Discussions between the trustees — namely between the sole conservative voice on the board, John Steen, and his four fellow board members — grew heated Monday as the group discussed the utility’s shifting generation portfolio.about CPS Energy’s financial standing in the wake of the Covid-19 pandemic and Winter Storm Uri, said he is troubled with recent spending by the utility to bring additional megawatts under its ownership.
The utility’s four other trustees and several members of the staff contested Steen’s claim Monday that CPS Energy is “on a path to becoming over-leveraged,” referencing new credit rating outlooks issued in May by Fitch Ratings and S&P Global Ratings that shifted away from the utility having a negative outlook to having a stable outlook for the first time
“S&P and Fitch revising their credit outlooks from negative to stable is not an insignificant step in the right direction,” Steen said, “… at the very minimum, we need to be setting our sights on a positive outlook, which indicates a rating may be raised.
The utility suffered financial blows both when it paused charging and disconnecting delinquent customers during the pandemic for more than a year, and then following the outfall of Winter Storm Uri, which led CPS Energy to purchase roughly $1 billion of power from the Texas energy market. The result wasCPS Energy has since taken strides to regain lost ground, including launching assistance programs and legally battling the state’s grid operator in court for the charges incurred during the storm.
The S&P Global report said the revised outlook also reflects the agency’s view of the utility’s declining accounts receivable and doubtful account balances in the past fiscal year, improved management of delinquent customer balances, and approval of a 4.25% base rate increase for fiscal year 2025 “that demonstrates ratemaking ability in the face of moderately high monthly bills relative to income levels.
“…The fact that CPS now has been recognized as a leader not only on the delivery service side, but also in terms of financial management and stability I think is something that we’ve got to take a moment to properly credit,” he said.