All eyes are on the Nov. 3 general election, and rightly so, as nearly 200,000 voters in Bexar County cast votes in the first week of early voting. But a critical challenge to the future governance of CPS Energy looms large and merits our undivided attention now, long before the May 2021 City election.
A Recall CPS petition drive launched in August by the Save Our Power Political Action Committee likely will achieve its goal of 20,000 qualified signatures needed to seek significant change to the San Antonio City charter. Organizers want voters to approve a charter amendment that would eliminate the municipally owned electric and gas utility’s five-person governing board and make CPS Energy a City-managed enterprise.
Read this August article by Senior Reporter Brendan Gibbons for more detail on the petition drive and its coalition of backers.
The same ballot initiative, if passed, would require CPS Energy to eliminate coal, which now accounts for 18 percent of the utility’s energy-generating portfolio, by 2030 and all fossil fuel use by 2040.
In the memorable and somewhat chilling words of the Sierra Club’s Darby Riley, who is said to have authored the petition language, activists seek to “decapitate” the utility’s leadership structure. The petition drive comes after months of unsuccessful talks between multiple grassroots groups and CPS Energy management.
There are multiple dimensions to the standoff between those pushing the petition and CPS Energy officials, who are garnering the support of City leaders and the business community. Such backing, while important, is probably irrelevant in a petition drive. Ratepayers might be smart not to pick sides just yet, while studying the underlying issues and considering the possibility still of renewed negotiations rather than an election day showdown.
The risk vs. reward equation here is significant. Unintended consequences often result in such showdowns. One only has to look back a few years to the prolonged standoff between the City and the firefighters union to see how union officials used petition drives to hijack City Council authority in setting compensation for the city manager even as they failed to limit the council’s ordinance-making power.
Friday’s news that Fitch Ratings, one of the three major national bond rating agencies, had downgraded its outlook for CPS Energy should give all sides pause. For all its faults, real and perceived, CPS Energy is the nation’s largest municipally owned energy utility, recognized for its record of reliability and stable rates. It has been six years since ratepayers have faced a rate increase, although utility officials will ask City Council to approve one in 2021.
The AAA financial performance of CPS Energy is key to the City, which receives nearly one-third of its operating budget from the profitable utility. This year that contribution is expected to exceed $325 million, even as CPS Energy and SAWS both struggle with multimillion-dollar revenue shortfalls resulting from tens of thousands of residential and commercial customers who have ceased payment amid the coronavirus pandemic.
Neither utility is cutting off service to those customers, but how long they can continue to absorb such losses will be a serious issue come 2021.
CPS Energy officials believe that the utility’s Flexible Path plan prudently balances the need to move from carbon-generated power to clean renewables in the coming decades. Activists disagree and want to accelerate the closure of fossil fuel plants.
The CPS Energy board is made up of representatives from four quadrants of the city and the mayor. The board selects its own trustees whenever vacancies occur, which critics see as a backroom legacy that leaves the board unaccountable to ratepayers. Supporters see the board as free of politically appointed individuals. A CPS Energy spokesperson correctly pointed out that the application process is open to the public and that City Council votes on the nominees, but that doesn’t negate the insider tradition of trustee selection.
Activists and the media have been frustrated with CPS Energy for using state law to limit public access to its inner workings, including any existing calculations of how rates and the utility’s financial profile would be affected by earlier closure of the fossil fuel plants.
Petition drives are no-confidence votes in local government and leadership. They put power directly in the hands of voters, but not necessarily in a way that reflects the nuances and complexities of governance. There is no room for compromise in a yes or no ballot vote. San Antonio’s leaders and activists can avoid the possibility of a serious self-inflicted wound that could negatively impact the community for decades by finding their way back to the negotiating table now before it is too late.
An earlier version of this column incorrectly stated that the mayor does not have a vote on the CPS Energy board. The mayor holds the ex officio seat and does have a vote.
CPS Energy is a financial supporter of the San Antonio Report. For a full list of business members, click here.