As its number of customers continues to grow, CPS Energy officials will weigh whether to increase customers’ electric and gas rates in its next fiscal year.
The municipally owned utility’s board will vote Monday on a $2.66 billion budget with no rate increases for its current fiscal year.
In a Friday briefing with reporters, President and CEO Paula Gold-Williams said utility officials were at one point considering a 4.3 percent rate increase for this year but decided against it. She raised the possibility of rate hikes in the fiscal year that begins February 2019 and ends in January 2020.
“We could be in a rate case right now,” she said. “What changed my mind is, at the same time, we have groups that continue to look for opportunities to reduce costs. …We said, ‘OK, let’s go one more year [without an increase] for sure.’”
A rate increase in 2019 is by no means a sure thing. Gold-Williams would not give an estimate on how much of an increase utility officials might ask for, saying that they will not begin formally drafting next fiscal year’s budget until late summer or early fall.
“What I can tell everyone is that we’ll apply a tremendous amount of effort again to be able to defer a request,” she said. “But at the same time, if I find that we’ve done all we can do to make sure we don’t slow the city down, [and] we need an increase, our commitment is to come forward, have a good discussion, explain it to the greatest degree.”
Any rate increase for the utility serving more than 812,000 electric and 344,000 gas customers would have to be approved by San Antonio City Council, which most recently voted in favor of them in 2013.
At the time, former CPS Energy President and CEO Doyle Beneby said those increases were for upgrades to the city’s power grid, automated meters, and power plant upgrades.
Revenues from CPS Energy make up roughly 30 percent of the city’s budget, with the utility planning to contribute $346 million this fiscal year.
CPS Energy has managed to stave off raising bills longer than San Antonio’s other municipal utility, the San Antonio Water System, which has asked for rate increases every year since at least 2011.
CPS Energy’s residential customers now pay 6.9 cents per kilowatt-hour, plus an $8.75 service charge. In the high-demand months of June through September, CPS Energy adds an extra roughly 2 cents per kilowatt-hour for residential customers whose use exceed 600 kilowatt-hours.
Commercial users pay the same $8.75 monthly charge, plus 7.2 cents per kilowatt-hour for the first 1,600 kilowatt-hours, then the rate drops to 3.3 cents per kilowatt-hour for additional use.
For commercial users, the utility adds a 2-cent charge in June through September and a 1-cent charge during the rest of the year for use over 600 kilowatt-hours.
Gas rates are 49 cents per 100 cubic feet, plus a monthly service charge of $9.55, for residential and commercial customers.
Gold-Williams said higher rates will eventually be needed to generate sufficient cash flow to make payments on debt CPS Energy has incurred to maintain and expand its power plants, renewable generation, large transmission lines and substations, and smaller distribution poles and lines.
“In a growing community, eventually you get to the point where you have enough growth requirements and you continue to squeeze as much cost as you can, and you figure out if you need rate support,” she said.