimator to calculate the effect on your specific utility bill.
You can also see the utility’s presentation below.
Original News Source Link
Need digital marketing for your business? Check out KingdomX Digital Marketing San Antonio!