While San Antonians have certainly noticed gas prices at the pump have skyrocketed, that’s not the only place their wallets are taking a hit.

The average residential electric and gas bill has spiked roughly 22% from March 2021 to March 2022, according to CPS Energy officials.

While about 4% of that is attributable to the rate increase that took effect last month, the rest is coming from “fuel cost increases,” wrote Chief Financial Officer Cory Kuchinsky in a letter to the board of trustees last week.

“The cost of generating electricity has increased by ~16% since this time last year, and
the retail cost of natural gas fuel has increased by ~70% over the same period,” he wrote.

In his letter and during the city council’s monthly utilities committee meeting Tuesday, Kuchinsky said the utility is doing everything in its power to “dampen the impacts of the market,” and that its residential bills remain “among the lowest in Texas.”

CPS Energy both supplies and uses natural gas. It supplies natural gas to customers who use it for cooking, heating water or powering their dryer. It uses natural gas to generate electricity at its gas-fired power plants, Braunig and Sommers. While CPS Energy plans to close these plants by 2026, it is considering converting its coal-powered Spruce 2 unit to a natural gas-fired unit by 2030.

The utility has worked to guard customers against the effects of rising natural gas prices, Kuchinsky told council members, by using budgeting safeguards such as financial hedging, long-term pre-pay contracts and natural gas storage.

Those are some of the ways the utility has limited the increase customers are seeing on their bills from the full 70% increase in the retail cost of natural gas, he said. A diversified fuel strategy that has made CPS Energy less reliant on natural gas has also helped, Kuchinsky noted in his letter.

But despite those efforts, “the rising cost of natural gas is having an unavoidable impact on customers’ bills,” Kuchinsky wrote.

An example of a cost increase for a combined residential electric & gas bill from March 2021 to Mach 2022
Utility officials say about 4% of the increase in residential gas and electric bills are from the recent rate increase and fuel costs from Winter Storm Uri; the rest can be attributed to higher natural gas costs. Credit: Courtesy / CPS Energy

The increase can be seen in the fuel adjustment charge on customers’ bills. That charge reflects natural gas fuel and transport costs, generated power costs, renewable power costs, market power purchases and CPS Energy’s energy efficiency and conservation program, all in one line item.

International events, mainly Russia’s invasion of Ukraine and Western European nations seeking other sources of natural gas, are the main driver in rising gas costs, Kevin Pollo, CPS Energy’s vice president of energy supply and market operations, told the committee Tuesday. Demand for natural gas has grown faster than the supply.

Customers interested in blunting the effects of higher prices can dial down their use of natural gas, and use CPS Energy’s My Energy Portal to see in near-real time what their electric and gas use per day is, CPS Energy spokeswoman Christine Patmon said.

Councilman Mario Bravo (D1) said he’d like to see the city-owned utility move past its “love affair with natural gas,” but interim CEO Rudy Garza said it’s too reliable a power source for CPS Energy to abandon just yet.

“We’ve got to have some backup capacity that we control,” Garza replied; the benefit of natural gas capacity is “you can ramp it up and down. So we’ll take the maximum renewables we can get — and when [the sun or wind] is not there, we can ramp it up to ensure our customers’ lights stay on.”

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

Lindsey Carnett

Lindsey Carnett is the Science & Utilities reporter for the San Antonio Report.