As the first major cold of winter is expected to move into San Antonio earlier this weekend, CPS Energy is reassuring residents who are delaying payments that they won’t be disconnected during bouts of extreme winter weather, despite the utility company’s growing financial concerns.
Utilities officials said at CPS Energy’s monthly board of trustees meeting on Monday, as of the end of October, CPS Energy owed roughly $207.5 million from overdue customers – that’s a total of 128.3 percent in CPS Energy’s outstanding balances. It continued to rise by more than a million dollars. debt in april due to the intense heat of this summer.
Still, the municipal utility company said it will follow the usual holiday tradition and stop disconnecting due to holidays on the Friday before Christmas and the Monday after Christmas, said Christine Patmon, spokesperson for CPS Energy. President and CEO Rudy Garza told the board of trustees that it will also halt disconnections due to the cold front expected to drop below freezing.
“We’ll probably stop the disconnections on Thursday and, assuming temperatures rise again, we’ll probably restart on the 27th after Christmas,” Garza said. “These are the times we stopped disconnecting for security reasons.”
Deana Hardwick, VP of Customer Strategy, said that after the pandemic and bouts of extreme heat this summer, nearly 20% of the utility’s customers are behind on their bills by at least 30 days. Hardwick noted that CPS Energy completed roughly 12,000 disconnects in October, adding that the utility is doing everything it can to avoid interrupting its customers. CPS Energy representatives are making phone calls, leaving door hangers and even knocking on doorknobs to assist customers outside of CPS Energy’s hours of operation, he said.
Chad Hoopingarner, the public agency’s vice president of financial planning, said the biggest concern about ongoing debt is that it puts the company’s good credit ratings at risk. CPS Energy is regularly evaluated by the three major credit rating agencies that measure the risk associated with lending to an organization such as CPS Energy. These ratings help determine interest rates on utility debt.
“When we lend at a higher interest rate, that adds to the budget and clients rates go up,” Hoopingarner said.
Utilities officials have expressed confidence that they can take care of CPS Energy’s finances before the agency’s fiscal year ends in January. Hoopingarner said that credit rating agencies would not be surprised by any of the metrics of public service.
“It’s not new they’re hearing from us – they’re hearing it from every public agency across the country,” he said.
The facility staff also assured the trustees that they are prepared for the below-average temperatures expected this weekend and the above-average energy demand that may result from it. Benny Ethridge, the facility’s vice president of power supply, CPS Energy staff has prepared their facilities for the winter to withstand subzero temperatures and high winds of up to 30 mph.
It’s been almost two years since Texas faced the icy wrath of Winter Storm Uri, which left millions of people without power for days across the state and killed hundreds of Texans. While the cold front is expected to plunge Texas into the deep freeze, no precipitation is expected in Central Texas.
After Monday’s board meeting, Ethridge told reporters that the utility company is operating with a 27% reserve margin, meaning it has the ability to supply much more energy than expected demand for weather this weekend.
“I’m not worried; we’ve done a lot of work and upgraded our systems and everyone is focused,” said Ethridge. “I think the team did a good job preparing, and now we’re doing what we’re ready to do.”
Brian Alonzo, the organization’s in-house meteorologist, said this week’s cold front will bring “dry cold”, with cold weather and no snow, sleet or rain expected. Alonzo noted that starting from Thursday night until the early hours of Monday morning, it is expected to drop below zero, but rise above zero during the day. “The wind is expected to blow between 20 and 30 miles per hour,” he said.
Garza expressed confidence in both the Texas grid and the facility’s ability to provide electricity in cold weather.
“At the state level, we are expected to have ample resources for this special event,” he said. “But still, I wanted to address this just to make sure you know we’re doing what we have to do to be ready.”
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