Avangrid and CPS Energy Deepen Partnership to Deliver Renewable Energy to an Additional 40,000 Homes in San Antonio
Avangrid, Inc., a prominent player in the U.S. renewable energy landscape and a member of the global Iberdrola Group, has taken another major step in advancing sustainable energy in Texas. The company announced an expansion of its Power Purchase Agreement (PPA) with CPS Energy, the largest municipally owned utility in the United States providing both electric and natural gas services. This enhanced agreement adds an impressive 159.2 megawatts (MW) of capacity to CPS Energy’s energy portfolio, sourced from Avangrid’s Peñascal wind power project located in South Texas.
The expansion brings CPS Energy’s total offtake from the Peñascal project to 320 MW—essentially doubling its current procurement from Avangrid. The additional clean energy capacity officially went online on April 1, 2025. According to the companies, this boost will enable CPS Energy to provide power to approximately 40,000 more households in the San Antonio area. The timing of the expansion is significant, as it aligns with the seasonal rise in energy demand typically associated with Texas’s scorching summer months.
Pedro Azagra, Chief Executive Officer of Avangrid, praised the ongoing partnership, emphasizing the value it brings not only to the utility and Avangrid itself but to the broader community and the state’s energy reliability.
“Avangrid’s relationship with CPS Energy grows even stronger with this expanded power contract,” Azagra stated. “Demand for electricity is growing from coast to coast, and we are glad to see this project serving communities in and around San Antonio. Projects like Peñascal are helping ensure we meet the growing demand for energy in Texas and support the reliability of the local electrical grid while bolstering the state’s reputation as a leader in American power production.”
Overview of the Peñascal Wind Project
The Peñascal wind farm is one of Avangrid’s flagship renewable energy assets in Texas. Situated just south of Baffin Bay in Kenedy County, the project consists of two development phases: Peñascal I and Peñascal II. Combined, these installations offer a total generation capacity of 401 MW.
Peñascal I was brought online in 2009, followed shortly by Peñascal II in 2010. Over the past 15 years, the site has delivered a reliable source of zero-emissions energy to the Texas grid. According to Avangrid, the facility can generate enough electricity annually to power roughly 100,000 average U.S. homes—all without consuming any water, a particularly valuable trait in a state that often experiences drought conditions.
With the new agreement in place, CPS Energy now receives around 80 percent of Peñascal’s total energy output, reinforcing the utility’s commitment to a diversified and resilient power mix.
CPS Energy’s Vision 2027 and Commitment to Clean Power
This expansion of renewable energy procurement aligns closely with CPS Energy’s “Vision 2027” strategy, a forward-looking roadmap designed to guide the utility through a transition to a more sustainable, reliable, and affordable energy future. Vision 2027 places strong emphasis on the development of a diverse generation portfolio—one that blends legacy assets with an increasing share of renewable resources and innovative technologies.
Rudy D. Garza, President and CEO of CPS Energy, underscored the importance of the expanded partnership with Avangrid in achieving those goals.
“CPS Energy’s expanded relationship with Avangrid is a testament to our Vision 2027 Plan,” Garza said. “It’s a comprehensive and diverse generation portfolio that enhances our capacity to serve a growing community. This additional investment in wind power allows us to continue to provide reliable and sustainable energy at an affordable price for our customers.”
Garza also highlighted that the added capacity helps the utility address both near-term challenges—such as rising summer energy demand—as well as longer-term environmental goals related to emissions reduction and climate resilience.
Economic and Environmental Benefits for Texas
The Peñascal wind project has brought substantial economic benefits to Kenedy County and surrounding areas since it began operations. The project directly supports 32 full-time jobs focused on operations and maintenance. Beyond employment, Peñascal has become a significant contributor to local revenues, having paid approximately $50 million in property taxes over its operational lifetime.
These tax payments have supported a range of public services including education, emergency services, and infrastructure maintenance. In rural communities where economic opportunities are more limited, projects like Peñascal play a critical role in sustaining local development while also contributing to statewide and national clean energy objectives.
The facility’s water-free generation is another key environmental benefit, especially given Texas’s frequent and severe droughts. Traditional power plants, particularly fossil-fuel-based ones, often consume vast amounts of water for cooling and other processes. By contrast, Peñascal helps reduce strain on local water resources, contributing to a more sustainable use of natural assets.
Avangrid’s Broader Presence in Texas
The Peñascal project is just one component of Avangrid’s rapidly expanding footprint in the Lone Star State. Across Texas, the company owns and operates seven major energy facilities, including wind and solar assets. Among these is the newly completed True North Solar Project in Falls County, which represents Avangrid’s entry into large-scale solar energy in Texas.
In total, Avangrid’s operational capacity in the state now approaches 1.6 gigawatts (GW), a portfolio that has the potential to power approximately 400,000 homes. Through its Texas-based operations, Avangrid has cumulatively contributed over $115 million in property tax revenue—a tangible example of how renewable energy investments deliver long-term community benefits.
These projects are part of Avangrid’s larger national strategy to invest in clean energy infrastructure, help utilities meet growing customer demand, and provide flexible, reliable electricity in regions experiencing rapid population growth and industrial development.
Meeting Growing Demand in a Changing Climate
Texas, and especially the greater San Antonio region, continues to see rapid population growth. As more residents and businesses move into the area, utilities like CPS Energy are being challenged to deliver greater volumes of power without compromising reliability or affordability. Climate change adds another layer of complexity, as hotter temperatures and extreme weather events increasingly stress the electric grid.
Renewable energy, particularly wind and solar power, offers a vital solution. These technologies not only reduce greenhouse gas emissions but can also help decentralize the grid and reduce dependency on any single source of energy. By expanding its relationship with Avangrid, CPS Energy is sending a clear message that clean power will be an integral part of San Antonio’s energy future.
