To succeed in its plan to drastically reduce planet-warming carbon emissions, CPS Energy is developing the longest-range strategic plan in its history, out to 2050.
Facing a rapidly changing energy and technology landscape, coupled with the need to maintain a reliable and affordable system for customers, CPS Energy says this plan will align the utility with the city’s climate goal to be carbon neutral by that year — a goal the utility won’t be able to commit to until statewide reliance on natural gas generation plants wanes.
In a presentation to trustees Monday, Chief Strategy Officer Elaina Ball described the pressures all utilities are facing in this era of rapid renewable growth, technology acceleration and a warming planet that is facing more extreme weather events.
With the completion of the utility’s 5-year Vision 2027 approaching, she said, now is the time to understand those challenges and chart a successful path forward.
Developing the plan will require input from the board, San Antonio City Council, and the community, to help “shape CPS Energy’s future vision and determine near, medium and long-term priorities,” stated the presentation given to trustees.
“Most large utilities in the United States and throughout the world have a framework that’s multi-decade, and that’s really with intent the decisions that utilities make are generational,” Ball said.
Trustees were informed about some of the long-term challenges the utility will inevitably face over the next 25 years, as staff and consultants explained the need for the development of a long-term plan.
The resulting long-term plan will ensure that CPS Energy is prepared for a changing global energy market, said the board’s Chairwoman Janie Gonzalez.
“It is not too early to think about what is beyond 2027,” Gonzalez said, referencing the utility’s current strategic plan, Vision 2027.
Vision 2027 started CPS Energy’s shift away from older fossil fuel plants responsible for higher carbon emissions to newer technologies, and included CPS Energy’s commitment to discontinuing the use of coal by 2028.
It also includes plans to shut down CPS Energy’s three natural gas-powered units at the Braunig Power Plant by the end of next spring, should ERCOT allow it, although the utility also plans to build two additional gas peaker plants in the next few years. Peaker plants are power plants that generally run only when there is a high demand, known as peak demand, for electricity.
Horizon 2050 will further those goals, with a mission “to power our community with reliable, sustainable energy at a competitive price.”
The vision is “A community empowered for generations,” said Marley Urdanick, a managing consultant from PA Consulting, who was retained by the utility to help develop the plan.
The global energy landscape is changing significantly, Urdanick said, and customers are looking for their utilities to balance equity, affordability and sustainability moving forward.
The two biggest uncertainties CPS Energy faces over the next 25 years are “technology and energy mix,” and “regulation and governance,” she said, and those in turn can affect affordability and reliability, which the utility has long pegged as its top priorities.
Trustee feedback
Trustee John Steen questioned the need for a long range plan and criticized current plans.
Retiring a Spruce coal unit, converting another to natural gas and potentially retiring Braunig’s natural gas units adds financial risk to CPS Energy’s bottom line, he said, criticizing the utility’s recent “swell in debt” due to purchases the utility has made to grow its portfolio.
Both Garza and Gonzalez defended the need for a longterm strategy plan.
“It is absolutely our belief that the 2050 horizon is the right horizon to look at based on a community goal that’s been set for us,” Garza said.
Garza also disputed Steen’s claims against the utility’s changing energy portfolio, noting that the majority of both the board and the rate advisory committee approved the plan. The debt is due to investments that will both see returns and add reliability to the local grid, he says.
“In one fell swoop, we created almost half a billion dollars of positive net present value purchasing 1,710 megawatts of natural gas capacity that will replace everything that we’re planning to retire and then some,” Garza said. “I’ve said it before — when you’re relying on 60-year-old natural gas plants to provide reliability, you have a false sense of security.”
CPS Energy will now be sharing the challenges it’s facing with the public and city council to collect feedback from the community and hear what its priorities are as it continues to develop the plan.
The plan will need board approval before implementation begins, CPS Energy spokeswoman Dana Sotoodeh confirmed.
Correction: An earlier version of this story included an incorrect number of megawatts of natural gas capacity purchased by CPS Energy. It is 1,710 megawatts.
