The Midweek #76: Gov. Abbott’s Worst Idea: Targeting CPS Energy

Someone is giving Texas Gov. Greg Abbott some really bad advice, built on two false premises. The first is that energy rates in other major Texas cities served by for-profit utilities are lower than rates here in San Antonio, served by CPS Energy, the nation's largest municipally owned utility. The second is that opening the San Antonio market to competing retail electric providers will lead to lower rates and better service for consumers.

Here is a simple challenge I invite the governor’s team to meet:

1. List the Texas cities where residents enjoy energy rates lower than San Antonio.
2. List the Texas cities where multiple electricity providers exist and show the savings afforded consumers as a result of free market ownership.

Finally, the governor attacking CPS Energy for its modest support of zumba classes as “woke” is both ridiculous and insulting. San Antonio suffers from epidemic levels of adult and adolescent obesity, which go hand in hand with the city’s high poverty rate and low education attainment levels. What message does it send when the governor mocks people’s choice of exercise?

San Antonio has been very well served by CPS Energy since the public utility’s inception as the San Antonio Public Service Company in 2017, and its wartime acquisition in 1942 by the city for $34 million when it became City Public Service and an agreement was reached that directs up to 14% of the utility’s revenues to the city’s General Fund each year. The utility’s name was changed to CPS Energy in 2005.

Since 1942, CPS Energy has paid $10.6 billion into city coffers, which accounts for 25-30% of the General Fund each year. The money has been a lifeline for the city, where officials are now debating how best to address a looming $158 million operating deficit. Abbott disingenuously suggests the payments are used as a city “slush fund.” He knows that is false, and that the funds pay for basic city services, including police and fire.

This gaffe by the governor is the latest in a series from Austin. The state's energy policies and strategies are a mess. Republican legislators captive to the oil and gas industry used the last two legislative sessions to target renewable energy operators. Newcomers in the oil and gas sector are greeted with a warm welcome and financial incentives, while those looking to expand the state’s production of wind, solar, and carbon capture alternatives get the cold shoulder.

Republican denial of climate change and the party’s head-in-the-ground response to the growing number of extreme weather events in the state underscore how ignorance triumphs evidence-based science in Texas. My Republican friends, and I have many, tend to look the other way when the subject is broached. Most, of course, know better. Yet it's taboo in certain circles to even question, much less challenge such backwards posturing by the party’s top dogs.

Still, even ​the governor and other prominent Republican officeholders can read public opinion and now are reversing course​ and starting to oppose some of their own handiwork carried out on behalf of the oil and gas industry and on behalf of data center investors that require energy and water demands that vastly exceed supply and contribute to the state’s worsening air quality.

The next legislative session undoubtedly will include work to undo the damage done in previous legislative sessions, although faceless agency bureaucrats will likely be blamed beforehand. No mention will be made of the lobbyists who have a direct hand in drafting industry-friendly bills that become law in Texas. Like Winter Storm Uri in 2021, fault will be found with agency heads and regulators, not the politicians who appointed them and generally have ignored years of warnings about the need for prescriptive legislative action to address growing risk.

Republicans, including Lt. Gov. Dan Patrick and others of his party in the Texas Senate, have waited nearly a full year to suddenly reverse course and express opposition to the state’s ridiculous $33 billion plan to build three 765-kV transmission lines to carry electricity from East to West Texas through the environmentally sensitive Hill Country and Central and Southwest Texas. The lines are intended to meet the growing needs of the oil and gas industry in West Texas and the Permian Basin.

I've spoken to more than 50 people who own ranches or businesses, almost all Republicans, in San Antonio and Central and Southwest Texas in recent months about their opposition to the project that would have required CPS Energy to provide electricity via a new high voltage line running from one of its Bexar County substations through multiple river basins, prehistoric and historic sites, and the holdings of many prominent ranchers. The line would extend all the way to Fort Davis.

The governor in his recent criticism of CPS Energy had nothing to say about the cost to ratepayers here from Winter Storm Uri or the future costs that would result from the new transmission line's construction and operation.

At my last check, many thousands of people registered their opposition with the state’s electric grid managers and utility regulators to halt the controversial project, and more than 100 people testified at a recent legislative hearing that dragged on for 15 hours, virtually all in opposition.

In his latest pronouncement, ​Abbott has reversed course on the rush to build new data centers​ in Texas, declaring a moratorium on the explosive growth until legislators can return in January and begin to unravel the billions of dollars in incentives and lost tax revenue past legislation made possible. They’ll also have to address the energy and water needs of new data centers, else the looming water crisis now confronting Corpus Christi will spread to other parts of the state.

Republicans are equally worked up across the western reaches of the state by President Trump’s $46.5 billion boondoggle to build a wall through Big Bend National Park and Big Bend Ranch State Park and the borderlands between the two vast parks. Five Republican county judges and sheriffs in the Big Bend area all went on record opposing the project. Several wealthy Republican ranchers in the region told me they reached out directly to the governor, his staff, the two senators from Texas and various congressional representatives in an effort to kill a project that addresses a nonexistent problem. The apparent compromise, never publicly articulated, is for contractors to build the wall across privately owned land while using less intrusive methods in the parklands. That is now happening to the chagrin of locals.

When the work is finished, the wasted billions will do nothing except damage the surrounding environment, harm wildlife, and desecrate sensitive prehistoric sites. But Trump and his allies will have something to brag about at political rallies while the flow of migrants through the mountain and canyon desert country will remain negligible. Local law enforcement will continue to use drones and other technology to identify and detain the occasional migrant attempting a crossing.

Gov. Abbott faces real challenges in this fast-growing state where infrastructure needs are badly outpaced by population growth. If you live in Central or South Texas you can read about many of those challenges in ​The Austin-San Antonio Megaregion: Opportunity and Challenge in the Lone Star State​ that I co-authored with former San Antonio mayor and HUD secretary Henry Cisneros and David Hendricks.

The book has spurred the creation of the Central Texas Alliance to advocate for positive action on the part of state officeholders to address pressing concerns in the realms of housing, transportation, energy, water, and public education. The question is whether the controlling Republican officeholders will dedicate much of the coming legislative session to divisive culture issues or whether lawmakers will tackle real problems.

CPS Energy isn’t one of the problems, governor. Neither is zumba. Let’s get real.