CPS Energy skips 2026 rate hike after $170 million in savings covers storm costs

CPS Energy will not raise rates for customers in San Antonio this year, a decision driven by $170 million in unexpected financial gains.

The utility’s staff presented the decision to the board of directors on Monday. Chief Financial Officer Debra Wainscott stated that favorable conditions allowed the company to avoid a rate request for the current period. She noted that while the company is skipping the increase now, leadership expects to revisit the topic for the coming year.

The financial cushion comes from three specific areas. The company received a $115 million nuclear production incentive from the federal government. Additionally, a shift in the timeline for a transmission cost study is projected to add roughly $50 million to transmission revenue. The company also anticipates saving $5 million on debt payments due to lower interest rates and premiums.

These inflows offset substantial losses incurred earlier in the year. Mild weather reduced retail energy sales by $40 million and wholesale revenue by $100 million. Storms and outages added an extra $20 million to $30 million in operational costs. CPS Energy had projected a budget shortfall of at least $50 million when it presented its plan in March.

The decision to hold rates steady follows a period of community discussion regarding affordability. The city owns the utility, and Mayor Gina Ortiz Jones, who serves on the board, confirmed that infrastructure needs did not require an immediate increase. She asked, 'If the infrastructure needed it, CPS would have asked for it.' Interim CEO Frank Almaraz confirmed the company no longer needed the additional revenue this year.

Wainscott explained that large utilities must maintain strong financial metrics to borrow money at favorable rates. She warned that skipping the rate request is straining these indicators. 'The fact that we didn't go for a rate request is still putting pressure on our metrics,' she said. 'We're pushing the top of that range here. So it's still very, very challenging.'

CPS Energy originally planned to request rate increases every other year starting in 2021. The company had not implemented a request since 2024. With rates remaining unchanged, the utility will monitor its financial position as it prepares for future budget cycles.