CPS Energy took its case for rate increases to the public Monday night and left with a few lumps.
The utility wants to increase rates 7.5 percent for electricity and 8.5 percent for gas. Total impact on power bills would be just over 4 percent. The money would help the cash-strapped utility finish the Spruce 2 coal plant and two natural gas units. It would also fund a number of environmental and infrastructure projects.
“We are entering a new cycle of major infrastructure,” acting General Manager Jelynne LeBlanc-Burley told the audience at the Villita Assembly Building. “We have significant environmental and sustainability projects ahead of us.”
Eight of the 10 people who commented Monday were critical of the proposed rate increases. Some said they didn't trust the utility in light of the recent scandal over nuclear project cost estimates that prompted the resignations of two high-level CPS executives.
“The working class, on the back of which you guys are riding, is hurting,” said Raymond Zavala. “But you can only go so far.”
CPS' board will vote on the proposal Wednesday. The City Council will take up the issue Feb. 18.
The increase would be the first in a series the utility said is necessary every other year for the next decade or so.
CPS last increased rates in 2008. The utility asked for 5 percent that year, but the City Council reduced it to 3.5 percent when the portion of the increase that was slated for the nuclear project became controversial. That was the first rate increase in 17 years.
LeBlanc-Burley said the smaller-than-requested increase in 2008 and the recession have left the utility in need of more money despite recent steps to reduce costs. These include hiring and wage freezes and postponing street-lighting and tree-trimming projects.
“Those kind of actions are not sustainable when you talk about providing reliable energy,” said LeBlanc-Burley, who has taken over CPS since the nuclear debacle.
CPS has also deferred major projects such as environmental upgrades to the Deely coal plants and a new advanced metering system.
LeBlanc-Burley was unable to sway Margaret Day, chairwoman of the Alamo Group of the Sierra Club.
Day said the utility is not trustworthy and she wanted the city to appoint an outside expert to investigate CPS' finances. She also said CPS should make available to the public all the discovery in its lawsuit against Nuclear Innovation North America, CPS' partner in the proposed nuclear project.
Several speakers also took issue with the fact that CPS was proposing to use the rate increase to help pay for Spruce 2.
The $1 billion plant is supposed to be finished later this year. Construction began on the coal plant in 2006 and utility officials say they have a fixed-price contract. This has prompted questions about why CPS still needs rate increases to fund bond issues to help pay for the plant.
LeBlanc-Burley said that although the Spruce 2 is being built with a fixed-price contract, it was not financed all at once and still needs to be paid off.
She said there was an additional $40 million expense but the plant is still within budget. That increase stemmed from a claim of lost production made by the contractor because of bad weather in 2008.
If approved, the rate increases would take effect March 1 and raise $99 million this year and $110 million next.
