This article originally appeared in the San Antonio Express-News here. It is being reposted with permission of the author.
As Texas continues to reel from the fatal floods in the Hill Country, we are reminded of past natural disasters that Texas has endured and of similar state and local responses.
For many in San Antonio, the mention of February 2021 brings back chilling memories of living without power and water. Winter Storm Uri plunged Texas into a rare deep freeze that exposed vulnerabilities that residents are still reckoning with today.
The state’s electrical grid nearly buckled under the unprecedented demand, while limited natural gas supply and frozen power plant equipment knocked out heating infrastructure. With thousands of homes losing electricity for hours and days in subfreezing temperatures, the city-owned utility company, CPS Energy, was forced to step up in a big way.
To serve the city amid freezing temperatures, CPS spent around $850 million on energy resources the week of the storm. The CPS president and CEO at the time, Paula Gold-Williams, cited an estimate of closer to $1 billion — $800 million in natural gas costs and $200 million in electricity.
Now, four years later, those energy decisions are still debated and CPS is being called to account. Recent reporting shows that CPS still owes energy suppliers approximately $350 million from its February 2021 purchases, not counting the interest that is piling up on these unpaid bills.
Even more surprising to Texans is that the utility company is not backing down on its refusal to pay. CPS has been paying its lawyers millions of dollars and fighting in court for more than four years to avoid paying its bills to the two Texas pipeline companies that sold to them — Dallas-based Energy Transfer and Houston-based Enterprise Product Partners.
First and foremost, CPS’ actions in the aftermath of Uri and in the wake of its incurring debt fly in the face of what it means to be a Texan.
Texans have always understood what it means to do good business, and our innovation and bold decision-making — especially in the energy sector — is built on a set of core values. The business culture is built on collaboration and long-term relationships that strengthen this network.
For CPS to avoid its financial obligations to two fellow Texas-based companies is unacceptable. CPS’ failure is a blatant erosion of the foundation of the Texas energy model, and it is dangerous. Turning to the courts rather than honoring market outcomes will decrease confidence in the system that Texas energy policy has been built.
Along that vein, this entire situation has set an increasingly bad precedent within the industry.
Questions of contractual integrity, market instability and legal uncertainty will be just some of the negative consequences that arise. Even worse is the cost to the consumer. CPS’ costs are passed on to San Antonians, and the longer CPS refuses to pay what it owes, the bigger the tab gets.Avoiding responsibility will also discourage suppliers from doing business with utilities in the face of uncommon and stressful circumstances.
Unsurprisingly, it will again be Texas residents who suffer the most.
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