In an effort to curb future energy rate increases for San Antonio residents, the city's financial whizzes have cooked up a strategy that involves injecting unexpected utility profits right back where they came from. CPS Energy, the city's cash cow, has been delivering high profits, leading to a surplus in the city coffers. Now, city leaders are eyeing these extra dollars as a way to dampen the blow of rate hikes on consumers.

As reported by the San Antonio Report, these funds, stemming from windfalls, could be reallocated by the City Council's new plans under discussion. The City's Chief Financial Officer Ben Gorzell laid out a policy that would cap the city's take from CPS Energy's off-system energy sales at $10 million beyond the budgeted amount. Pouring excess revenue into capital projects that usually shoulder part of the blame for rate increases is the proposed approach. Gorzell suggested that this strategy could stash away $4.9 million already this year to help block future rate hikes.

Meanwhile, conversations in the council chambers were ablaze with different ideas for handling the windfall. On the other side of the debate, KSAT detailed proposals to automatically divert 80% of any revenue exceeding projections by more than 10% to CPS Energy's pocket for utility resilience and reliability, while dropping the remaining 20% into the city’s Resiliency, Energy Efficiency, & Sustainability (REES) fund.

Gorzell, speaking to reporters, didn't pin an exact number but highlighted there's a significant chance to cut back on rate hike necessities. "I mean, if that bucket’s filling up on our side, that means that the other side of that is happening on the CPS side, too," he mentioned. Skepticism didn't escape some council members who worried that redistributing the surplus might not put a serious dent in reducing future rate hikes.

Political dynamics were intrinsic to this financial saga too, with Councilman Manny Pelaez, a 2025 mayoral candidate, articulating the move as a defense against state-level threats to city autonomy over its utilities. Proposed state legislation last session had city-owned utilities like CPS Energy in its crosshairs, proposing restrictions on transfers to the city's general fund during rate hike requests, but the bill ultimately went nowhere.

Trudging half way through the fiscal year, San Antonio has collected $18.5 million more from CPS Energy than expected, but according to Gorzell, city leaders don't anticipate reaching the 10% threshold which would necessitate a redistribution under the proposed measures. Yet, at least $5 million is set to churn back to CPS due to the new $10 million cap on off-system sales set in January.