Wholesale power contracts bring in revenue, help keeps retail rates low

By on November 20, 2013

CPS Energy established new contracts earlier this month to continue providing wholesale power to the cities of Castroville and Hondo through 2018.

Selling excess power generates additional revenue for CPS Energy, and that helps keep our retail rates low.

We’ve been providing all the power for Castroville, Hondo and Floresville since 1942, the year the city of San Antonio bought CPS Energy.

“We’re glad to continue our long running relationship with these wholesale customers,” said Paul Barham, senior director for Energy Market Operations. “We’re pleased to be in a position to support their electrical supply needs.”

In 2008, CPS Energy made a strategic decision to commit to selling some of its excess generation to new wholesale customers, focusing on utilities geographically near our service territory. As a result, Boerne, Seguin, Kerrville and Central Texas Electric Cooperative also signed contracts to buy power from CPS Energy through 2021.

CPS Energy’s diversified energy portfolio and strong reputation contributed to their decision, said officials with each city.

“We’re very happy with the contract we received from CPS,” Rick Cortes, assistant city manager in Seguin, told the San Antonio Express-News in 2011, when the new contract was signed.

While CPS Energy provides the energy, each wholesale customer maintains its own distribution and customer service operations.

Expanding our wholesale business doesn’t affect service to customers in our own territory, because CPS Energy currently has excess power.

In the last few years, CPS Energy has added four new natural gas peaking units at our Braunig Power Station, acquired the 800 MW Rio Nogales combined cycle natural gas plant in Seguin, and expanded our wind and solar contracts.

Last year, six percent of our generation capacity was sold on the wholesale market, which brought in an additional $18 million in revenue.

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