CPS Energy assures customers that even if they are behind on payment they will not face service disconnection.
CPS Energy assures customers that even if they are behind on payment they will not face service disconnection during this week's approaching cold snap. Credit: Bonnie Arbittier / San Antonio Report

With the winter’s first major cold snap expected to move into San Antonio early this weekend, CPS Energy is assuring residents behind on payments they will not be disconnected during any bouts of extreme winter weather — despite the utility’s growing financial concerns.

As of the end of October, CPS Energy was owed roughly $207.5 million from past-due customers, utility officials said during CPS Energy’s monthly board of trustees meeting Monday — a total that has continued to grow from the $128.3 million in outstanding balances CPS Energy was owed in April due to this summer’s intense heat.

Still, the municipally owned utility said it would follow its usual holiday custom and halt disconnections the Friday before and the Monday after Christmas in recognition of the holiday, CPS Energy spokeswoman Christine Patmon said. It will also hold off on disconnections due to a cold front expected to bring below-freezing temperatures, President and CEO Rudy Garza told trustees.

“We will likely stop disconnects on Thursday, and we’ll resume them again probably on the 27th after Christmas, assuming the temperatures come back up,” Garza said. “These are the times where, because of safety reasons, we do stop disconnecting.”

Following the pandemic and extreme bouts of heat this summer, about 20% of the utility’s customers fell at least 30 days behind on their bills, Executive Vice President of Customer Strategy Deana Hardwick said. CPS Energy completed roughly 12,000 disconnections in October, Hardwick noted, adding that the utility is doing everything it can to avoid cutting off customers. CPS Energy representatives make phone calls, leave door hangers, and even knock on doors knockers to help customers outside CPS Energy’s office hours, she said.

The biggest concern with the persistent debt is that it risks the utility’s good credit ratings, said Chad Hoopingarner, the utility’s vice president of financial planning. CPS Energy is regularly assessed by the three major credit rating agencies, which measure the risk associated with lending to an entity such as CPS Energy. These ratings help determine interest rates on the utility’s debt. 

“When we issue debt at a higher interest rate, that gets built into the budget and customers’ rates go up,” Hoopingarner explained.

Utility officials expressed confidence that they will be able to get a handle on CPS Energy’s finances before the end of the utility’s fiscal year, which ends in January. Hoopingarner said the credit rating agencies aren’t going to be surprised by any of the utility’s metrics.

“What they’re hearing from us is not new — they’re hearing it from every utility across the country,” he said.

The utility’s staff also assured their board of trustees it is prepared for the below-average temperatures expected this weekend and for the above-average energy demand that may result from it. CPS Energy staff has winterized its plants to withstand zero-degree temperatures and gusts of wind up to 30 miles per hour, said Benny Ethridge, the utility’s executive vice president of energy supply.

It’s been almost two years since Texas faced the icy wrath of Winter Storm Uri, which left millions across the state without power for days and resulted in the death of hundreds of Texans. While the cold front is expected to plunge Texas into the deep freeze, precipitation in Central Texas isn’t expected.

Following Monday’s board meeting, Ethridge told reporters the utility is running on a 27% reserve margin — meaning it has the ability to provide much more energy than the expected demand is for this weekend’s weather.

“I’m not worried; we have done so much work and we’ve upgraded our systems and everybody’s been focused,” Ethridge said. “I think the team has done a good job preparing, and now we just do what we prepared to do.”

The utility’s in-house meteorologist Brian Alonzo said this week’s cold front will bring in a “dry cold” — while the air will be chilly, no snow, sleet or rain is expected to come with it. While temperatures starting Thursday night are expected to drop below freezing through early Monday morning, they rise above freezing during the day, Alonzo noted. Winds are expected to be between 20 to 30 miles per hour, he said.

Garza expressed confidence in both the Texas grid and in the utility’s ability to provide electricity during the cold snap.

“At the state level, we are expected to have plenty of resources for this particular event,” he said. “But, again, I wanted to cover this to ensure that you all know that we’ve done what we need to do to be ready.”

CPS Energy is a financial supporter of the San Antonio Report. For a full list of business member, click here.

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Lindsey Carnett

Lindsey Carnett covers the environment, science and utilities for the San Antonio Report.