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San Antonio residents have seen the headlines. People in Dallas, Houston, and other major Texas cities wracked by power outages during last week’s freeze are now being hit with high power bills, up to more than $16,000 in some cases.
CPS Energy officials have insisted – repeatedly – that’s not going to happen here. That’s because of the utility’s structure as a municipal entity – with rates set by City Council – and its willingness to borrow money to spread out the financial blowback from the disaster over years, officials say.
“We are not going to be pushing exorbitant bills through our system to our customers,” CPS Energy President and CEO Paula Gold-Williams said. “Our customers have already been through a lot.”
Many had hoped the utility would use Monday to reveal the hard numbers behind what Gold-Williams has called the “next tsunami” of costs. With supplies of natural gas and wholesale power tight during the freeze, prices skyrocketed.
But CPS Energy customers will have to wait and see how much of these costs they will ultimately have to bear. Utility officials didn’t reveal any details Monday, saying that they still don’t have a full accounting of all the charges they incurred last week.
“That information is coming but is not going to be available today,” Gold-Williams told reporters. “We will not be giving any total amounts or ranges associated with that fuel cost and power cost.”
More than 100 people signed up to speak at the utility’s teleconference meeting Monday, its first since the crisis that left nearly 400,000 without power for multiple days in temperatures below freezing.
Many shared traumatic experiences of fearing for loved ones with medical devices dependent on electricity, fleeing their homes for hotels or other shelters, and watching hundreds of dollars’ worth of food perish in a powerless refrigerator.
Maria Rodriguez, 57, said she and her 70-year-old brother were left without power for 96 hours. Without power to her refrigerator, she had to leave his insulin outside in the snow, she said.
“There was a time that I was crying when I looked out the window and saw the snow, knowing that my brother’s insulin was out there and should have been in the refrigerator,” Rodriguez said.
Dozens questioned why their bills should go up at all after what some are calling the biggest forced power outage in U.S. history.
Richard Palomo, a retired Navy retiree and former police chief for school districts in Laredo and South San Antonio, said his three grandchildren and 87-year-old father went into “survival mode” after three days without power.
“This never should have happened,” Palomo said. “This happens in underdeveloped countries.”
Little-known fuel adjustment charges at issue
CPS Energy officials say the only reason they haven’t released a cost figure is because they’re still crunching the numbers.
CPS Energy Vice President Cory Kuchinsky told the San Antonio Report that the utility doesn’t have all its invoices yet from natural gas suppliers, some of whom weren’t even able to deliver all the gas their contracts stipulated.
“The cost for this event, we haven’t put it in folks’ bills,” Kuchinsky said. “When we do, we’ll be thoughtful, we’ll share it with our board, and the community will know when it begins and the impacts.”
In a Monday call interview Kuchinsky explained how CPS Energy is temporarily suspending the way it would normally pass on the costs of fuel and other expenses to its customers. The typical approach is to include them in customers’ bills in the form of little-known charges called “adjustment factors.”
CPS Energy charges its customers three different adjustment factors:
- Retail electric fuel adjustment factor (currently $0.02 per kilowatt-hour of electricity for residential customers). This charge recoups the costs of nuclear, coal, and natural gas fuel for electricity generation; purchases of wind, solar, and landfill gas; and for energy efficiency rebates and home solar programs.
- Regulatory adjustment factor (currently $0.01 per kilowatt-hour). This charge is to recoup additional fees and costs related to using the Texas electrical grid, paid to the Electric Reliability Council of Texas (ERCOT) and other, larger electric regulatory entities.
- Resale gas cost adjustment factor (currently $0.04 per hundred cubic feet of natural gas). This charge is how CPS Energy recoups the cost of the natural gas it supplies to for heating and cooking fuel. Sometimes, after a month where natural gas prices drop, it shows up as a credit on a customers’ bill.
Ordinarily, these charges fluctuate on a month-by-month basis in response to changing costs of fuels like coal and natural gas, as well as other factors.
Not this time, though. The cost of natural gas shot so high that CPS Energy doesn’t want pass it on to its customers all at once, Kuchinsky explained.
“We can’t do the normal process,” Kuchinsky said. “That’s going to be just too hard on the customers of San Antonio.”
David Burleson, a San Antonio resident and senior consultant with business software company SAP, called for more transparency about how these fees are calculated during CPS Energy’s public comment period.
“As customers, we need clear access to this calculation and what rates we are currently exposed to,” Burleson said.
CPS Energy board members also said the utility should make its cost projections known as soon as possible.
“We need to understand the full financial impact of this winter storm,” said John Steen, a CPS Energy trustee and former chair, at Monday’s meeting. “As soon as we have the figure on the cost of dealing with this event, we should release this information and be ready with a plan for how we will deal with [it].”
Board Chair Willis Mackey called for an additional public meeting on March 1 to discuss the crisis. The board typically meets the third Monday of each month.
CPS Energy is a financial supporter of the San Antonio Report. For a full list of business members, click here.
