CPS trustee rings alarm about persistent past-due customer bills; officials say it’s manageable

CPS Energy’s finances are coming under increasing pressure as customers’ unpaid bills stack up amid this year’s sizzling temperatures. One out of five CPS customers, or roughly 160,000 accounts, are at least 30 days past due on their bill, CPS Trustee John Steen said Monday at the utility’s monthly board meeting. “We have a crisis,” he said. It’s a continuation of an issue CPS began grappling with during the pandemic, when it stopped shutting off power to customers who were behind on their bills. Since then, customers have racked up $159 million in past-due accounts — a figure that’s held steady each month this year. Tens of thousands of customers are catching up on their bills each month, interim CEO Rudy Garza said, but tens of thousands more are falling past due over the same month.

As the pandemic’s job losses waned, CPS resumed disconnecting past-due households in February, when it cut power to 1,300 homes, prompting customers to pay up or set up payment plans. Eighty five percent of those accounts were reconnected, CPS said. But it’s unable to use disconnections as a collection tool now because CPS doesn’t cut off customers’ power during a heat wave. Collecting the unpaid debt was on Steen’s mind Monday. “We’ve been assured for months and months that the customer bad debt figure would be substantially reduced upon resumption of disconnect of our residential customers,” Steen said. “I’m still respectfully waiting for a clearer picture of the financial repercussions of this customers’ debt.” On top of record heat, higher prices for natural gas — which CPS uses to fuel its power plants — are also contributing to bigger customer bills. Earlier this year, CPS received $20 million in federal funding through the American Rescue Plan Act, which it is using to clear the balances on some customers’ accounts. CPS plans to apply that money to customers’ accounts by August. In the meantime, Steen said the past-due bills are pressuring CPS’ available cash. He suggested the utility may fall short of metrics that credit rating agencies use to gauge the utility’s financial health. And that, he said, could further pressure CPS finances.