Garland Power & Light has had among the lowest electric rates in the Metroplex for a couple years. Currently, a number of plans have dropped below GP&L but these are volatile, month-by-month plans that are sometimes lower but have been generally higher.

Some have suggested that the comparison falls short, that the comparison should be widened beyond investor-owned utilities (IOUs) such as TXU, to other municipally-owned utilities in the state. Against a number of the other MOI's, GP&L is higher. However, just comparing the rates will seldom do anything to explain the why's.

San Antonio's City Public Services is doing so well that they are dominating their market and it has been suggested that they might soon expand their reach, challenging IOU's even more. Comparing GP&L to CPS is a hard comparison because of the extreme differences between the two utilities. CPS serves a much, much larger market, well beyond its city limits, which GP&L does not, and has made some very good investments over the years, many of which have not been available to GP&L, such as nuclear. Even the use of coal, San Antonio pays less, having the advantage of multiple available rail lines to compete for delivery.

Councilman Larry Jeffus recently asked for a written comparison of some of the major differences. Ray Schwertner, GP&L's new director, obliged. Mr Schwertner has extensive knowledge of the Texas power market, has worked on the IOU and the Co-Op sides of the power grid. He brings an extremely high level of experience and capability to GP&L.

Here are some of the major differences between GP&L and CPS:

The major reasons for the disparity between GP&L electric rates and the rates charged by CPS San Antonio are debt service and fuel diversity.

 

1) CPS San Antonio's generation assets, coal-fired units (1950's/60's/70's) and shares of the South Texas Nuclear Project (STP) (1988) built several years ago have much lower debt service obligations. The debt associated with those units has been either retired completely or paid down significantly. Conversely, GP&L still retains a substantial debt associated with the construction, conversion and operation of the Gibbons Creek Plant. CPS San Antonio is currently constructing a new 500 MW coal-fired plant and contemplating the addition of 2 additional nuclear units at the STP location in Matagorda County.

 

2) While GP&L enjoys a fuel mix of approximately 70% coal and 30% natural gas, CPS has a fuel mix even less dependent on natural gas including a high percentage of nuclear fuel (CPS owns 40% of STP). CPS San Antonio's mix, depicted below, is directly related to lower rates for electric service.

 

3) CPS enjoys a significant load growth scenario. Greater San Antonio load is steadily increasing at about 3 percent per year, as CPS Energy adds approximately 1,000 customers per month. Significant growth in the customer base increases the efficiency of the generation operations and accelerates the payment for new emergency technologies. CPS is currently building its last coal unit and plans to increase its current ownership in the South Texas Nuclear Facility.

 

4) CPS invested in a high voltage loop transmission system several years ago that has improved reliability while lowering system energy losses. GP&L is in the process of completing our 138kV loop system over the next ten years.

 

 

This comparison does not explain all the nuances between GP&L's costs and those of CPS or any of the other MOU's but it does illustrate some of the reasons that a quick comparison of rates is no more accurate when comparing utilities than the proverbial comparison of apples and oranges.

More needs to be done to explain GP&L's position in the market and to demonstrate that GP&L is competently operated for the benefit of Garland rate- and taxpayers. I'm confident that having a new director, a new and committed Council, and a professional administrative staff will make great strides this year to deliver on that obligation.

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