CPS Energy Pushes Its Next Rate Increase Into Next Year on a $115 Million Federal Incentive
San Antonio's city-owned utility will not seek a rate increase this year: a $115 million federal nuclear production incentive and other favorable circumstances let CPS Energy absorb a wholesale shortfall and storm costs, and its next rate review is deferred until mid-2027.
CPS Energy has put off its next rate increase until next year, after what the San Antonio Report described as favorable circumstances — including a $115 million federal incentive tied to nuclear production — gave the city-owned utility room to absorb a difficult year without going back to customers. Reporting on the utility's finances put the headwinds at a $100 million shortfall in wholesale revenue, a $40 million decline in retail sales during mild weather, and $20 million to $30 million in unexpected storm damage, all absorbed without a rate hike.
The breathing room was built earlier in the year. CPS Energy's board approved a budget on March 30 covering February 2026 through January 2027 that carries a $50 million funding gap but, after pushback from City Council members, does not assume a rate increase to close it. Mayor Gina Ortiz Jones said at the time that the earlier wording — a budget that assumed a rate increase — had been jarring given everything residents are facing, and welcomed the utility coming before the council, its owner, to explain the change. Rate changes at CPS Energy require a City Council vote.
On Oct. 8 the utility announced it would defer its next rate review until mid-2027 rather than move forward with a request for higher customer rates. The reprieve is a deferral, not a cancellation: the $50 million gap still has to be closed, the utility continues to make large infrastructure investments, and rate discussions are expected to resume next year. For San Antonio households, the practical news is simpler — the electric and gas rates in place now stay in place through this budget year.
