After taking heat for trying to increase customer rates while top-level executives receive sizable bonus checks, CPS Energy is doubling up on efforts to save face.
During a presentation before City Council last Thursday, CPS CEO Doyle Beneby said the utility is formulating a plan that could lessen bonus pay and cut the proposed rate hike. “We’ve come up with a plan that I think can significantly reduce the pay out even more,” said Beneby, in his second briefing before council on the rate increase.
In August, the utility asked residents to shoulder a 4.75 percent hike (a roughly $5.19 addition) to monthly electric and gas bills. CPS says the increase, the first in three years, is needed to modernize infrastructure and update the power grid. The added costs might not be so hard for customers to digest if it weren’t for the $16.2 million employees received in bonuses, not to mention the nearly $1 million in accumulated incentive pay Beneby received this year, as the Current previously reported.
Beneby’s proposal to potentially scale back bonuses comes atop a recent announcement by CPS to restructure its incentive pay program. The City-owned utility pledged the system would be “altered in a way that would increase accountability” and ultimately reduce pay out by 25 percent. The money saved, totaling more than $4 million by CPS estimates, would go toward expanding affordability programs for lower income customers.
Social justice advocates have warned council not to allow CPS to overburden middle-class families.
“The vast majority of households have experienced stagnant or shrinking incomes in recent years,” said Dr. Meredith McGuire, a sociology professor at Trinity University, speaking on behalf of Re-Energize San Antonio, a newly formed coalition of social justice and environmental groups.
“The proportion of San Antonio households paying more than one third of their income on housing, and that includes utilities, has more than doubled over the last 10 years,” she said. “Increases in utility costs would hurt many more middle- and working-class families. I ask council members to consider how many of their own constituents would be hurt by this rate increase.”
Keeping details of the second bonus-reduction plan vague, at press time Beneby was expected to present the idea to his board of trustees as early as October 8 for approval. In the meantime, District 4 council member Rey Saldaña suggested CPS take a more aggressive approach to alerting those struggling customers about the affordability programs: You have the data on who’s falling behind with their payments, so why not contact them directly?
“You make a point … There is a chance for us to be more proactive,” said Beneby.
Full disclosure: No one in the Current’s editorial department has ever billed $300 an hour to CPS for anything, just in case you were wondering.
Update: On Tuesday, the CPS board of trustees approved CEO Doyle Beneby’s recommendation to lower the rate increase from 4.75 to 4.25 percent, changing the average monthly bill from $5.19 to $4.68. Council is expected to vote on the rate increase Nov. 7. The hike would take effect on Feb. 1, 2014. Beneby also suggested cutting employee incentive pay by 50 percent in 2015 and 2016. That, along with delaying some upgrades to service centers and facilities, allows the utility to reduce the rate hike, according to CPS.