Podcast San Antonio

PODCAST: CPS Energy vs the People of San Antonio

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Lexy Garcia of Texas Rising introducing speakers outside the CPS Energy headquarters. Darby Riley, who updated the group on the utility’s legal efforts to avoid forced reform through public petition, is at center with an evictions sign. Image: Greg Harman

Several incoming San Antonio Council members want to freeze utility disconnections, reform CPS rates, and close the Spruce coal plant. They’d do well to listen to the attorney fighting CPS Energy’s lawsuit to eliminate the people’s right to reform the utility by petition.

Click Play above to listen to Episode 20: Darby Riley and the CPS Energy Lawsuit

Greg Harman

On May 24, a group of community members gathered at the new multi million-dollar headquarters of City-owned CPS Energy to oppose a return to policies and practices that each year cut off tens of thousands of San Antonio residents from electric and gas service due to an inability to pay. Disconnections reached nearly 100,000 prior to a freeze on the policy a year ago inspired by the COVID-19 crisis. The group also objected—in large banner format, dropped from the utility’s skywalk—to rate hikes until our rate structure itself is fair. Under the current rate structure, working families are paying more per kilowatt hour than the heaviest users, effectively subsidizing price breaks for our biggest polluters.

While CPS CEO Paula Gold-Williams suggested at that days’ meeting that the utility will be seeking a rate hike from City Council in the fall, CPS can theoretically restart disconnections at any time.

A rate increase will have to garner favorable vote at City Council. Those on the grassy banks outside the board room are calling on San Antonio’s City Council to reject that request when it comes. Roughly 30 local organizations have signed on to a document including the demand in a string of energy-justice policy recommendations.

Speaking outside CPS Energy’s offices, local attorney Darby Riley updated the group about his appeal contesting CPS Energy’s lawsuit intended to close down the right of the people to petition for utility reform (including an unexpected support from the Office of the State Attorney General). At Deceleration, we wanted to hear more and invited Riley to elaborate via podcast interview.

Community demand to freeze disconnections and a planned rate hike. May, 2021.

In its formative documents, CPS Energy was given broad authority over the day-to-day running of the business. But the authority is not absolute. Rate setting is one of two understood checks Council has over CPS Energy. The other is in the appointment/rejection of CPS Board members. The struggle over the people’s right to manage our utility hit a flash point after the launch of the Recall CPS initiative petition in late 2020. In theory, a successful Recall would have forced many fundamental reforms, including closing the City’s last remaining coal plant by 2030 and making City Council the effective Board of Trustees.

But within weeks of the petition’s launch, CPS’s attorneys filed legal papers to shore up the utility’s power—both against the Recall effort and any future effort of its kind. They didn’t just want a judge to dismiss the Recall CPS effort because it allegedly infringed upon the rights of the finance house who had floated the utility billions in credit. They sought a “permanent injunction” on any similar actions in the future.

The Recall effort assumed the people of San Antonio who own CPS Energy have the right to reform it. To date, however, the message of state district court judges is that CPS Energy is actually the property of its bondholders—that is, the banks propping up the utility. Riley’s message is that even in this period of uncertainty over the ability to reform CPS by petition tactics lie opportunities for progressive change, including in direct policy making by Council.

This question is particularly hot as several of the new Council members just elected campaigned on CPS Energy reform and an early retirement for JK Spruce coal plant. For instance, D1’s Mario Bravo, D2’s Jalen McKee-Rodriguez, and D5’s Teri Castillo all support maintaining a disconnection moratorium through 2021. They all support reducing rates for “low-income, medically vulnerable populations, and low-energy use customers.” They all support closing Spruce by 2030.

{See the candidates’ full answers in the Climate Action SA candidate survey.}

All of this is possible.

As laid out in CPS’s formative documents:

The Board of trustees, in exercising the management powers granted herein, will ensure that policies adopted affecting research, development, and corporate planning will be consistent with City Council policy, and policies adopted by the Board of Trustees pertaining to such matters will be subject to City Council review.

This is the reason we haven’t heard any CPS Board member or staffer suggest they aren’t bound by the carbon-reduction goals of San Antonio’s Climate Action and Adaptation Plan. The CAAP is City policy and CPS is bound thereby.

While Darby continues to fight in the courts for the popular right to petition for utility reform, the world of CPS remains in motion. As you will hear in our interview, Riley specifically asked that we highlight this element of Section 19 of the current Bond Ordinance, which outlines CPS’s authorities. It will be of interest to anyone fed up with the historical and current behaviors of the board.

Notwithstanding any of the foregoing provisions as contained in this Section or in any other section of this Ordinance pertaining to the appointment or selection of Trustees,  the City Council reserves unto itself the absolute right at any time upon passage of an ordinance approved by a majority vote of its members to change the method of selection of and appointment to the Board of Trustees to direct selection of the City Council, with such change of method to direct selection being at the sole option of the City Council without approval of any persons, party, holder of Parity Bonds, or the Board of Trustees.

These two sections suggest everything the petition sought to accomplish could be done directly by Council.

“Divesting from fossil fuels by 2040? Implementing equity in rate setting? Maximizing energy efficiency by rate structures and other actions? I would say yes,” Riley wrote by email. “Council has power to direct CPS Energy policy on all those items which were in the Recall CPS petition.”

Full text of Section 19 of the current Bond Ordinance is below.

You can support Riley’s work by contacting him here:

Darby Riley
Riley & Riley, Attorneys at Law
320 Lexington Avenue, San Antonio, Texas 78215
P: 210-225-7236 ext. 0 | Fax:  210-227-7907

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