set to expand its San Antonio plant<\/a>, with another assist from CPS. The utility recently offered $16.2 million in rate reductions as part of a $181 million package that helped persuade Toyota to bring Tacoma production back to the plant. The company is expected to spend $3.6 billion on the expansion.\u00a0\u00a0<\/p>\nMarquez is worried the governor\u2019s push to open municipally owned utilities to competition\u00a0could result in CPS being less of a force in attracting out-of-town companies to San Antonio.\u00a0<\/p>\n
Abbott caught locals by surprise Tuesday when he announced he wanted to \u201cend the monopoly control that cities like Austin and San Antonio have over electricity services\u201d and give customers a choice of power providers. He said introducing competition could save San Antonians up to 13% on their monthly electricity bills, though he didn\u2019t say how he arrived at that percentage.\u00a0<\/p>\n
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He also wants to stop utilities from transferring revenue to cities\u2019 coffers. CPS sends 14% of its annual gross revenue to the city. This year, that money makes up nearly 30%, or $504 million, of San Antonio\u2019s $1.7 billion general fund, which pays for services such as emergency first-responders, street repairs and senior centers.<\/p>\n
Abbott said he will\u00a0ask lawmakers to take up his proposal in the 2027 Texas Legislature.<\/p>\n
It\u2019s unclear how serious the governor is about advancing his plan, which comes as he\u2019s running for reelection and taking heat for the proliferation of data centers across the state.\u00a0<\/p>\n
But it alarmed CPS leaders, city officials and business executives, who said opening the utility to competition and ending revenue transfers to the general fund could threaten the city\u2019s finances and hinder its ability to attract companies and jobs.<\/p>\n
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The thinking is that if CPS has to fight for customers in the San Antonio area\u00a0\u2014 and potentially loses market share and revenue even as its debt load and many of its fixed costs remain the same\u00a0\u2014 it would be less able to cut deals like the one that helped win Toyota.\u00a0<\/p>\n
CPS said in a statement that \u201cany threat to the not-for-profit municipal model is a threat to all customers,\u201d while City Manager Erik Walsh said that model has benefited San Antonio and Texas by supporting the statewide electrical grid\u00a0\u2014 in addition\u00a0to contributing to city services.\u00a0<\/p>\n
The city and CPS will demonstrate \u201cthe benefits to our community and the city\u2019s responsible stewardship of our utility\u201d ahead of the legislative session, Walsh said.<\/p>\n
The Texas Public Power Association, a trade group representing community-owned electric utilities, said Abbott\u2019s plan could actually increase customers\u2019 bills and reduce the quality of CPS\u2019 service. Rates charged by municipally owned utilities are usually below the state average and lower than or on par with prices in deregulated areas, the association said.\u00a0<\/p>\n
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CPS says data shows its residential customers\u2019 average monthly bills for electricity and natural gas, at $191.77, were lower than what ratepayers were paying in Dallas, Austin, Houston, El Paso, Corpus Christi and Houston in the 12-month period ending April 31.<\/p>\n
Comparisons for business customers were not immediately available.<\/p>\n
Bracing for what\u2019s next<\/p>\n
Industry trade groups said Abbott\u2019s plan, if it becomes state law, would be a blow to their members, who include local manufacturers, theme parks, hospital systems and retailers.<\/p>\n
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\u201cReliable, affordable energy is critical to manufacturers and the region\u2019s economic competitiveness,\u201d particularly as companies are facing steeper costs stemming from inflation and tariffs, said\u00a0Dan Yoxall, CEO of the San Antonio Manufacturers Association, which represents Toyota and other companies.<\/p>\n
\u201cCPS\u2019 costs to manufacturers are stable and competitive\u00a0\u2014 important factors as businesses plan their budgets,\u201d he added. \u201cIt is consistently charging the lowest combined electric and gas rates of any major Texas city.\u201d<\/p>\n
Securing facilities that bring thousands of jobs to San Antonio depends on offering affordable, reliable electricity, which CPS is motivated to provide because it\u2019s accountable to the public, said Ron\u00a0Nirenberg, who sat on CPS\u2019 board of trustees when he was mayor from 2017 to 2025 and is currently running for Bexar County judge.<\/p>\n
\u201cIt is as fundamental a part of the business recruitment, expansion and retention equation as the availability of talent and quality of life,\u201d Nirenberg said.<\/p>\n
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Ed Kelley, a former CEO of USAA Real Estate who served on CPS\u2019 board from 2011 to early 2022, said the utility has historically outperformed others in the industry with its prices and customer satisfaction ratings. CPS\u2019 contribution to the city\u2019s budget also means that San Antonio doesn\u2019t have to resort to increasing property taxes to make up for that revenue, Kelley said.<\/p>\n
\u201cThere is always a danger when you have a service like CPS that\u2019s not competing\u00a0\u2014 there\u2019s always the risk that will get out of hand and customers will suffer,\u201d Kelley said. \u201cBut that has never happened at CPS.\u201d<\/p>\n
CPS is one of the largest municipally owned electric utilities in the U.S., with assets totaling $18 billion. The utility said in a recent financial report that it brought in income of $195 million on revenue of $4.1 billion in the 12-month period ending in April.<\/p>\n
Private-sector electricity providers who answer to shareholders are motivated to drive up profit margins and pay out dividends. They\u00a0are primarily interested in their most power-hungry customers because that\u2019s who generates the most money, whereas CPS \u201cserves everyone\u2019s needs, from the large corporate user to the person who\u2019s really struggling to keep the lights on,\u201d Marquez said.\u00a0<\/p>\n
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But former CPS trustee John Steen, who served on the utility\u2019s board from 2016 to early 2026,\u00a0said Abbott\u2019s proposal is worth considering.\u00a0<\/p>\n
The utility holds about $10 billion in debt. It passes the costs of borrowing money\u00a0to customers. That means it \u201clacks the profit-driven pressure to cut waste\u201d because\u00a0ratepayers can pick up the tab,\u00a0Steen said.<\/p>\n
While serving on CPS\u2019 board, Steen tried to\u00a0push the utility to operate more like a business. If it did that, it likely wouldn\u2019t prioritize its energy-efficiency program, which offers rebates and other perks in efforts to reduce power use and harmful emissions,\u00a0Steen said. It also might not need to offer payment programs for customers struggling with their bills if it was more focused on controlling costs.<\/p>\n
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\u201cGovernor Abbott is looking to shake things up by introducing competition, and with the goal of reducing the financial burden on CPS customers. That\u2019s a good thing,\u201d Steen said. \u201cI look forward to seeing what he comes up with.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Gov. Greg Abbott is taking aim at CPS Energy, San Antonio\u2019s electric and gas provider. Sam Owens\/San Antonio…\n","protected":false},"author":2,"featured_media":402331,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[82,84,83],"class_list":["post-402330","post","type-post","status-publish","format-standard","has-post-thumbnail","category-san-antonio","tag-san-antonio","tag-san-antonio-headlines","tag-san-antonio-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/402330","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/comments?post=402330"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/402330\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media\/402331"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media?parent=402330"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/categories?post=402330"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/tags?post=402330"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}