CPS Energy says it has exceeded near‑term capacity targets and outlines $1.5 billion capital budget

CPS Energy officials told the San Antonio Municipal Utilities Committee on Feb. 2025 that the utility has exceeded its short‑term capacity goals and presented a proposed $1.5 billion capital budget that funds transmission, generation conversions and an enterprise resource system.

The update matters because the utility is executing a multi‑year plan approved by its board in January 2023 to replace retiring generation and add renewable and dispatchable capacity amid rapid load growth in Texas and statewide supply uncertainty.

Corey, a CPS Energy presenter, told the committee the utility’s midterm generation plan has outperformed the targets it set in 2023. “We’ve surpassed that and achieved a little over 2,500 megawatts so far,” he said, comparing that to the roughly 830 megawatts the plan had targeted for online capacity through 2024. He also said a purchased portfolio of existing natural‑gas plants added capacity faster and at lower cost than building new units. “It cost about half as much as we had expected in our plan for the, near equivalent megawatts,” he said.

CPS’s plan, which the board approved in January 2023 after a Rate Advisory Committee review, calls for retiring or converting coal units and adding solar, wind, storage and gas. The presenter said the utility now shows roughly 6,000 megawatts coming online across the state time horizon used in their planning illustration and about 3,000 megawatts retiring, reinforcing the need for substantial investment.

Budget and financing details CPS Energy staff said the proposed capital budget is $1,500,000,000. About $638,000,000 is included for transmission (of which roughly $300,000,000 is transmission‑specific spending staff highlighted), $368,000,000 is attributed to generation work (including the start of Spruce‑2 conversion work), and approximately $170,000,000 is allocated to the enterprise resource system. Staff described the transmission component as largely recoverable through regulatory mechanisms set by the Public Utility Commission of Texas (PUC).

On operations and maintenance, staff said roughly 46% of O&M is labor and that generation fleet O&M includes costs tied to the South Texas Project (STP) nuclear asset in Bay City. The presenter emphasized that wholesale sales of the added capacity have materially improved near‑term revenue forecasts; staff said the utility now forecasts roughly $300 million net of fuel in near‑term wholesale revenues versus a prior assumption of about $40 million.

Rate outlook and board actions CPS staff told the committee the board approved the budget in January and the financing plan will appear on the full City Council consent agenda the following Thursday. The presenter said the fiscal 2026 budget does not anticipate a rate increase, but the utility will refresh forecasts after the coming summer before deciding on fiscal 2027 rate needs. “The budget that we have for fiscal 26 does not anticipate a rate increase,” he said. He repeated that decisions about future rate changes will depend on summer load and wholesale market performance.

Committee questions and technical risks Committee members pressed on a range of issues, including transmission constraints, procurement delays for transformers and switchgear, the lifespan of recent gas‑plant acquisitions, and the role of new large loads such as data centers in Texas. Benny Lee of CPS’s generation team said natural gas plants are “truly dispatchable” and noted supply‑chain timing risks (transformer lead times of multiple years in some cases). Elena Ball (CPS) said the utility is evaluating community solar solicitations and expects program expansion.

Votes at a glance The committee approved the minutes for the Jan. 28 Municipal Utilities Committee meeting by voice vote early in the session; the motion carried by voice vote (no roll‑call tally recorded in the transcript).

What’s next CPS staff will take the financing plan to the full City Council for consent agenda approval and said it will continue to report progress to the CPS Energy board and the city as plans and forecasts evolve.