CPS Energy wins 50-year, $248 Million military contract

Utility to own, operate and maintain natural gas and electric infrastructure

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Dec 13, 2017, 14:42 ET

SAN ANTONIO, Dec. 13, 2017 /PRNewswire/ -- CPS Energy, the municipally-owned electric and gas utility, was awarded a $248 million, 50 year contract by the Defense Logistics Agency for the ownership, operation and maintenance of the natural gas and electric distribution system at Joint Base San Antonio (JBSA). CPS Energy was awarded the contract through a competitive bidding process that, evaluated experience, quality of service and value to the customer. This agreement will position, CPS Energy to operate and maintain the energy infrastructure of military installations in the Greater San Antonio area.

"This is a win for the community, as it will ensure that CPS Energy is the owner and operator of JBSA's gas infrastructure and electric grid," said Paula Gold-Williams, CPS Energy's president and CEO. "Equally important is that it is a tremendous vote of confidence in the more than 3,000 employees of CPS Energy. JBSA awarded this contract on the experience and value we presented and the quality of service our employees provide to all of our customers – whether it's a mega-large customer like JBSA or a small residential customer."

The contract calls for economic price adjustments, which will ensure appropriate compensation to CPS Energy and minimize risks to any of the utility's other customers as costs rise over the contract period. This 50-year contract ends Dec. 31, 2068, funded with appropriations from Air Force operations and maintenance budgets.

"While we provided a very competitive bid to JBSA, we also ensured that our other customers did not have to take on any cost risk. Instead, this allows our other customers to benefit from cost and operational efficiencies we will achieve through winning this large contract," said Gold-Williams.

CPS Energy will begin transitioning activities, including inventory and assessment of the natural gas and electric JBSA infrastructure at Randolph Air Force Base, Lackland Air Force Base and the Lackland Training Annex. The properties are situated on 11,160 acres of land and are home to nearly 134,000 civilians, military personnel and contractors. After the transition period, CPS Energy will own, operate and maintain the infrastructure at JBSA for the next 50 years. The transition process is expected to take between 12 and 15 months to complete. As part of the contract, CPS Energy will be reimbursed up to $4.5 million for the survey process of the electric and gas infrastructure.

CPS Energy is celebrating its 75th year of City of San Antonio ownership. Established in 1860, we are the nation's largest municipally owned natural gas and electric company, providing safe and affordable service to 804,000 electric and 343,000 natural gas customers in Greater San Antonio. With our AA+ credit rating, one of the best in the industry, we offer best in class reliability and some of the lowest rates among the top 10 largest U.S. cities. We recognize our role as a community partner and are continuously focused on job creation, economic development and educational investment. Powered by our people, our investment in the community is demonstrated through our employees' generosity in giving $1.1 million to United Way. We are also committed to investing in clean energy. CPS Energy is among the top public power wind energy buyers in the nation and number one in Texas for solar generation. For more information, visit newsroom.cpsenergy.com.

SOURCE CPS Energy