With disconnections resuming for thousands of CPS Energy customers Friday, the utility said it will stick to its plans, despite appeals from some City Council members that the electric utility consider adopting San Antonio Water System’s approach.
Members of the city’s new Municipal Utilities Committee learned Wednesday that SAWS’ relief plan, by automatically enrolling delinquent residential customers with low balances into a payment plan, allowed the water utility to remove roughly 46,000 customers from the threat of imminent disconnection.
Council members asked CPS Energy to consider implementing a similar plan, and a utility representative said he would take their request to CPS Energy’s board of trustees.
But on Friday, CPS Energy President and CEO Paula Gold-Williams told the San Antonio Report Friday that while CPS Energy respects the council members’ input, the utility will stay focused on its current trajectory.
“We’re going to continue to look at all the comments that they have made and to make adjustments along the way,” Gold-Williams said, “but the [outreach] program that we have currently is just getting started.”
That outreach has included mail inserts, phone calls, assistance events, and helping customers receive city, county, state, and federal aid. Thus far CPS Energy has connected customers with $38 million in assistance since last June.
About 76,000 CPS Energy customers, 72,000 of which are residential, are eligible for disconnection. Roughly 7,000 of these customers were slated to face disconnections on Friday, officials said earlier this week. The utility is owed at least $93 million from customers who stopped paying their bills during the pandemic.
“We have always known that this day would come,” Gold-Williams said. “But our goal from the very beginning was to help.”
Faced with the actual process of disconnection may be what it takes to get some customers to pay or make a payment plan with the utility, said Rudy Garza, the utility’s chief customer engagement officer, who told the council committee Wednesday that most of CPS Energy’s large commercial customers, once faced with disconnection last month, settled their bills straight away.
CPS Energy is not doing auto-enrollments like SAWS because “we think that personal touch is important, it’s important to us, it’s important to our ‘people first’ values,” Gold-Williams said.
Comparing the two municipally-owned utilities is like comparing apples and oranges, said Garza.
CPS Energy and SAWS have different rate structures and function under different business models, Gold-Williams said. Gold-Williams said if SAWS’ COVID-19 relief plan works for its customers, she’s glad to hear it, but CPS Energy is striving to do what works best for its own customers.
The other aspect of SAWS’ relief plan that council members asked CPS Energy to consider is its $41.2 million reserve, which water officials say they will tap to help pay down customer debt. That money came from within SAWS existing budget.
But the two utilities are in two very different financial situations, said CPS Energy’s Chief Financial Officer Cory Kuchinsky. SAWS’ regular rate increases in recent years have given the water utility a bigger cushion to absorb losses from customers not paying their bills, Kuchinsky said. SAWS approved rate hikes of 5.8% in 2018 and 4.7% in 2019.
CPS Energy’s finances have grown dire in the wake of the pandemic and the winter storm. Without a rate increase this year, CPS Energy can expect an $81.9 million loss next fiscal year. A 10% rate increase, which the utility is currently discussing, would generate about $76 million.
Earlier this week Gold-Williams suggested that CPS Energy perhaps should have followed SAWS lead in requesting smaller rate increases more often. CPS Energy has not raised rates since 2014.
“If we had done 2%, 3% every other year, we may not be here,” she told reporters Monday prior to CPS Energy’s monthly board meeting.
CPS Energy is not directly eligible for federal American Rescue Plan Act money, because it is owned by the city of San Antonio and not a stand-alone government entity. There are also rules prohibiting the use of ARPA funds for the forgiveness of public debt. Still, CPS Energy officials said they’re in discussions with the city to see how it might help its customers with some of that funding.
CPS Energy is a financial supporter of the San Antonio Report. For a full list of business members, click here.