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Chamber Board Convenes for September Hybrid Meeting, With Presentation from CPS Energy

The Chamber held its hybrid September Board of Directors meeting on September 30, with Chair of the Board Hope Andrade welcoming those members who were in-person and those who joined via video. The meeting kicked off with an important and insightful presentation from Former Chamber Chair and President and CEO of CPS Energy Paula Gold-Williams on the State of the Utility and the Future of Energy. Paula started by explaining that CPS Energy has created the following value pillars that drive their business decisions, including rate increases. These pillars are:

  • Reliability,
  • Customer Affordability,
  • Security,
  • Safety,
  • Environmental Responsibility, and
  • Resiliency

Typically, when CPS Energy does town halls, they ask attendees to rank which of these pillars are most important, and reliability and affordability always rank highest, with resiliency being an additional priority since winter storm Uri.

Paula explained that CPS Energy cannot just raise rates when costs go up, they must, like other businesses, control their costs and absorb as much as possible. Additionally, rates have to be approved by their board and by City Council. CPS Energy has only had one rate increase in almost 12 years, and the last increase was eight years ago.

Over the last 12 years, the company has closed two coal units in support of environmental responsibility and worked with OCI, one of their partners, to build a substantial amount of clean solar energy that is now part of their energy generation portfolio. Paula told the Board that when CPS Energy has more capacity than it needs, they can sell excess energy in the wholesale market to support other providers and the stability of the grid. In fact, they are the 4th largest generator in Texas, and the excess capacity comprises about 12% of the excess for all of Texas. In addition to selling excess capacity, the company can also use it against problems with operations. For example, if a plant goes down unexpectedly, CPS can self-generate that power and typically replace it.

In the past, when they were able to sell excess power to others outside of San Antonio, CPS Energy did not need to ask for rate increases. However, the market has changed significantly, and they are not able to generate as much money selling excess as they have in the past. Additionally, San Antonio has undergone much change since the last increase. CPS Energy has added about 125,000 electric and 36,000 gas customers, as well as assets and technology to become more efficient, not to mention the fact that the demand for energy has increased. Despite that, they return about $1 million a day to the city of San Antonio and have saved more than $906 million over the last decade through management of their debt portfolio and taking advantage of the low cost of capital because of San Antonio’s strong credit rating.

Paula explained that while CPS Energy was trying to save money, the pandemic hit, and in March of 2020, they went on a moratorium and stopped disconnecting service for customers who could not make payments. To date, $37 million has been used to assist customers and CPS still has about $120 million in unpaid balances. This shortfall is affecting the organization’s ability to manage its costs. At the same time, CPS is focused on resiliency as our weather has gotten more extreme.  Additionally, reliability remains a top priority as our community grows and the organization’s assets age. Finally, technology and security are the other foremost investments that are needed as systems reach the end of life.

When talking about bill impact scenarios, Paula assured the Board that CPS Energy is focused on affordability and estimated the possible rate increase to be approximately 10% for residential customers and for businesses, depending on natural gas usage. CPS Energy’s Rate Advisory Committee is also looking at rate structure. She also discussed the perception that commercial customers pay less than residential customers and explained that commercial customers typically use an even and consistent amount of energy and therefore do not peak the system (like buying your energy from Costco in bulk as opposed to running to the corner convenience store to buy that loaf of bread), while residential customers have several peak periods throughout the day, which makes it more expensive.  Paula mentioned that in the next 30 – 45 days, she believes that CPS Energy will be announcing a formal rate increase.

During his President’s update, Chamber President and CEO Richard Perez explained that the Chamber is planning to come back to the Board with a position statement regarding the CPS Energy rate increase and provided a high-level update on the search for a business leader to fill Ed Kelly’s CPS Energy Board seat. CPS Energy received 26 applications, of which 20 were viable. They then whittled that list to 11, and a small committee of the CPS Board selected four to move forward. He mentioned that the CPS Energy Board would be meeting on Monday to select a lone nominee to forward to the City Council. Richard also mentioned that SAWS is looking to fill a board vacancy for the Southeast quadrant, and the Chamber is working to ensure that strong applicants make it into the pool.

Richard reminded the board that during our last meeting we discussed workforce development with the City Manager and told him that we wanted the City to spend some time focusing on learning. Richard then asked the Chamber’s Vice President of Workforce Development Katie Ferrier to give an update on the SA Ready to Work Program. Katie told the Board that the City has hired a new Director of Workforce Development, Mike Ramsey, and the Chamber has been meeting with him regularly and encouraging the City to enhance their efforts of communicating with employers. The City will be conducting a survey asking employers wherein the process they want to get involved and how they want to get involved. The Chamber will help push that survey out in order to receive actionable and relevant data.

Richard then asked Lori Stinson, Vice President of Military Affairs and Leadership Development, to provide an update on Leadership San Antonio (LSA), San Antonio’s premier leadership program. The application process for LSA 46 opened on September 20 and will close on October 18 at noon. There will be an information session for applicants on October 12 from 3 – 4 p.m. via Zoom. Interviews of semifinalists will take place on November 17, and class members will be notified by November 29. On December 9, the Chamber will announce the LSA class 46 members and hold a welcome reception for the class. Applications are online at www.leadershipsa.org.

Lori then gave an overview of the Chamber’s Celebrate America’s Military events, taking place November 1 – 19. CAM is the longest, and largest celebration to honor our military. On November 1, we will be at the Alamo to kick off CAM; on November 2, we will have a prayer breakfast honoring military chaplains; on November 4, we will have our Senior NCO reception at Sea World; and on November 9, we will have our Spirit of America Dinner with keynote speaker John Troxell, former Senior Enlisted Advisor to the Chairman of the Joint Chiefs of Staff from 2015 to 2019. For more information, visit www.celebrateamericasmilitary.com.

The Chamber’s Director of Special Events Andrew Gorman provided a brief update on the Chamber’s Annual Gala, which will be held Thursday, December 2 at the Henry B. Gonzalez Convention Center. During the Gala, we will pay tribute to our 2021 Chair of the Board Hope Andrade, and her leadership team and welcome our incoming Chair Phil Green and his leadership team. We will also be celebrating the Spirit of San Antonio with a fun, festive, and exciting event program and entertainment. Sponsorships and more information are available here.

Richard announced the new dates for SA to DC 2022 – Monday, January 31, 2022 – Thursday, February 3, 2022, and asked the Board to support UTSA Roadrunner Football. The Chamber supported the development of the UTSA football program, and we encourage our members to support the undefeated Roadrunners and attend an upcoming game. More information can be found here. Finally, Richard discussed the Federal Infrastructure Bill, which includes a $4500 consumer tax credit for electric vehicles made in a union facility. The Chamber is opposed to this tax credit and has publicly communicated our opposition.

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