Facing costs from the February winter storm that could hit $1 billion, CPS Energy received approval Monday to borrow half that amount to avoid immediately saddling its customers with exorbitant bills.
At a CPS Energy special meeting Monday, utility officials released rough estimates for how much the deep freeze the week of Feb. 14 will cost. The utility expects to owe $800 million in fuel charges, particularly for natural gas that saw price spikes of up to 16,000% the week of the storm, CPS Energy President and CEO Paula Gold-Williams said.
CPS Energy also will likely owe $200 million to the Electric Reliability Council of Texas (ERCOT) to pay for power it received during the periods of the storm when CPS Energy wasn’t able to generate enough electricity to meet San Antonio’s needs, Gold-Williams said. Like other Texas producers, CPS Energy saw its power plants and natural gas supplies struggle to operate at full capacity in subfreezing temperatures.
After the storm, CPS Energy suspended its billing processes for the period that covers the storm until it can fully reckon with costs that Gold-Williams has called “the next tsunami.”
Officials did not announce Monday when they plan to start issuing bills that cover the week of Feb. 14-20. Last week, the utility resumed autopay to collect payment for energy used weeks ahead of the storm.
Gold-Williams said CPS Energy is negotiating with fuel suppliers and elected officials in the hopes of getting its costs lowered after a crisis that left more than 4 million Texas households without power.
After the storm came headlines about some Texans in competitive power markets, such as Houston and Dallas-Fort Worth, who saw their energy bills mount into the thousands of dollars. In some cases, power providers passed the high costs they incurred in the storm directly to consumers.
CPS Energy leaders say they won’t use their typical method of including such costs in the three “adjustment factors” tacked onto customers’ bills. The utility also has no immediate plans to resume disconnecting customers for nonpayment, a practice it stopped in March 2020 in response to the coronavirus pandemic.
“We are not sending out bills that include these outrageously high prices for fuel and power,” Gold-Williams said. “That is what municipal power does. We make sure we defend and protect our customers.”
However, CPS Energy’s customers will inevitably pay back costs over time in the form of debt repayments. The utility’s board unanimously agreed to allow its staff to seek $500 million in short-term loans to help CPS Energy stay financially healthy without steep bill hikes.
“We are pursuing every avenue to reduce our high fuel costs to a reasonable and fair level,” CPS Energy Senior Director Julie Johnson said at the meeting Monday. “But just in an abundance of caution, we’re offering a solution to increase our liquidity and allow us to maneuver as we execute our plan.”
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