City plan for CPS Energy rebates stalls

City staff proposed $42.5M be sent back to customers as bill credits, but some council members want to spend it on preparing for future extreme weather

SAN ANTONIO – With just over two weeks until the San Antonio City Council is scheduled to vote on a budget, the question of what to do with $50 million of unexpected revenue is still up in the air.

The money is part of a windfall from CPS Energy, the revenues of which have spiked alongside customers’ bills. City staff had proposed sending most of the city’s share of the CPS revenue back to customers as bill credits, based on how much energy they used in July.

However, council members have suggested various alternative plans, and several members at a Tuesday budget meeting said constituents prefer uses other than rebates, which would be about $29 for the average residential customer.

Instead, there was a push in favor of using the money to prepare for future extreme weather through initiatives like home weatherization and tree planting.

“So we could give a one-time rebate, which in District 1 would be $25, or we could help them save -- a weatherized homeowner -- save $372 a year, every year,” said Mario Bravo, who was one of the first to call for an alternative use for the funds.

In the face of the opposition, and the absence of three council members, City Manager Erik Walsh said a vote on the rebate plan would be removed from the council’s Sep. 8 agenda.

Walsh said, however, that he had heard support voiced for a portion of the money being used for an assistance program for low-income ratepayers.

The city owns CPS Energy and takes 14 percent of its revenues as payment in lieu of taxes. Originally budgeting for $361 million in FY 2022, the city now projects it will collect $436 million from CPS Energy revenues by the end of September -- a $75 million increase.

City staff have recommended spreading $25 million of that surplus money between the Edwards Aquifer Protection Program, sidewalks, and obtaining a warehouse to store equipment for emergencies.

Of the remaining $50 million, city staff initially recommended putting $5 million into an assistance program for low-income ratepayers and divvying up the rest of the $45 million among all CPS Energy customers -- residential and commercial -- as a one-time credit on the October bills.

Following previous conversations about the plan, staff presented an updated plan that would put $7.5 million toward the assistance program and $42.5 million toward rebates.

The credits would be calculated based on 12.5% and 12.7% of their July bills, creating a wide array of possible credits.

The average residential customer would get $29 back. Meanwhile, the 40 commercial customers in the “super large power service” classification with bills averaging $752,211 would get back $94,711 on average.

District 7 Councilwoman Ana Sandoval has put forward a separate plan to take a portion of the CPS revenue in the future -- approximately $8 million to $10 million -- and use it for a dedicated resiliency, energy efficiency and sustainability fund.

Though Sandoval wasn’t present for Tuesday’s meeting, council members voiced support for her plan, including Mayor Ron Nirenberg.

Nirenberg, however, was the only one at Tuesday’s meeting to support the city staff’s plan as it was presented. Though District 10 Councilman Clayton Perry supported customer rebates, he wanted the full $75 million to go to customers.

The mayor questioned whether existing programs that deal with the issues raised by council members would be able to handle the influx of money.

“Do we have the capacity to push through another ‘X’ amount of dollars to advance these efforts to accelerate them? If not, what is the right amount of money?” Nirenberg asked.

The city council will have to figure out at least a broad plan for the excess revenue by the time it votes on the FY 2023 budget -- currently scheduled for Sep. 15.

It was not immediately clear if the issue would be added to another budget workshop session before the final session on Sep. 14, when the council will vote on amendments to the proposed budget.


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About the Authors:

Garrett Brnger is a reporter with KSAT 12.

Luis Cienfuegos is a photographer at KSAT 12.