Meeting Intelligence Preview
Meeting Summary
The San Antonio City Council B Session on March 4, 2026 focused on two major briefings: CPS Energy's proposed FY27 budget of $1.7 billion in capital and $1.1 billion in O&M (the utility's largest ever), which assumes a potential rate increase to address a $50 million revenue gap, and a comprehensive data center policy discussion examining impacts on water and energy infrastructure. CPS reported 59 large load projects totaling over 28,000 megawatts in various stages, with 1,700 megawatts in contracting phase expected to come online over 5-7 years. SAWS indicated current data center water usage is minimal (0.1% potable, 1.25% recycled) but noted only approximately 10,000 acre-feet of recycled water capacity remains available.
Key Decisions (3)
CPS Energy FY27 Budget Briefing
CPS Energy presented its largest-ever budget with $1.7 billion in capital expenditures and $1.1 billion in O&M. The budget shows a $50 million gap between projected revenues and expenditures. CPS indicated they will wait until after summer to determine if a rate increase is necessary. The budget includes $700 million for reliability improvements, $290 million for customer growth connections, and significant technology investments.
Data Center Policy Framework Discussion
Council received comprehensive briefings from CPS Energy, SAWS, and Development Services on data center growth impacts. CPS reported 59 large load projects in pipeline with 1,700 megawatts in contracting phase. SAWS indicated approximately 10,000 acre-feet of recycled water available for expansion. Development Services presented potential UDC amendments including limiting data centers to I-1 zoning and establishing 1,000-foot buffers from residential areas.
Support for New Service Option Pilot Program
CPS Energy's proposed pilot tariff for behind-the-meter generation at data centers received general council support. The pilot would be limited to 15 customers over two years to study how backup generation requirements under Senate Bill 6 can be implemented. Customers would bring their own generation (natural gas, diesel, fuel cells, or batteries) for grid reliability during emergency conditions.
Zoning Changes (1)
Citywide - Data Center Zoning
City of San Antonio Development Services (policy recommendation)
Development Activity (3)
Data Center Large Load Pipeline
59 large load projects (40+ megawatts each) in various stages: 335 megawatts contracted and operational, 1,400 megawatts in contracting phase, remainder in feasibility studies. Total pipeline exceeds 28,000 megawatts. 11 projects with 1,700 megawatts expected to energize within 5-7 years.
CPS Energy Power Plant Acquisitions
Recent acquisition added over 1,000 megawatts to CPS fleet at approximately half the cost of new construction. Assets contributed $30 million in wholesale revenue in partial year, with $100+ million projected annually going forward.
SAWS Recycled Water System Expansion
Project to connect Leon Creek Treatment Plant to Klaus Plant to improve east-west water transfer capability. Current system has 130 miles of pipeline around 410 corridor. Approximately 10,000 acre-feet of additional recycled water capacity available within existing infrastructure.
Market Signals (6)
Commercial Demand
CPS Energy reports 59 large load projects (primarily data centers) in pipeline representing potential demand equivalent to 7 million homes, though not all expected to materialize.
Infrastructure
SAWS has only approximately 10,000 acre-feet of recycled water capacity available, with current data center requests totaling about 3,000 acre-feet, indicating limited runway for water-intensive data center growth.
Commercial Demand
Data centers are shifting away from evaporative cooling to liquid cooling technologies, significantly reducing water consumption requirements per facility.
Housing Demand
CPS Energy expects to connect approximately 26,000 new electric customers and 5,000 new gas customers in FY27, indicating continued residential growth.
Sentiment
Council expressed strong interest in community benefit agreements for data centers, campus-style development approaches, and ensuring data centers act as community partners through philanthropic giving and school partnerships.
Infrastructure
CPS Energy's commercial and industrial customers represent 11% of customer count but pay over 50% of revenue, with large load customers helping suppress rates for residential customers through fixed cost distribution.