At least six members of the San Antonio City Council told the San Antonio Report last week they’re leaning toward approving CPS Energy’s request to raise residential rates on Thursday, the minimum number needed to pass.
But a majority of that support appears soft; some council members said they’d like to see specific changes from the city-owned utility in exchange for their yes votes.
Presuming CPS Energy’s board of trustees approves the utility’s request for a 3.85% base rate increase and the creation of a regulatory asset to pay off roughly $418 million in fuel costs from Winter Storm Uri on Monday, the vote moves to the City Council.
If approved, customers with an average bill of $150 will see an additional $5.10 added to their bills starting in March — $3.84 to the base cost, plus $1.26 in pass-through fees.
The San Antonio Report reached out to all 10 council members and Mayor Ron Nirenberg, who also sits on the utility’s board, and so will vote on the increase twice. Only he and Councilman John Courage (D9) expressed strong support for the increase.
“It’s a reasonable request and a dramatic improvement from where this process started,” Nirenberg said in a statement. “It has been eight years since the last rate increase, and CPS Energy leadership has done what we have asked and narrowed the request to basic operations, maintenance and weatherization. They have done their proper due diligence on this request.”
As the chair of the Municipal Utilities Committee, created in the wake of February’s winter storm to provide the city council with more oversight of San Antonio’s two city-owned utilities, Courage said he strongly supports a rate increase because of the extraordinary circumstances CPS Energy dealt with last year.
That includes having to shut down power to much of the city per the state grid operator’s request during Uri, fighting in court against hundreds of millions of what the utility says are illegal charges relating to the storm and paying back the legitimate charges.
Two of the likely supporters, Phyllis Viagran (D3) and Adriana Rocha-Garcia (D4), said they still feel on the fence about it, while the other two, Mario Bravo (D1) and Melissa Cabello Havrda (D6) said they will support approval only if certain conditions are met. Rocha-Garcia, Bravo and Havrda sit on the utilities committee with Courage.
After sitting through six hours worth of briefings last month on the need for a rate increase presented by CPS Energy and city staff, Viagran said while she will likely support this rate increase, she would like CPS Energy to consider restructuring its rates before asking for another increase.
Utility officials have said they will almost certainly have to return to the council in the next two years for an additional increase, as the 3.85% will only address immediate needs, such as bolstering its shrinking workforce and updating its decades-old resource management software.
Bravo said he’s spoken with CPS Energy’s interim CEO Rudy Garza and has been reaching out to the utility’s trustees about instigating an independent study by a third party into CPS Energy’s affairs. He said he will be supportive of the rate request only if CPS Energy is open to this study.
“I think that clearly there are some culture issues at CPS Energy and if we don’t get those fixed, we won’t be able to retain and attract new talent,” Bravo said. “We all need for CPS Energy to be successful; I want the utility’s business model to be evolving — we need to be on the leading edge, we don’t want to be lagging.”
Havrda, too, said she’d like to see more information; on Friday afternoon she posted a press release stating she has formally sent a request to Garza and the utility’s trustees, requesting it conduct a “third-party audit” that examines the organization’s finances and management practices, adding that she is leaning toward voting in favor of the increase.
Standing solitary in strong opposition is Jalen McKee-Rodriguez (D2). Rodriguez told the San Antonio Report he cannot support asking his constituents to pay more when they are struggling financially, and that he feels CPS Energy’s public outreach efforts have not been sufficient.
“While I understand the nuance of the vote, I think there’s a real conversation to be had if the request is not approved,” Rodriguez said.
Teri Castillo (D5) also said she is leaning toward voting against the requests. Residents throughout the city have been feeling the burden of increasing property taxes, the pandemic and Winter Storm Uri, Castillo said, so it feels like a bad time to request money from ratepayers.
Council members Ana Sandoval (D7), Manny Pelaez (D8) and Clayton Perry (D10) told the Report they’re unsure how they’ll vote.
All three said they are still collecting constituent input, either through upcoming town halls or via other avenues such as email, phone and/or social media.
CPS Energy knows this is a difficult time to ask for a rate increase, spokeswoman Christine Patmon said, which is why it is continuing to hold outreach events and assistance fairs.
Should the council not approve the requests, CPS Energy will “have some hard decisions to make on what services do not take priority moving forward,” she said, although winterizing its coal and natural gas plants — about $31 million of the requested increase — is now a regulatory requirement, so that work will get done regardless.
There would be less money, however, for “tree trimming and other initiatives that help with reliability,” Patmon said. “Other impacts could include longer customer service wait times and longer outage durations due to inadequate skilled staffing.”