CPS Energy lays out case for double-digit rate increase

CEO Paula Gold-Williams says possible increase currently estimated at 10%, not yet making formal proposal

SAN ANTONIO – CPS Energy has not yet formally announced a rate increase, but the city-owned electric and gas utility seems all but certain to propose one, which it currently estimates would be about 10%.

The utility has not increased its rates for about eight years, but speaking with media members on Monday, CEO Paula Gold-Williams listed off issues like unpaid bills, investment in infrastructure, and $1 billion in bills related to the February Freeze, as helping to drive the likely rate increase.

Gold-Williams emphasized, “We are not declaring a rate increase today,” but said the utility is in a “pre-rate increase period.” An increase would still require approval from the CPS Energy Board of Trustees and the San Antonio City Council.

Were an increase to pass, she expects it wouldn’t hit customers’ bills until early spring of 2022.

“Here we are with a tremendous amount of mounting pressure on the financials and we’re transparently trying to make sure everybody knows this is a real possibility this year. It’s very imminent,” Gold-Williams said.

Speaking to the utility’s board of trustees later Monday, CFO and treasurer Cory Kuchinsky focused on the investments in areas like technology and infrastructure, which he told KSAT make up the “lion’s share” of the rate increase proposal.

There’s a lot of planned investments there for reliability, resiliency, technology and security,” Kuchinsky told KSAT.

Making the grid more resilient and weatherized, investing in customer communication, replacing poles, transformers and aging technology were among the examples he presented to the CPS Board of Trustees during its Monday meeting.

A presentation from May, and included in an August meeting, puts the freeze costs at accounting for 1.5 to 3 percentage points out of a 6.5 to 9.5% increase. Kuchinsky said that rough proportion still holds.

The same presentation also included a portion related to “pandemic-related bad debt recovery.”

According to CPS, 76,012 customers owing a combined $93 million are eligible to be disconnected. Just under 72,000 of them are residential customers.

The utility is in the middle of resuming disconnections for non-payment after having suspending them since March 2020. The utility started with large commercial customers at the beginning of September, but is expanding its focus to include non-responsive residential customers.

Gold-Williams stressed that this would be the first rate increase in nearly eight years. The City Council approved a 4.25% bump to the electric and gas base rates in November 2013, which took effect February 2014.

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About the Authors

Garrett Brnger is a reporter with KSAT 12.

Luis Cienfuegos is a photographer at KSAT 12.

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