AUSTIN, Texas (Texas Insider Report) — Customers of CPS Energy in San Antonio – the nation’s largest municipally-owned electric and natural gas utility – may have to pay millions of dollars more as CPS amasses legal fees that will likely be passed on to ratepayers, according to a legal analysis that recently appeared in The Texas Lawyer.
This case stems from February 2021's Winter Storm Uri, which saw prices for natural gas spike because of increased natural gas demand and the inability for many Texas pipelines to operate during the cold snap.
According to Houston lawyer, Chris Carmona,
“Rather than working with suppliers to find solutions, CPS has chosen to take a controversial legal position that has cost ratepayers millions in legal fees... current and future ratepayers will ultimately have to pay the price of questionable decision making as the utility company continues to use the courts to delay payments to suppliers.
"This calls into question the wisdom of this entire legal strategy.”
"This calls into question the wisdom of this entire legal strategy.”
CPS was unprepared for the extreme weather, so it was forced to pay higher spot prices to power its electrical grid. Costs that are typically passed on to customers.
After the storm, CPS’s President & CEO Paula Gold-Williams was forced to resign (albeit with a million dollar payout), but the company is still on the hook for more than $585 million in fuel bills – which are accruing interest daily – and had already spent nearly $17 million in legal fees.
According to Mr. Carmona,
“There is no reason for the utility to keep their customers in the dark and continue adding costs.
"It must drop its delay strategy and work with remaining suppliers to find a workable solution,” Carmona said.
"It must drop its delay strategy and work with remaining suppliers to find a workable solution,” Carmona said.
- Read Mr. Carmona’s full legal analysis here.
