San Antonio City Council approves embattled CPS Energy's 3.85% rate increase

click to enlarge In the hot seat: CPS Energy interim CEO Rudy Garza answers questions from city council during Thursday's meeting. - Screen capture / SATV
Screen capture / SATV
In the hot seat: CPS Energy interim CEO Rudy Garza answers questions from city council during Thursday's meeting.
City council voted 8-3 Thursday to let CPS Energy boost its rates by 3.85%, a request the municipally owned utility made amid a storm of criticism over recent management failures and last February's crippling power outages.

In a separate 9-2 vote, council also approved a fee that will allow CPS to recoup some of the $418 million in fuel costs it paid out as a result of the catastrophic ice storm that triggered those outages.

The rate hike, the first by CPS since 2014, would show up on customer bills starting in March and drive them upward by an average of $5 per month.

CPS interim CEO Rudy Garza said the rate expansion would bring in an additional $73 million annually, helping the utility deal with an employee shortage and keep pace with the city's breakneck growth. Grilled by council members, he made repeated assurances that he's working to rebuild trust in his organization.  

"Waiting will cost our community much more later," Garza cautioned.

Even so, most of the public comments shared during the lengthy debate opposed the increase. Activists and residents said they want to see the utility adopt a more equitable rate structure and to stop disconnecting residents who are unable cover their bills.

Neighborhood activist Rose Hill said she worries about the hike's effect on elderly residents.

"Are they going to be able to pay their bills, or are they going to have to choose between that and paying for their medications?" she asked.

Council's two most progressive members, first-termers Teri Castillo of District 1 and Jalen McKee-Rodriguez of District 2, joined its most conservative one, District 10's Clayton Perry, in opposing the increase. All voiced concern that the higher bills come as residents grapple with the pandemic and rising inflation.

"Change will move at the speed of trust, and right now, we must admit that CPS Energy and the city, for that matter, have a long way to go to earn the trust of our community," McKee-Rodriguez said. "Especially our working class families, folks who sat in cold, dark homes on the East Side [in February] while lights were bright downtown."

CPS has been hammered with criticism for keeping some neighborhoods without power for hours on end during the February freeze. At the time, Mayor Ron Nirenberg and other members of council called it out for a lack of communication amid the crisis.

What's more, top leaders at the utility, including CEO Paula Gold-Williams, resigned last year amid media scrutiny, including a KSAT report suggesting she and her second in command had spent extravagantly using company-issued purchasing cards.

In comments, District 1 Councilman Mario Bravo and District 6 Councilwoman Melissa Cabello Havrda threw conditional support behind the increase. Both said they expected a broad third-party audit of the utility's finances and management practices — something to which interim CEO Garza verbally agreed.

However, Castillo introduced a motion that would either require CPS to undergo that audit before council decides on the rate increase or push back the vote until Jan. 12, 2023. She noted that council has no assurance Garza will remain as CEO.

Ultimately, council rejected Castillo's motion 9-3.

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