The San Antonio City Council will vote on whether or not to raise CPS Energy’s base rate by 4.25% on Thursday morning, however, it appears the vote will be anything but simple.
While about half of the City Council’s members appear poised to approve the rate request, other members have promised to vote against the hike, citing affordability concerns for their constituents as the main deterrent. Still, others told the San Antonio Report their vote is undecided, and they will make their decision based on Thursday’s discussions. A few council members declined to comment on their vote or were unavailable for questions.
The council’s most vocal advocate for passing the rate request has been Mayor Ron Nirenberg, who sits on the utility’s board of trustees in his official capacity. Earlier this week, CPS Energy’s five trustees, including the mayor, unanimously approved a 4.25% base rate increase, which will bring the average monthly residential bill of $181.10 up roughly $4.45 a month.
The increase would generate an additional estimated $85 million in revenue per year, money CPS Energy says it will require to keep pace with San Antonio’s growing power needs. With that revenue, the utility plans to improve and build new electricity and gas infrastructure, hire employees and replace its 25-year-old computer system.
Should council approve the rate request, CPS Energy customers will start seeing the rate hike on their bills starting in March.
“CPS [Energy] staff, I think, has done its due diligence, and so has Ben Gorzell on our city team, to really drill down on this rate request and ensure there are proper justifications,” Nirenberg told reporters Monday after the utility’s board meeting. “CPS [Energy] is a critical community asset, and in order for us to continue to depend on it, we have to make the proper investments in maintaining it.”
An easy choice
Similar to the mayor, Councilman John Courage (D9) stands steadfast in his decision to support the rate increase.
Courage told the San Antonio Report he always carefully considers CPS Energy’s proposed rate adjustments, but he feels the utility has “significantly demonstrated the current proposal for a 4.25% rate increase is immediately needed to ensure continued adequate, efficient, and reliable energy delivery to every household and business in the CPS Energy system.”
Courage added the utility has shown it needs critical technology upgrades to ensure it can operate effectively and safely; needs to add new energy production sources to replacing aging infrastructure; needs additional manpower to support its retiring staff; and can support the city’s population growth.
“However, the current need does not guarantee any future rate adjustments,” he said. “We will need to monitor how effectively CPS Energy applies this increase to address these concerns to serve our community. As with this request, any future rate request will need to be justified and stand on its own before I would consider voting for raising residents’ energy bills.”
Additional support
Councilwomen Adriana Rocha Garcia (D4) and Melissa Cabello Havrda (D6) said they also believe there needs to be significant investments made into CPS Energy at this time to ensure grid reliability as the city and its population grow. They added they’d like to see another solution than increasing rates, but said they will vote for the rate increase, if need be.
Rocha Garcia told the San Antonio Report her biggest concern throughout this rate request has been transparency. During a council meeting last week, Rocha Garcia brought up an ordinance in the City Charter that states City Council should be receiving annual reports on the state of its municipal utilities.
“I feel that if we got that update once a year … that we could avoid what I would call these surprises,” she said. “For the next rate increase, we should have no surprises.”
Cabello Havrda said she hopes to hear any innovative solutions council members may have. For the past several months, she has floated the question of whether or not CPS Energy could potentially keep more of its profits. In September, Cabello Havrda filed a Council Consideration Request that suggests reducing the city’s 14% cut of CPS Energy’s revenue to 11% or 12% percent to avoid rate increases.
Her request came after council discussions on how to spend yet another “windfall” the city had received from CPS Energy after another brutal summer drove up ratepayers’ bills. The city received roughly $20 million more from CPS Energy this year than it had expected, some of which it decided to put toward a controversial reproductive health fund. Last year, the city received an even bigger chunk of change — $75 million — that it put about $25 million toward green initiatives and returned the other $50 million to CPS Energy customers in rebates.
Members of the Governance Committee initially greenlit a revised version of Cabello Havrda’s plan that would direct a smaller amount of the city’s profits back to CPS Energy in the case of a windfall. It has not, however, received the approval of the full council.
“I’m open to ideas,” she said. “I want to keep my mind open to any ideas that are coming out — any variations of [my plan] or finding a more innovative way, more creative way — to pay for the upgrades needed than asking our community to pay for it.”
Strong opposition
On the other end of the dais, several council members have voiced opposition to the rate increase and said they will likely vote against it.
Over the past several weeks, Councilmen Jalen McKee-Rodriguez (D2) and Marc Whyte (D10) and Councilwoman Teri Castillo (D5) have all expressed that their constituencies are averse to the 4.25% base rate increase.
McKee-Rodriguez said he understands CPS Energy needs funds to invest in better, greener infrastructure. However, he would like to see the utility come up with those funds some other way.
“I have residents who are left with just a few dollars of their paycheck after they pay their bills, buy groceries, medications, diapers and other necessities,” he said. “This increase will be a heavier burden on those who cannot afford to carry it.”
Castillo voiced similar concerns during the special City Council session last week. This rate increase will not just hit a few census tracts, but all of San Antonio, she said. She was unavailable for additional comments prior to Thursday’s A-session.
Whyte told the San Antonio Report he “does not want any rate increase at all,” adding that he would rather see CPS Energy keep more of its own funds rather than see those dollars go to the city. However, he said he realizes there is not a lot of support for this idea since the utility’s cut to the city makes up a third of its general budget annually.
Because he doubts six councilmembers will vote against the rate increase, Whyte said he plans to propose a compromise motion that sees CPS Energy halving its rate request to 2.125% and “tightening its belt a bit” and cutting its operations and maintenance budget by a percent and a half.
“If you do the math on that, we can get CPS [Energy] the entire $85 million per year that they need for the next two years,” he said. “This should not be on the backs of the citizens, right? So that’s the compromise. I’m trying to see if we can make it happen.”
Still undecided
Still on the fence about which way to vote are Councilwomen Sukh Kaur (D1) and Marina Alderete Gavito (D7).
Kaur told the San Antonio Report the difficulty with this vote is that it pits reliability against affordability.
“I think we’re really facing two big questions,” she said. “The first one is how do we create an energy utility that’s more resilient, and sustainable for the future … and the second one is making sure that we are increasing affordability and not allowing our energy-burdened residents to really feel the increased prices.”
Alderete Gavito said Thursday’s discussions will determine how she votes. She added she has a lot of concerns for residents on fixed incomes, such as the elderly, who are living in her district. However, she said she also is cognizant that CPS Energy needs these funds for the future, and added she is also impressed that CPS Energy has been able to maintain such low rates compared to other utilities around the state and country.
“I definitely feel like there’s a push from CPS Energy’s leadership team and from the city on figuring something out,” she said. “Now, whether that’s going to be before the vote or after the vote, or before the rate increase goes into place — we haven’t nailed down those details.”
Councilman Manny Palaez (D8) declined to comment regarding Thursday’s vote, and the San Antonio Report did not hear back from Councilwoman Phyllis Viagran (D3) or her team before Thursday.
During the special council meeting last week, Viagran proposed the idea of splitting the 4.25% rate increase up across the next two years into smaller rate increases, however, CPS Energy staff seemed reluctant to take this approach.
Politics reporter Andrea Drusch contributed to this report.
CPS Energy is a financial supporter of the San Antonio Report. For a full list of business members, click here.
