CPS Energy delays rate hike after finding $170 million in savings

San Antonio residents will not see higher utility bills this year.

CPS Energy staff told the utility's board on Monday that the company has enough financial cushion to postpone its planned rate increase. The decision comes after the utility identified approximately $170 million in incentives and savings that closed a previously projected budget gap.

Chief Financial Officer Debra Wainscott explained that unexpected favorable conditions allowed the company to manage its current fiscal year without asking customers for more money. She stated that the company expects to revisit the rate conversation for the following year. The savings include a $115 million nuclear production incentive from the federal government. A potential shift in the timeline for a transmission cost study could add another $50 million to transmission revenue. Additionally, lower-than-expected interest and premiums are projected to save the utility $5 million on debt payments.

These gains counterbalance several financial setbacks the utility faced earlier in the year. Milder weather caused a $40 million drop in retail energy sales and a $100 million shortfall in wholesale revenue. Storms and outages added between $20 million and $30 million in extra costs. The utility was already anticipating a shortfall of at least $50 million before these additional factors were factored in.

The idea of a price hike had been under discussion since March, when CPS Energy presented a budget showing a $50 million deficit. That presentation sparked conversations between the utility and the City of San Antonio, which owns the company, about whether rates should rise. CPS Energy officials settled the matter earlier this month by announcing that rates would remain unchanged. In a press release, they cited affordability pressures on residents as the primary reason for the decision.

Mayor Gina Ortiz Jones, a member of the CPS Energy board, confirmed that infrastructure needs did not force a rate increase. She asked the staff, "If the infrastructure needed it, CPS would have asked for it. Correct?" Interim CEO Frank Almaraz agreed, stating that the company reached a point where it did not need the increase this year.

Wainscott noted that skipping the rate request still places pressure on the utility's financial metrics. Large utilities often need to borrow money for major projects and must demonstrate strong financial standing to secure low interest rates. She described the current situation as very challenging, saying the company is pushing the upper limits of its acceptable financial range.