DALLAS — As the nation’s largest city-owned power utility, San Antonio’s CPS Energy is preparing to put stimulus dollars to work and is currently in the process of deciding how the funding will flow into existing programs, says chief financial officer Paula Gold-Williams.
“I think we are still trying to assess what makes the most sense for us,” she said. “This is all happening very fast.”
The stimulus package’s emphasis on renewable energy and conservation dovetails with San Antonio’s ambitious “Mission Verde” that calls for a $5.3 billion investment in sustainability-related projects through 2021.
CPS’ role in Mission Verde includes the Save for Tomorrow Energy Program, or STEP, that begins this year with installation of advanced electric meters that will allow customers to monitor real-time usage of power and control consumption.
“Some of the stimulus money would be available to fund automated metering infrastructure,” Gold-Williams said. “It’s really kind of a great innovation in our industry.”
In an outline of stimulus-eligible programs for the City Council, Milton B. Lee, general manager and chief executive of CPS, envisons STEP receiving nearly $23 million this year, $38 million in 2010, and $198 million more through 2013 for a total of $259 million.
“The cost of implementing the program is considerable, and in most markets is borne by the customer base,” Lee noted. “In these economic times, alternative financing for the incentive programs, higher efficiency appliances, thermostat replacement, and other customer programs will not only enable us to save or defer new plant construction but will strongly support the mayor’s sustainability initiative.”
All of the stimulus-eligible projects for CPS come to $2 billion through 2013, according to Lee’s outline.
The largest alternative energy project on the list is the utility’s first internally developed solar plant. Its $479 million outlay over the next four years would create an estimated 200 direct and 1,700 indirect jobs.
John Bonnin, CPS manager of wholesale power marketing, said energy should be coming from the solar project to customers by early 2011.
“Companies we sign contracts with will probably begin construction of solar power plants starting in late 2009 or early 2010,” he said.
Another $600 million would go to building transmission lines from private wind farms in West Texas to CPS’ customer base. The Texas Public Utility Commission last year approved a new bond program allowing public utilities to build transmission lines to private wind generators.
In addition to the West Texas wind farms, a wind-generation facility in San Patricio County along the Gulf Coast is nearing completion. CPS expects to receive some 76.8 megawatts of power from the wind farm.
According to Matthew Johnson, researcher at the Texas office of Public Citizen, the Lone Star state leads the nation in global warming emissions and has some of the highest electric bills in the U.S.
“If global warming gases are regulated, electric costs will go up 20-30%,” Johnson testified March 9 before the Texas House Select Committee on Federal Economic Stabilization Funding. “A study for the Texas Public Utility Commission found that Texans could save 23% of the peak energy demand for half the cost of generating it, and other studies have found we could create more than 22,000 new jobs from efficiency and onsite renewables alone.”
As part of Mission Verde, CPS Energy had already formed a Sustainability Council along with a water planning committee and a solar committee before the stimulus money was even under discussion. The utility also created an aggressive materials recycling and wastewater recycling programs.
In addition to other programs and research, CPS is compiling a detailed carbon inventory.
“We believe we have a strong commitment to sustainability that’s embodied in our Vision 2020 strategic planning initiative,” deputy general manager Steve Bartley said in a presentation to the CPS board. “We will continue to firm up our sustainability goals and request approval for future funding from our board of trustees and ultimately the San Antonio City Council.”
Even before the stimulus funds, CPS was embarking on a $2.9 billion capital spending program over the next five years. Last month, the utility, through the San Antonio, issued $440 million of revenue bonds to refund its commercial paper.
The system’s revenue bonds carry ratings of AA from Standard & Poor’s, Aa1 from Moody’s Investors Service, and AA-plus from Fitch Ratings.
Conservation measures would also come to utilities like CPS through an aggressive weatherization program. Previously, only homeowners who earn no more than 125% above the poverty line qualify for weatherization aid. But under the stimulus package, those earning 200% of the designated poverty level would qualify.
“Weatherization is not only the fastest, cheapest, and cleanest form of energy, it frees up money in low- to middle-income households by lowering utility bills an average 10-15%,” according to Public Citizen. “An extra $15 per month may not seem like a lot, but for an individual dependent on Social Security income of $520 per month, it means a lot.”
