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San Antonio Water System plans to forgive a majority of the outstanding debt of residential customers in its payment plan. CPS isn’t following along.
Not counting the days of freezing February weather that hundreds of thousands of San Antonio residents were forced to shiver through without electricity (or water), utility service has been unusually reliable since March 2020. That’s when both the San Antonio Water System and CPS Energy swore off longstanding policies of forced disconnections for delinquent bills out of respect for the COVID-19 pandemic and the economic hammer it leveled on the city. Prior to COVID, powerlessness was an epidemic condition, with tens of thousands of families severed from power or water year after year for the inability to keep up with their bills.
For many thousands, that reliable service likely ends today with both SAWS and CPS Energy returning to disconnections of residential customers. According to CPS, 21,516 residential accounts with a collective $29.8 million past due are being targeted for possible disconnection. Another 44,000 residents owing a collective $33 million become vulnerable under CPS’s approach on November 1. Despite calls from community advocates to maintain the pause, despite COVID’s long tail with the current Delta variant still claiming lives and hampering a return to the lives we’d known before, Mayor Ron Nirenberg and City Council have acquiesced to CPS.
The debate for most in elected leadership hasn’t been whether disconnections should happen but how they will be executed and if their damage can be minimized. This should have been a much better discussion.
[RELATED: “CPS Must Stop Cutting Off People’s Power—For Good“]
At the recently formed Municipal Utility Committee‘s meeting this week it was clear at least these Councilmembers preferred the approach SAWS is taking in one small aspect of the disconnection crisis. SAWS auto-enrolls delinquent accounts in its payment programs, according to Mary Bailey, VP of customer experience. CPS, by comparison, has an opt-in policy which requires customers to reach out to the utility. The only way to avoid disconnection is to join one of their repayment programs.
Following Bailey’s presentation (see excerpt below), Rudy Garza, CPS’s head of customer engagement, presented on CPS policy and elevated the range of payment assistance programs the utility offers.
MUC Committee Chair and Councilmember John Courage (D9) challenged him on the enrollment question.
“You’re saying you don’t want to force people to pay but then again you’re going to cut them off,” said Courage of the looming disconnections. “You may be doing them a favor by putting them into a mandatory payment program rather than allowing them to just flounder around not knowing what to do and just getting cut off.”
Garza said that he questioned how reliably folks will continue to pay bills they didn’t agree to in the first place. “I would rather work out a deal that our customers agreed to so that they understand what the expectation is so we can keep them in a good place,” he said.
But Committee members Ana Sandoval (D7) and Melissa Cabello Havrda (D6) sided with Courage, asking Garza to communicate the committee’s preference to the CPS Energy Board of Trustees.
Councilmember Mario Bravo (D1) joined in with similar thoughts, as well.
By this point, Garza was clearly all out of patient redirection, offering flatly: “Councilman, I understand that is the perspective of this committee.”
The strange thing is that SAWS’s big brag isn’t even really about how it is getting past due debt into current billing cycles. The big brag—what should have excited committee members clearly interested in minimizing harm—is SAWS’s commitment to debt forgiveness.
The water utility is planning to write off more than 60 percent of the majority of residential debt for those who participate in their repayment program. Here’s how it works: For those with past-due balances of COVID-era debt under $2,000, what they owe is split into 48 monthly payments. However, after 18 months (or after paying off 37.5-percent of their total, whichever comes first) SAWS will absorb the balance.
Additionally, SAWS is forgiving 100 percent of any debt accrued that is shown to be connected to a water leak.
Anacua Garcia of the Southwest Workers Union said she and others recently asked CPS about the potential for debt forgiveness rather than its complicated array of payment arrangements that leaves customers saddled with two monthly payments plus a penalty. She said they were told that the utility’s bond agreements don’t allow for it.
Garza suggested one difference between the two utilities is SAWS financial footing.
“The biggest difference in our situation and SAWS is they have been in for multiple rate increases where we have had none so their financial position is just much different than ours,” he said.
It’s a message that supports CPS’s gathering press for a rate increase expected to arrive before City Council for a vote late this year or (according to a new projection by the City Manager’s Office) in early January. But it’s also true that SAWS has benefited from a string of annual rate increases to (in large part) help pay down the multi billion-dollar Vista Ridge water pipeline.
When asked about the origin of the $40M reserve SAWS is tapping to pay off customers’s debt, Bailey attributed it to good accounting practices. “SAWS evaluates the collectability of past due accounts and establishes a reserve for the portion of the unpaid balance that we believe will likely not be collected. This is required by accounting standards.” she told Deceleration. “The reserve was funded by charges against SAWS revenues from the months between March 2020 and August 2021.”
Garza said that CPS continues to work with the state and City to access additional federal American Rescue Plan Act funding before the disconnection process reaches those already on assistance programs in January of 2022. Those already enrolled in payment assistance programs who still qualify for disconnection number over 15,000.
Anacua Garcia has helped lead outreach into some of San Antonio’s most impacted communities—including phone banking and via drive-through or walk-in utility clinics at SWU. She said the outreach CPS has done to date fails to consider the “barriers community members face in regards to literacy, comprehension, and internet connectivity.”
“Like much of the aftermath since the COVID-19 pandemic, it remains up to community members practicing mutual aid to provide compassion, patience, and lifelines in order to ensure the most vulnerable don’t get left behind or in the dark,” she said.
Here’s the CPS Energy schedule for upcoming disconnections.