SAN ANTONIO – CPS Energy and its customers could be facing a $1 billion bill for February’s weather-related power crisis, though utility officials say they are doing what they can to protect customers.
CPS Energy CEO Paula Gold-Williams told trustees during a special meeting Monday afternoon that CPS is “accumulating” costs, but she estimated natural gas suppliers want $800 million for fuel they sold CPS during the crisis, and the state’s power grid operator, the Electric Reliability Council of Texas (ERCOT), wants an extra $200 million. Gold-Williams said CPS would pursue regulatory assistance and help from elected officials to avoid customers shouldering that load.
“We’re going to negotiate. We want to sit down and talk constructively with our suppliers about what has happened and how difficult this is for the average citizen to bear. And then we will use every other tool in our toolbox to work to get this cost down,” Gold-Williams said.
CPS bills won’t include extra costs from winter outages for now; CEO stops short of promising it won’t ever happen
Much of the state was plunged into a series of forced power outages between Feb. 15 and Feb. 19 to protect the larger power grid as cold temperatures knocked power plants offline at the same time while simultaneously spurring demand for electricity to heat homes.
Power and fuel prices soared. The price per megawatt for electricity reached ERCOT’s maximum of $9,000. Gold-Williams says the price of natural gas, which CPS uses at some of its power plants and provides to customers for cooking and heating, shot up 16,000%.
What CPS pays for fuel is usually passed straight onto customers in their bills, but the utility has avoided that so far in this instance.
Gold-Williams has previously said CPS would look to spread the cost to customers out over 10 years or more. But as customers and officials alike have pushed back against the idea of shouldering any extra cost, she has instead focused her comments on how much of the $1 billion bill CPS can knock down first.
The utility is preparing itself to be able to pay a good chunk of it, though. The Board of Trustees voted Monday to allow CPS to take out up to $500 million in short-term financing -- in addition to other lending options it already has available.
“As we mentioned earlier, we are pursuing every avenue to reduce the cost to a reasonable and fair level. But just in an abundance of caution, we’re offering different solutions to increase our liquidity and allow us the flexibility to maneuver as we execute our plan,” Julie Johnson, a senior director in CPS’s Finance and Treasury department, told trustees.
Trustees also voted Monday to order an independent review of CPS’s preparedness, communication, and response regarding the power crisis. The board still needs to hire someone to perform it, and an exact timeline for the review is unclear.