On Monday afternoon, CPS Energy's board unanimously approved the utility's request for a 3.85% base rate increase.
The base rate increase was approved alongside a regulatory asset intended to recover $418 million in fuel costs from last February's Winter Storm Uri.
The base rate request is likely to add about $3.84 to customers' monthly bills on average, according to CPS. Recovery of paid fuel costs could add an additional $1.26 per month under the fuel adjustment portion of bills. The total increase that the average residential customer would see on their monthly bill would be approximately $5.10, with the regulatory asset spreading the utility's recovery of $418 million across 25 years.
Approval from the CPS board moves the process forward to San Antonio City Council. The base rate request is scheduled to be presented to the council on Thursday. If approved the increase will go into effect March 1.
“Our team has been working diligently, alongside City of San Antonio staff, to present this rate request — the first we have asked for in eight years," Interim President and CEO of CPS Energy Rudy Garza said. "We are looking forward to our ongoing conversations with our elected officials and customers this Thursday on why this investment is needed to maintain critical community infrastructure to serve them."
Mayor Ron Nirenberg has publicly said he will vote for the rate increase. Most council members have not yet publicly committed to a vote, but several have indicated reservations — including District Six City Councilwoman Melissa Cabello Havrda, who has called for a third-party audit of CPS Energy's practices.
The announcement comes on the heels of a recent J.D. Power survey ranking CPS Energy last in its region for residential customer satisfaction, which J.D. Power executives attributed to lack of satisfaction with the utility's communication during Winter Storm Uri coupled with customer frustration over the base rate increase.
CPS Energy's sister utility, the San Antonio Water System, announced last week it will be refinancing more than $100 million in revenue bonds in order to resolve outstanding debt and avoid increases in customer bills.
According to CPS, the four main targets of its proposed base rate increase will be infrastructure resiliency such as power generation and distribution projects to support operations during extreme weather emergencies like Winter Storm Uri; the design of future technology platforms to replace current platforms; the upkeep of strong growth in the community; and retaining current employees and hiring qualified new employees to better serve customers.
The utility – established in 1860 — is the largest public power, natural gas and electric company in the country, serving nearly 885,000 electric and nearly 367,00 natural gas customers in San Antonio and segments of seven adjacent counties.
