Members of the San Antonio City Council tried to save themselves from another dramatic fight over how to spend excess CPS Energy revenue. But it didn’t work.
The city-owned utility company returns revenue to the city like a private company would to its shareholders — something that’s been a boon to city coffers in recent years as the company sells more of its energy onto the grid for a profit.
But after two years of scrapping over how to spend the unpredictable windfall its created for the city budget, members agreed in April to a plan that would direct most of that money toward helping the utility company stave off rate increases for its customers.
“The spectacle of us playing Hungry Hungry Hippos… I think that’s a bad way of creating policy,” Councilman Manny Pelaez (D8) characterized past windfall debates at the time.
On Tuesday, however, Pandora’s box reopened. At council members’ request, Chief Financial Officer Ben Gorzell presented what it might look like if the council reversed course and used some of that money to fill a projected hole in the 2026 budget.
“We didn’t recommend it or propose it because… there was a lot of conversation about needing to send dollars back to CPS to help with the future rate increases,” Gorzell told the council at a budget work session. “But an option for you to consider would be that we hold [money back].”
San Antonio faces a deficit this year and budget writers have already made cuts to get the council to a balanced 2025 budget that they’re expected to approve at Thursday’s meeting.
Against that backdrop, however, there’s been far less money for the budget amendments council members typically use to fund projects of personal interest, like last year’s reproductive health fund and community spay/neuter clinics.
This year’s more modest wish list including money to support a pediatric dental clinic, housing assistance for people on the verge of eviction and funding for the embattled San Antonio Philharmonic, among other ideas that totaled about $23 million over two years.
After the initial requests were made in Tuesday’s meeting, Councilman John Courage (D9) addressed the obvious elephant in the room.
“I support everything that everybody has said,” said Courage, who is running for mayor in 2025. “But I have to ask … how are we going to pay for this stuff?”
He and other council members quickly began backtracking on the April plan, and urged the city’s budget writers to dig deeper into the previously earmarked CPS Energy revenue than Gorzell’s initial projection.
“Conditions have changed,” said Councilwoman Teri Castillo (D5). “When we talk about a deficit… it’s somewhat of a manufactured deficit, because we’re returning money that typically would go to the city’s coffers.”
Councilwoman Phyllis Viagran (D3) suggested the city’s off-system CPS Energy revenue was never going to be enough to stave off a rate increase, and should instead be used to “invest in what we feel is the most pressing on our budget amendments, and then use the rest to see to address our shortfall coming in 2026.”
In Wednesday’s budget meeting Courage confirmed with staff that the council could indeed use the money in this year’s budget, if members voted to fund amendments that way from the dais at tomorrow’s council meeting.
While several members opposed the idea, Mayor Ron Nirenberg offered the sternest rebuke, noting that CPS Energy bills “fall hardest on those who are lower income.”
“If our revenue continues to shift more towards CPS revenues to do basic services and less from property tax, we are pushing more of the burden to do basic services onto lower income residents,” he said. “If we stick to policy that will help mitigate rates, it won’t make rate increases go away, but it will help slow them down.”
Clarification: This story has been updated to reflect that reversing course on CPS revenue spending was suggested by council members.
