SAN ANTONIO – Five months after they agreed to a policy meant to soften the blow of future CPS Energy rate hikes, some members of the San Antonio City Council want to consider bypassing it.

The city has received unexpected windfalls of CPS Energy revenue over the past two years, resulting in the council arguing how to spend it.

It is a process Councilman Manny Pelaez (D8) compared to the board game, Hungry Hungry Hippos, last year.

Around the same time, the utility has raised its rates twice in as many years. CPS Energy is planning on a third rate hike that could take effect in early 2026.

A POLICY DRAWN UP

As the owner of CPS Energy, the city gets a 14% cut of most of the utility’s revenues through a “payment in lieu of taxes,” also known as “PILOT.” It’s the city’s second-biggest revenue source, but it’s also one of the most difficult to project.

In April, the council appeared to be on board with an idea to both blunt the effect of future rate hikes and take the guesswork out of how to deal with unanticipated windfalls.

The plan revolves around sending money back to CPS Energy when it passes certain thresholds, especially related to selling energy wholesale on the state grid in “off-system sales.”

The money would be used for resiliency and reliability projects at the utility, which city staff said could help shrink the size of future CPS rate hikes. It is not clear, though, how much those rates would shrink.

With an extra $21 million expected to land in city coffers this year because of off-system sales, the policy should come into play this year.

But that’s only if the city follows through.

A POLICY THROWN OUT?

Several council members are now saying conditions have changed. They are talking about dipping into the CPS Energy revenue rather than sending it back to the utility.

This month, the Bexar County Appraisal Board approved a change that will allow a property’s value to automatically roll forward if the appraisal was successfully protested the year before. City financial staff believe that could lead to more people protesting their appraisals and less growth on the city’s property tax collections.