CPS Energy’s Board of Trustees is expected to approve a two-year budget plan today that holds the line on operating costs, even as the utility plans for continued expansion.
Capital costs will decrease from fiscal year 2012-13, which included the cost of purchasing the Rio Nogales natural gas plant, while CPS Energy operations and maintenance will hold steady at $368 million for the next two fiscal years.
The fiscal year 2013-14 capital and non-fuel operations and maintenance budget is projected at roughly $1 billion; it increases slightly, to almost $1.1 billion, for 2015.
The proposed 2013-14 budget does not include a rate increase; CEO Doyle Beneby told trustees in October that thanks to streamlined business practices and improved efficiency, the need for increased revenue could be pushed off for another year. CPS may seek a rate increase the following year.
CPS Energy is coming off one of the most successful years in the company’s history. It broke safety records, increased customer satisfaction and ranked in the top 2 percent of all credit-rated utilities across the country. It achieved those goals while keeping rates among the lowest in the country, and the lowest of the top ten largest U.S. cities. CPS Energy last raised rates in February 2010.
Electric customer growth is expected to continue at just under 2 percent a year for the next two years, while natural gas customer growth is projected to rise 1 percent.
Even with that growth, as part of its effort to continue to improve efficiency, CPS Energy anticipates reducing its workforce by another 83 employees, to 3,400. That’s down from 3,650 in 2011. The reduction will be accomplished through attrition, not layoffs.
“As new technology is implemented in the utility industry, and as processes become more automated, we’ll need fewer employees, and those that we have will require more technical skills,” said Vice President for Business Operations John Benedict.
One increased cost facing the utility next year is two planned refueling outages at the South Texas Nuclear Project, of which CPS Energy holds a 40 percent stake. Every three years the plant completes two planned outages instead of one.
CPS Energy will also begin paying the increased costs assessed all utilities as part of the $7 billion, statewide effort to build additional power lines from West Texas to its large cities.
CPS Energy has also budgeted for a major maintenance program for its newly-purchased Rio Nogales natural gas plant. While renewables will make up an increasing share of the utility’s generation, traditional sources like natural gas, nuclear and coal will continue to make up more than 80 percent of CPS Energy’s portfolio.