Saying it recognizes the financial pressures its customers are facing, CPS Energy has taken plans for a rate increase off the table until next year.
A rate increase is still necessary, the city-owned utility said, to keep up with San Antonio’s growth and improve existing infrastructure. But rising costs for households fueled by tariffs, persistent inflation and higher interest rates mean it can’t come in 2026.
“We have deferred two rate reviews and will revisit the need for our next rate increase in mid-2027,” CPS said in a statement. “In the face of 20% cumulative inflation over the past 5 years, CPS Energy continues to hold the line on costs for our customers.”
The possibility of a potential rate increase was stoked in February when the utility presented a record-breaking budget with a $50 million deficit. The $2.87 billion budget came with a built-in rate increase that had yet to be approved by City Council. It was an atypical move for the utility, but former CEO Rudy Garza said the rate increase considerations were delayed to give new CPS board members time to “get their feet on the ground.”
Chief Financial Officer Cory Kuchinsky said in March that the utility planned to “get through summer” before considering a rate increase.
Its financial position hasn’t improved. In fact, summer performance of the utility’s non-fuel revenue missed budget by $40 million due to lower sales across the board. Rather than raising rates, CPS said it would look for more cost savings.
In September, Kuchinsky foreshadowed Thursday’s announcement.
“We’re sensitive to our customers’ financial pressures and everything that’s going on around us,” he said. “We’re aware of that.”
The utility’s last rate increase was a 4.25% hike that went into effect in February 2024, raising residents’ gas and electric bills by an average of $4.45 a month. That came after a 2022 increase of 3.85%, which was the first rate hike in eight years.
Those rate increases were tied to paying debts from the 2021 winter storm and boosting the utility’s infrastructure and technology to keep up with the growing number of residential and industrial customers in San Antonio.
CPS Energy’s announcement comes after the City Council voted to raise the San Antonio Water System’s rates by about 40 cents per month.
Tony Reames, a University of Michigan professor who served at the U.S. Department of Energy during the Biden administration, said that one-third of Americans are financially struggling and stuck in a cycle he referred to as “heat, eat or treat” — forced to choose between buying food, medicine or heating or cooling their homes.
“More people are suffering higher energy burdens now as the cost of energy continues to go up and as the cost of other necessities also increase,” he said.