It’s no secret that CPS Energy will soon ask San Antonio City Council for a rate increase. It’s not lost on the council or on CPS Energy leadership that an increase will be a hard pill for ratepayers to swallow. That’s the problem with a municipally owned utility; there’s no way to paint this other than self-inflicted pain. But it doesn’t have to be.
Our community can take bold action to champion its own future by rethinking the way CPS Energy and the City of San Antonio share their resources. I propose a powerful change that lets CPS Energy keep more of its revenue while promising to not increase rates. I will ask my colleagues on City Council to decrease the 14% draw from CPS to 11% for a period of five years.
The business-as-usual model is that CPS Energy shares 14% of its revenue with the city, with the money going directly into the general fund to pay for everything from police and fire to street maintenance and libraries. The city’s proposed $3.8 billion fiscal year 2024 budget is balanced thanks in large part to the utility’s largesse, if you want to call it that. You can also call it the cost of doing business.
We’ve grown accustomed to the model, and that’s a problem.
CPS Energy is, by far, our city’s strongest economic driver, a national innovation leader in energy generation, a job generator and the envy of many cities across the United States. That part of the model is fantastic. Our budgetary dependency on CPS Energy‘s 14% contribution is also a good thing. Our city’s consistent services and excellent bond rating are a direct consequence of this setup.
But the best part of owning a utility is also the most complicated — we are the masters of our own fate, with limits. The rate increase, we’re told, is needed to cover increased costs. But there are variables. We must learn to live with extreme weather patterns, an inconsistent ERCOT power grid and an understandable demand to be ready for the next emergency. Last week alone ERCOT called on everyone in the state to reduce their power usage four days in a row.
This is where business-as-usual falls short. But it’s also an opportunity for San Antonio to flex its unique freedom to be self-sufficient.
We have the tools to navigate financial hurdles and face the demands of changing weather patterns, but we need a different way to use them. That’s why I propose to decrease the 14% draw to 11% for a period of five years. CPS Energy will use the yearly 3% savings to check off their readiness to-do list: diversify our energy sources, improve the energy infrastructure, plan for the next winter storm and repeating heat waves and support ERCOT, as opposed to being at the mercy of the grid’s whims. In exchange, CPS Energy will forgo the looming rate increase. This will save citizens and businesses the burden of those extra costs.
The obvious question is whether the city will have to decrease existing services over this period. Here’s the thing: CPS Energy posted a revenue surplus last year and anticipates more surpluses with increased usage due to extreme heat and colder winters. Yes, we will have to be very careful in how we increase existing services or add new ones. But given the surplus projections, the effect on the city’s operations will be negligible. On the upside, the decisive move I propose will have multiple benefits.
It will ensure diversified energy resources, improve our energy infrastructure, solidify planning for winter storms and heatwaves, support the state’s energy grid and send a message to Wall Street that San Antonio is serious about protecting its assets. Most importantly, it will offer an alternative to a rate increase.
Or we can continue with business as usual with a rate increase and a to-do list long on need and short on time and resources to get it done.
I’m willing to bet on change.
