CPS Energy residential customers can expect a monthly bill about 2.8% higher in February than what they were charged on average for electrical and gas service in recent months. That’s due to a 4.25% hike to the base rate, which is determined by average usage over the previous six months, going into effect Feb. 1.
Executives said the higher rate was needed to make its power system greener and more durable, expand its workforce, and make technology and security improvements.
“With growth comes additional energy demand and investment to sustain system reliability,” CPS Energy communications specialist Milady Nazir said.
Two-minute impact
The rate hike, approved by CPS Energy board and City Council on Dec. 4 and 7, respectively, will generate $85 million more yearly for the utility.
CPS Energy officials said the new revenue will go toward reinforcing the utility’s wires, poles and other infrastructure; overhauling its 20-year-old computer system; enhancing customer service; and preparing to replace workers eligible for retirement over the next five years.
District 10 council member Marc Whyte proposed a 2.125% rate hike and returning part of a $420 million-plus city budget surplus, including CPS Energy excess revenues, to the city-owned utility to stave off the 4.25% increase.
The base rate applies to all customers, but there are other factors to consider in billing, such as whether it’s residential use or commercial. Council rejected that proposal.
“In the 2025 budget process, we need to cut spending on the city side and invest those savings into CPS,” Whyte said later.
Dig deeper
Spurred by council and community members’ concerns about affording the new rate hike, CPS Energy officials said they will increase the Affordability Discount Program.
Eligible residential customers can save as much as $2.22 monthly on electric and gas together with the program increases. The utility also plans to boost the number of eligible customers the program can aid.
Eligible customers seeking payment assistance may also find help through the city’s and Bexar County’s Residential Energy Assistance Partnership on the city’s website at www.sa.gov/directory/departments/dhs/financial-assistance/utility-assistance or the county’s website at www.bexar.org/2764/utility-application-process.
What they're saying
John Courage, San Antonio District 9 City Council member, said nobody wants to raise rates, but one is required to help CPS Energy shore up local power supply infrastructure, security and manpower to serve a growing city.
"A 4.25% rate increase is immediately needed to ensure continued adequate, efficient and reliable energy delivery to every household and business in the CPS Energy system,” Courage said.
While local business advocacy groups endorsed the rate increase, CPS Energy and city leaders received complaints about the move from several residents and ratepayers during the council meeting and afterward.
Chris Fails, former Hollywood Park mayor, told Community Impact he feels underrepresented because CPS Energy returns 14% of its annual gross revenues to the city of San Antonio, owner of the utility, whereas suburbs served by the utility do not get a share of excess revenues.
"None of us have a voice on the rate hikes. We are just forced to accept the whims of the San Antonio City Council,” former Hollywood Park Mayor Chris Fails told Community Impact.
Going forward
CPS Energy President and CEO Rudy Garza said the rate hike will also support implementation of the utility’s new power generation portfolio.
Officials plan to phase out coal use by 2028; close one coal plant; turn another into a natural gas facility; and add nearly 5,000 megawatts of power capacity over seven years—a blend of natural gas, solar, wind and lithium battery storage.
In all, CPS Energy officials plan to spend $6.2 billion over the next five years to implement these and other improvements. The utility’s executives also said they are eyeing a potential base rate increase in 2027.
CPS Energy board Chair Janie Gonzalez thanked city leaders for backing the rate hike and sharing insight regarding the utility’s long-term plans.
“[Council’s] decision plays a vital role in advancing our utility’s progress toward a future of greater resilience and reliability in energy services for our community,” Gonzalez said in a statement.
