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Capital projects, infrastructure upgrades drive rate increase request
By Tracy Idell Hamilton on July 31, 2013
The CPS Energy Board of Trustees on Wednesday heard a proposal to seek a 4.75 percent rate increase from the San Antonio City Council.
CPS Energy last raised rates in 2010.
If approved, the new increase would go into effect Feb. 1 of next year, and boost the average residential customer’s bill by $5.19.
Last year, CPS Energy was able to forego a previously planned rate increase by aggressively reducing costs, increasing efficiency and delaying certain infrastructure projects.
It was able to do so while remaining in the top two percent of of all credit-rated utilities in the country, a position that keeps borrowing costs low.
To maintain that strong position, however, CPS Energy must now increase revenue.
Because providing affordable, reliable power is CPS Energy’s main mission, the utility will continue to refine its business practices, root out waste and make decisions about its future power supply that hedge against risk and higher costs.
Even with the increase, CPS Energy rates will remain among the lowest in Texas, and the lowest among the top 20 largest cities in the country.
San Antonio’s economy is growing, which means CPS Energy is growing. But those new customers don’t completely cover the costs of expansion, nor do they cover the costs of upgrading existing infrastructure.
As CPS Energy’s customer base grows, so to do the number of civic improvement projects the utility is asked to do by the City of San Antonio and Bexar County, such as relocating existing electric and gas facilities to support street and drainage improvement projects.
New technology and environmental regulations also require strategic investment to keep up with industry standards and customer expectations. Improvements to the electrical grid, scheduled to begin later this year, will increase efficiency, allowing CPS Energy to see and respond to power outages remotely.
Th upgrades will save money and increase reliability in the long run, but require substantial investment today.
Energy efficiency and conservation has been a crucial part of CPS Energy’s overall strategy to keep rates affordable, and it has exceeded those goals by 300 percent.
Those programs benefit customers in two ways – by reducing household utility bills and delaying the need to add more power plants to CPS Energy’s fleet.
To ease the burden on our lowest-income customers, CPS Energy is expanding its Affordability Discount program, which helps qualified customers by reducing their monthly bill by $12.30 monthly for gas and electric customers. That’s more than the amount of the rate increase.
CPS Energy has additional programs to help those in need as well.
In the coming weeks, CPS Energy will communicate clearly and often with customers and elected officials about why a rate increase is needed. That will include lists of specific capital projects and upgrades.
CPS Energy is hosting a series of Customer Care Fairs in neighborhoods around the city and county to answer questions and promote programs that can help customers save money on their bills.