CPS Energy is seeking a rate increase on customers' electric and gas bills in order to help foot the bill on several major power plant projects.

CPS Energy officials say the proposed rate increases are necessary to keep pace with San Antonio's energy needs. If adopted by the utility's board of trustees and ultimately City Council, monthly utility bills would go up nearly 5 percent. This translates to an additional $6 or $7 per month on a typical residential customer's bill.

Source: http://austin.bizjournals.com/austin/othercities/sanantonio/stories/2008/03/03/daily32.html 

CPS Energy is seeking the increase to help pay for:

• The completion of its coal-fired generating unit at Calaveras Lake and the installation of natural-gas peaking units at Braunig Lake that will produce affordable electricity;
• Environmental commitments to the region, including $500 million in emissions-control upgrades to existing power plants;
• Some $96 million in customer rebates and incentives as part of the utility's energy-efficiency program;
• Additional electric substations and power line infrastructure;
• A detailed study on the possible purchase of additional nuclear power.

The rate increase must first be approved by the CPS Energy board of trustees on March 31. From there, any rate hikes would have to be approved by City Council, which regulates the municipally owned gas and electric utility.

"Thanks to growth throughout our community and sound financial management, we haven't had to request many rate increases during the past two decades," says Norma Soliz, CPS Energy senior director of regulatory relations.

"But in response to our customers' requirements, we have committed to major projects that will help ensure reliable service and maintain our enviable position of having the lowest energy bills among the nation's 10 largest cities," Soliz adds.

CPS Energy raised rates in 2005 in order to acquire its additional 12 percent share of the South Texas Project. However, utility officials argue that the investment resulted in lower customer bills because nuclear power plants produce electricity at a lower cost than other fuels.

Soliz says CPS has made large financial commitments as part of its strategic energy plan to accommodate the city's growing energy needs long term.

"We continue to add more than 1,000 customers every month. Meanwhile, we're experiencing significant price increases in steel, concrete and other commodities necessary to complete capital construction projects," she says.

The CPS Energy Citizens Advisory Committee will hold a public meeting on the rate proposal on Tuesday, March 25, at the Villita Assembly Building. The meeting starts at 6 p.m.

CPS Energy serves 680,000 electric customers and close to 319,000 natural gas customers.

Web site: www.cpsenergy.com