CPS Energy may write off as much as $42.7 million of the $175.5 million it is owed from past-due accounts, utility officials said Monday during a board meeting.
Utility officials informed the board about the potential write-off earlier this month while discussing the 4.25% rate increase that City Council approved Dec. 7.
CPS officials characterized 42,000 delinquent accounts as ones that have been disconnected and would need to be written off because payment is likely not recoverable.
About half of the $175.5 million, roughly $83.1 million, is expected to eventually be paid by delinquent customers who have been put onto payment plans, said Chad Hoopingarner, CPS Energy’s vice president of financial planning.
He said the utility is working to get another 92,000 past-due accounts, which collectively owe about $49.7 million, onto payment plans. Those are customers at risk for disconnection, he said.
“They’ll either be put on an installment plan,” Hoopingarner said, “or they’ll be disconnected and written off and pursued” for payment after the utility refers them to an external collections agency.
Trustee John Steen, who has previously expressed concerns about the number of delinquent accounts, again pointed out that San Antonio residents are struggling to pay their energy bills. He asked the board and utility staff if they were familiar with a comparison chart referenced throughout the rate case by Councilman Marc Whyte (D10), which purportedly shows San Antonio is one of the most expensive cities in Texas for energy burden when wages are taken into account.
The utility has used a different chart showing it has one of the smallest average monthly bills among the state’s largest cities. Steen said Monday he would like to see the comparison Whyte referenced, to which CPS Energy President and CEO Rudy Garza responded, “So would I,” adding he’s never seen it despite asking Whyte’s staff for it.
Mayor Ron Nirenberg, a trustee in his official capacity, said a discussion of the burden of energy costs is more suited for the City Council.
“Unfortunately, I wish we could control the energy cost burden simply with the price that we charge for energy, but if that impairs our ability to continue to provide reliable electricity, then what’s the point?” he said.
CPS Energy’s rate increase, which will take effect next year, is expected to generate $85 million in revenue, money the utility said it plans to use for improving and building new electricity and gas infrastructure, hiring employees and replacing its 25-year-old computer system.
Garza said that not all of the customers who are behind are delinquent due to the pandemic.
CPS Energy has seen the number of customers who have fallen behind on paying their bills swell significantly over the last four years, first as a result of the pandemic and then by persistent inflation. Before the pandemic, CPS Energy had about 15,000 accounts that were consistently past due, totaling about $5 million, said Chief Customer Strategy Officer DeAnna Hardwick.
Even with the continuing issue of past-due accounts, utility officials stressed that CPS Energy is in a strong financial position, noting it has gained roughly $130 million in wholesale revenue from selling power to other users within the Texas energy market this year.
“Overall financial performance is above plan due to stronger wholesale revenue, higher than forecasted electric sales, lower fuel prices, and higher investment income,” the utility stated in its presentation to the board.
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