With San Antonio in the grips of its hottest summer on record, CPS Energy customers’ bills are up roughly 30% year over year, the utility’s interim CEO Rudy Garza said Monday.

But customers shouldn’t blame CPS Energy or its recent rate increase for their costlier bills, Mayor Ron Nirenberg said during the utility’s monthly board meeting. Instead, the mayor said San Antonians and Texans should be looking at gas suppliers.

“The people who are getting rich are the ones running those gas plants and selling the natural gas on the market,” Nirenberg said. “That’s who’s getting rich. The revenue that’s coming to CPS [Energy] is going right back into the wires and the generators, and for us not clarify that — it’s a disservice to not only this company but to our neighbors.”

Garza said bills are also higher due to the extreme heat wave San Antonio is facing and the increased energy customers are utilizing to keep cool. Since May, San Antonio has had over 41 days above 100 degrees and has set 11 heat-related records, he said.

Gas prices have been extremely high over the past five months, pushing CPS Energy customers’ bills up as well, Nirenberg said. While about 4% of customers’ higher bills can be attributed to the rate increase enacted in March, the mayor implied opportunistic price gouging elsewhere is what’s costing local ratepayers.

Nirenberg said that with a legislative session coming up in 2023, state lawmakers will have another opportunity to fix the state’s grid issues, and suggested that should include gas price regulations.

Under-regulated gas prices are what left CPS Energy and other utilities around the state on the hook for billions of dollars in the wake of Winter Storm Uri in February 2021.

With gas suppliers allowed to charge up to $9,000 per megawatt hour for roughly 72 hours after the storm, the utility racked up a $1 billion bill in fuel charges.

CPS Energy has settled several lawsuits it filed against gas suppliers, but the utility — and its customers — are still on the hook for at least $418 million, which is being paid back over 25 years through a fee of $1.26 on monthly bills. That fee is likely to rise as the final lawsuits are settled.

The mayor’s comments come at a time when CPS Energy is looking to replace roughly 3,000 megawatts of generation by 2030 once CPS Energy shutters its Spruce 1 coal unit, and retires its Braunig and Sommers natural gas units.

However, the utility is planning to replace some of those lost megawatts with more natural gas units, by converting its Spruce 2 coal unit to natural gas by 2028, and by adding 500 megawatts of “firming capacity” — likely more natural gas — to the utility’s power generation mix over the next 20 years.

Doing so means leaving the utility and its customers susceptible to price swings in the natural gas market.

At this time, the utility’s Rate Advisory Committee and Citizens Advisory Committee are in discussions about what CPS Energy’s future portfolio mix could look like. Through its FlexPower Bundle program, the utility has increased its reliance on renewables, and will reduce its natural gas use from 46% of its overall mix to 38% by 2025, yet it’s unclear how CPS Energy will add additional capacity to meet the community’s growing needs.

A forecast of future energy generation needs show a 27% need through additional resources by 2030.
A forecast of future energy generation shows a 27% need through additional resources by 2030. Credit: Courtesy / CPS Energy

Garza said more natural gas can’t be ruled out.

“What I need is the capacity to keep the lights on,” Garza said. “Reliability is number one and once I have reliability, then I can maximize the diversity of resources in the most affordable manner.”

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