enough for the big future that CPS envisions. The only way to get such big capital is to borrow. Thus, CPS’ building plans lead to a new financing plan, which looks like this: 1975 bond issues of $85 million. 19% rate hike. Done. 1976 bond issue of $50 million. Approved by city council. 1977 . bond issues of $150 million. 15% rate increase. Currently before city council, labeled: Urgent Approve Before New State Public Utilities Comission Gets Going. Never Mind Why. 1978 bond issues of $120 million. 10 The Texas Observer 1979 bond issues of $120 million. 1980 bond issues of $110 million. 15% rate increase 1981 bond issues of $130 million. 1982 bond issue of $95 million. 15% rate increase. 1983 bond issues of $104 million. 1984 –bond issues of $122 million. 15% rate increase 1985 bond issues of $142 million. 1986 bond issues of $120 million. In the Sixties, CPS got out a bond issue every three of four years; its current outstanding indebtedness is about $120 million. By 1986, the utility will have taken on an additional total of $1,392 million. In the past, utility financial practice has been to keep bonded indebtedness as low as possible. CPS has enjoyed a high ratio of net revenue to maximum payments of annual principal and interest. This “earnings coverage” ratio is falling, and if the new financing plan is adopted, over the next ten years it will never be higher than 2.5-to-1, and mostly less. CPS admits this is contrary to traditional fiscal conservatism, but defends it by saying most other U.S. utilities are doing likewiseborrowing now is a way of deferring big rate increases until later. But not too much later. The consumer will see his combined electric and gas bill nearly double in ten years. This year’s average monthly bill of $46.67 will be $89.93 in 1986 assuming fuel cost pass-throughs don’t increase. So what? Nationally, average annual residential electric bills doubled during the decade 1965 to 1975. They had previously doubled in the period 1950 to 1965. In San Antonio, bills didn’t even do that: they remained virtually stable until 1974 at one of the lowest costs per kilowatt-hour in the land. The so-what is: formerly, doubling bills represented a national average annual kilowatt-hours usage per customer also doubling, while the cost per kilowatt-hour remained stable or declined. People paid more for electricity because they used more. Utility rate structures encouraged consumption. From now on, people will be paying more without using proportionately more. It will be interesting to see what people will do. The remarkable thing about CPS’ rate book is that it presents only one alternative for the future: borrow, build, and grow. The CPS report scouts the idea of encouraging conservation: ” …[T]he more a customer conserved, the more ultimately he will have to pay per kilowatt-hour and per cubic foot of gas. This is an inescapable economic reality in the utility business.” Thus do they allude to the fact that a utility with big bond borrowings pledged against revenues can only respond to Glen Biggs has faith To learn just why San Antonio’s only response to uncertainty is borrow, build, and grow, it’s necessary to talk with someone on the CPS board of directors, consisting of La Alcaldessa Her Honor, Mayor Cockrell, ex officio Eloy Centeno, supermarket chain owner whose attorney, Wilbur Matthews, is also CPS’ attorney; Tom Berg, chairman; and Glenn Biggs, of the First National Bank. -Ed. San Antonio Glen Biggs’ baby-blue eyes are twinkling as he tells the reporter the U.S. does not have an energy policy. If it did, we wouldn’t be in our present predicament. “It was the FPC regulating interstate gas prices, the reduction by Congress of the oil depletion allowance, and the disallowance of certain other tax credits that brought us to the ouch. A national energy policy could well start by deregulation of natural gas prices, which would result in higher prices to some part of the country for a while,” he said. But it would stimulate production and the development of substitutes and substitute processes, with the final result being decreasing energy costs … though never again to the low levels of the past, naturally. Mr. Biggs explained the projection of a 7.8 percent growth in net peak load thus: it was chosen in the confident expection that as soon as the recession subsided and people became more confident again, their income increasing with the economy’s growth, as always, electric power consumption would rise. “Of course,” he said, “there is a problem peculiar to San Antonio, namely the large group of low-income people who have suffered more in the recession than the more affluent citizens. There is no denying that these people have been hurt.” “What their hurt actually demonstrates,” he continued, “is the need to bring the Mexican-American into the economic mainstream.” And the failure to do this has to be laid at the door of business and civic leadership in the city, not on the management of the public utility. Because of the low-income part of San Antonio’s economy, it might take the city longer than the rest of the country to return to its former rate of growth in peak electric demand. But return it would, he explained. At the same time Biggs made it plain that the demand for a special “lifeline” rate could not be allowed to fall on the public utility: the public utility is not a welfare agency. Of course, if local, state, or federal government wished to make electricity bills a part of welfare supplements, some scheme of direct payments or certificates to the poor could be arranged. Glenn Biggs recalled that when he was a boy, grOwing up in West Texas, electricity was actually a luxury, provided by a motor-generator on the ranches for special purposes. Sometimes a wind-driven battery-charger was used. For lighting and cooking, though, people burned kerosense. It had taken the Rural Electrification Administration after WWII to bring electric light as a regular thing to that part of the country. Electricity was something people could do without. But they had got so they took it for granted. And some people were going so far as to demand it as a right. “Painful though recent increases in electric bills have been,” said Biggs, “it is clear the utilities have been the whipping boy for a
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