CPS Energy Shut Out Public in $1.4 Billion Natural Gas Plant Purchase

The following piece first appeared in the San Antonio Express-News

What does it mean for a public utility to serve the public interest?

CPS Energy is the largest gas and electric public utility in the country. It provides electricity to 1 million customers. Most San Antonians just want affordable, reliable electricity.

But there’s more to a utility than providing basic service. CPS Energy makes decisions about where our electricity comes from, about how to manage growth, and about who faces the positive and negative impacts of its decisions. They are decisions with repercussions that can extend for decades.

That’s why CPS Energy’s September announcement of a $1.4 billion purchase of four methane gas power plants was a shock. How did such a major decision happen behind closed doors? CPS Energy customers should be disappointed with this very un-public move from their public utility.

CPS Energy leadership will say these newly purchased plants could save customers $2 to $4 a month on their bills. Those savings are based on a cost comparison with building new gas plants, and this recent purchase is for existing plants located in the Houston area. CPS Energy has other options. A public decision-making process would have considered the alternatives.

The cheapest strategy: saving energy. This strategy is already working in San Antonio. The Sustainable Tomorrow Energy Plan — STEP — provides incentives to customers who make energy efficiency upgrades to their homes, everything from insulation to new appliances. The Casa Verde weatherization program is free to income-qualified customers. These investments save customers money and make homes safer and more comfortable during summer and winter temperature extremes. Customers save money, and so does CPS Energy. Every megawatt of energy we save is a megawatt CPS Energy doesn’t have to buy. It’s a win for everyone.

The savings provided by the STEP program are permanent.

In contrast to the fixed price of solar, wind and battery storage, gas prices are volatile. The promised savings of a few dollars a month could be wiped out at any time by geopolitical events, supply chain disruptions and severe weather events. We’re still paying off additional charges CPS Energy incurred during the deadly winter storm of 2021. It took just a few days of frozen methane gas supply chain to stick Texans with billions of dollars in new charges that will stay on our bills for years. Why should we believe CPS Energy when they say that this gas plant purchase will save money? No utility, even one as big as CPS Energy, can predict with certainty how much gas will cost next year or even next week.

If CPS Energy had considered this major purchase in an open forum, its ratepayers would have raised other concerns. Fossil fuel gas plants come with other costs. Human health, our environment and the climate suffer when we burn methane gas. CPS Energy’s new purchases could run for 40 or 50 years, meaning we’ve locked in those negative costs.

The timing of CPS Energy’s announcement is especially disappointing. The utility is just about to begin the process of updating its generation plan. This update would have determined the energy sources that will be used to meet future electricity demand. But that decision has already been made, to the tune of $1.4 billion. CPS Energy’s last major power purchase decision also happened without community input.

The update should have been the opportunity for stakeholders to engage with CPS Energy on any expensive fossil fuel expansion plans and the issues of sustainability, affordability and reliability of all power sources.

Currently, the only way CPS Energy engages the public in power generation is through its Community Input Committee. The CIC includes a power and technology working group; however, their meetings are not open to the public. The only publicly available information is a summary of the meetings posted on CPS Energy’s website. This lack of transparency in a public utility should alarm ratepayers.

In May 2024, CPS Energy made a similar announcement when it purchased three gas plants from Talen Energy in Laredo and Corpus Christi without public input. The cost of those plants was $785 million. Sudden announcements of gas generation purchases are not new. Let’s hope this most recent sudden announcement is the utility’s last and that public participation in such big decisions is invited and embraced.

DeeDee Belmares is a clean energy advocate with Public Citizen’s Texas office. She has served on the CPS Energy Rate Advisory Committee and lives in San Antonio.