Set to hear a budget proposal that suggests crediting customers back for a massive windfall at the city-owned energy utility this year, San Antonio City Council members arrived at Thursday’s meeting with a variety of plans for other ways of spending the roughly $75 million.

City Manager Erik Walsh presented the proposal for the city’s share of CPS Energy’s unexpectedly high revenue — a plan supported by Mayor Ron Nirenberg — as part of the City Council’s first look at a 526-page, $3.4 billion fiscal year 2023 budget.

Before he got the chance to deliver that presentation, however, Councilman Mario Bravo (D1) had distributed a counterproposal to reporters Wednesday evening, suggesting the money should instead be used to plant trees, convert local buildings to community resiliency centers, and invest in residential weatherization and energy efficiency upgrades.

“These investments will help our residents by protecting them from future energy bill shock and the detrimental effects of severe weather in what is rapidly becoming our new normal,” Bravo’s proposal stated.

CPS Energy returns 14% of its gross revenues to the city every year directly to the city’s general fund. With record heat this summer, that revenue was far higher than expected, about $436 million instead of the projected $361.2 million.

Bravo wasn’t the only council member pitching plans for how the city’s CPS Energy revenue could be used to help prevent higher energy bills in the future.

Councilwoman Ana Sandoval (D7) presented colleagues with a plan calling for using the portion of the city’s funding that comes from CPS Energy’s energy efficiency and conservation program, known as STEP, to create a two-year pilot program for a resiliency, energy efficiency and sustainability fund.

Doing so, she said, would help San Antonio mitigate the effects of hotter summers and allow the city to obtain federal funding for climate action and resiliency.

“Saying that we’re not going to keep that excess revenue for ourselves is reasonable and it is respectful of the ratepayers, but I do think we need the additional discussion,” said Sandoval, who noted her plan would pull money from a different funding source and therefore would not preclude Bravo or Walsh’s proposals.

Record heat this summer brought CPS Energy a surplus of cash, and City Council members disagree on how to spend the roughly $75 million.
Record heat this summer brought CPS Energy a surplus of cash to contribute to city coffers, and City Council members disagree on how to spend the roughly $75 million. Credit: Nick Wagner / San Antonio Report

The city’s proposed budget was crafted by Walsh and city staff in accordance with broad priorities laid out by City Council, which must approve the final version by Sept. 15. The new fiscal year begins Oct. 1.

The budget calls for using $45 million of the $75 million surplus CPS Energy funds to credit customers on their October bills, while another $5 million would be set aside as an injection into CPS Energy’s Residential Energy Assistance Program. Another $25 million would go toward existing city projects.

“I’m an advocate for targeting the root of our problems, so I believe, in this case, it means investing in climate and sustainability,” Councilman Jalen McKee-Rodriguez (D2) said of the CPS Energy revenue.

“If it was direct relief where folks got to choose where it goes, I’d be more sold, but this is just a credit and it’s going to ensure that CPS bills get paid,” McKee-Rodriguez said.

The bill credit would apply to all CPS Energy customers, even those behind on their payments.

In unveiling the proposed 2023 spending plan to City Council on Thursday, Walsh set a deadline of Sept. 1 for council members to approve that piece of the budget proposal, in order to give CPS Energy time to get the credit on October bills. If it fails to garner support, city staff will begin considering other options.

“It’s going to be hard to go against giving back the funds to our ratepayers,” said Councilwoman Melissa Cabello Havrda (D6), who was among the members pushing to use the funds for more long-term solutions on lowering energy costs and increasing energy resilience.

Other members of the council abandoned a climate focus altogether.

“I’m not beholden to this idea that a $50 million surplus from utility bills needs to be spent on climate change,” said Councilman Manny Pelaez (D8).

“I would like to see that money spent on domestic violence,” he added, laying out plans to parcel out the money between housing for victims that move out of shelters and counselors, among other things.

Just one member threw vocal support behind Walsh’s plan Thursday.

“People are lining up, asking what can we do with that $75 million?” said Councilman Clayton Perry (D10). “I’m 100% for giving that back to the customers.”

But Perry is also working on a backup plan with Councilwoman Adriana Rocha Garcia (D4) in case Walsh’s proposal fails to gain enough support.

“If there’s extra money … my residents always say their priorities are mostly sidewalks [and] streets drainage,” Rocha Garcia said, who added later that she also support’s Walsh’s initial proposal.

Perry and Rocha Garcia’s plan, distributed late Thursday afternoon, would divide $50 million in CPS Energy revenue across the city’s $154 million budget for infrastructure maintenance. The majority of the money, $20 million, would go to street maintenance, while another $10 million would go to sidewalks and $5 million would go to alley maintenance.

Speaking to reporters after the meeting, Walsh was joined by Nirenberg, who gave his unwavering support to the original plan.

“Could we find reasonable things to do with additional revenues, specific to what we’ve been experiencing with the heat wave? Absolutely,” said Nirenberg. “But there has to be a balance, and that’s why I think the recommendation is sound.”

Reporter Lindsey Carnett contributed to this article.

Andrea Drusch writes about local government for the San Antonio Report. She's covered politics in Washington, D.C., and Texas for the Fort Worth Star-Telegram, National Journal and Politico.