CPS Energy Delays Rate Hike to 2027 After $170 Million in Savings

CPS Energy staff reported that $170 million in incentives and savings closed the utility's budget gap, allowing the board to postpone a planned rate increase until 2027.

The utility faced a projected shortfall of at least $50 million this year. Mild weather reduced retail energy sales by $40 million and cut wholesale revenue by $100 million. Storms and outages added between $20 million and $30 million in extra costs.

Offsetting these losses were $115 million in federal nuclear production incentives. A shift in the timeline for a transmission cost study created a roughly $50 million positive impact on revenue. The utility also saved $5 million on debt payments due to lower interest rates and premiums.

Discussions about a rate hike began in March when CPS Energy presented a budget showing a $50 million deficit. The issue prompted dialogue between the utility and the City of San Antonio, the utility's owner. Officials confirmed in a press release earlier this month that rates would not change, citing affordability pressures on residents.

CPS Energy originally intended to request rate increases every other year starting in 2021, but it has not implemented a request since 2024. Mayor Gina Ortiz Jones, a member of the board, stated that infrastructure needs did not force a rate hike.

“If the infrastructure needed it, CPS would have asked for it. Correct?” Jones asked. Interim CEO Frank Almaraz confirmed the utility could avoid the increase this year.

Chief Financial Officer Debra Wainscott told the board that the delay places pressure on financial metrics used to track borrowing capacity. “The fact that we didn’t go for a rate request is still putting pressure on our metrics,” Wainscott said. “We’re pushing the top of that range here. So it’s still very, very challenging.”