San Antonio business leaders say CPS is likely late for rate hike

As CPS Energy works on a plan to increase its tariffs, some San Antonio business leaders say an increase – the utility’s first in eight years – is likely overdue.

“Any kind of price increase is a challenge for everyone. But you have to understand that we, the city, own this utility, and we have to operate it to a level that will work for us, ”said Berto Guerra, CEO of Avanzar Interior Technologies, a manufacturer that supplies parts for Toyota. Factory side. “If you compare us to other cities, we are among the lowest costs. So even with an increase in prices, we will still be very competitive.

He spoke after hearing senior executives from CPS owned by the city and the San Antonio water system discuss tariffs and readiness for their utilities for the coming winter after the February storm hit. devastated their ability to serve customers. They spoke Wednesday at a downtown forum hosted by the North San Antonio Chamber of Commerce.

The storm, which left large swathes of the city without power or water, “was a situation that I think we learned a lot from,” said Robert Puente, President and CEO of SAWS. “Every month, on our board’s agenda, there will be a report to our board and the community on what we’re doing to meet the recommendations” to avoid another winter calamity .

Paula Gold-Williams, CEO of CPS, said costs related to the storm – including about $ 1 billion in unforeseen charges for natural gas and electricity – were only part of the reason for the increase in tariffs. The utility cut costs to delay the move, but CPS is now “cutting bones,” she said.

Utility officials said the drivers of the rate increase request, which would be submitted to city council for approval later this year, were increasing costs for attracting and retaining employees and for materials such as steel. and copper. Beyond escalating expansion costs to keep up with the city’s growth, CPS has received around $ 120 million that customers owe the utility in overdue bills since it suspended electrical disconnections during the pandemic.

“We have built up such a backlog and withstood such pressure to keep the business going when we don’t get that many payments,” Gold-Williams said at lunch. “If we don’t get a rate hike, it will have an aggravating effect. “

Taxpayers will likely see their bills increase by about 10%, or $ 10 to $ 15 per month for residential customers.

In 2019, residential customers paid CPS 10.7 cents per kilowatt hour of electricity they consumed, according to the US Energy Information Administration, which publishes data on every US utility company.

Among nearly 300 U.S. utilities with at least 50,000 residential customers, the average household paid 12.9 cents per kilowatt hour in 2019, nearly 19% more per unit of power than CPS customers.

San Antonio commercial taxpayers, meanwhile, paid 8.8 cents per unit of electricity in 2019. This was almost 18% less than the average price of electricity among all major U.S. utilities, according to the EIA.

“Businesses aren’t complaining much, because (the price increase) really isn’t that big,” said Cristina Alderete, president and CEO of the North San Antonio Chamber. CPS staff “try to do everything they can to make sure it’s small.”

Higher utility bills are likely to hit residential customers harder than businesses, Alderete said, adding that she believes most small businesses in San Antonio could handle paying higher utility bills.

“They realize it’s a necessary part of their business,” she said. “The CPS was already considering, before (the pandemic and the winter storm), an increase in prices, since we had not had one for so long. “

Although CPS has not officially requested the increase, the utility will likely present to city council within the next two months. Gold-Williams said CPS would have a better idea of ​​how much the utility needs to increase its tariffs by the end of this month.

For many business owners, the employer vaccination mandate implemented by the Biden administration has been more the focus of attention than the rate hike, said Richard Perez, CEO of the Chamber of Commerce of San Antonio. He said the House would likely decide next week whether or not to support the rate hike.

Still, Perez said it made sense.

“The initial presentation they made on the need for a tariff increase seemed all logical: for cybersecurity, as the cost of goods has increased, winter storm Uri is costing,” Perez said. “It seemed reasonable. “

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