CPS and NRG are headed toward Splitsville

January 26, 2010

Scott Stroud
San Antonio Express News

The air blowing overhead in the brightly lit courtroom made it hard to hear at times. Overhead projectors illuminated PowerPoint presentations on both sides of the room up front. There were microphones and laptops, too, some plugged into outlets along the walls.

And yet, with all the electricity thrumming through, nothing burned up CPS ratepayer dollars faster than the dozen-plus lawyers squabbling over the tattered relationship between CPS Energy and NRG Energy Inc., its co-owner in the floundering attempt to build two new nuclear plants at the South Texas Project.

Relationships being what they are, the most consistent comparison made since the dispute broke into the open late last year has been divorce. It seemed too easy at first, but then on Monday, Jelynne LeBlanc-Burley, the new interim general manager at CPS, wondered why my colleague, Anton Caputo, and I sat on the NRG side of the courtroom.

I always thought bride’s side-groom’s side traditions were for weddings instead of divorces, but there you go. And the more you think about what has happened here, the more unavoidable the parallel becomes.

As with an ugly divorce, this matter now lies in the hands of the lawyers, which is not a good place for it to be. It’s there in part because neither side took seriously the possibility that the deal might fall apart.

Blame-laying is rampant now, negotiations have been sluggish, and grandstanding is commonplace. There are no children in the drama, only San Antonio ratepayers, whose energy bills ultimately will underwrite this nonsense.

The part of the rakish rogue has been played convincingly by NRG, which often seems too slick for its own good. If CPS is correct in its claim that NRG negotiated to sell part of the nuclear project to Toshiba, which also happened to be the main contractor, without telling CPS, that dalliance looks unseemly at best.

That may be when the sex appeal of CPS’ considerable dowry wore off. It also might’ve dawned on NRG during CPS’ effort to sell the public on nuclear expansion last year that suddenly the conversation wasn’t so scintillating.

The latest slickness comes from NRG President and CEO David Crane, who met with San Antonio business leaders last week and then thanked them in a letter he released to the newspaper. I’m all for transparency, but the letter, which outlined NRG’s legal arguments briefly, fits my definition of grandstanding.

It’s the kind you write when you’re losing, and that appears to be NRG’s legal status at the moment. Judge Larry Noll didn’t buy their claim that CPS should forfeit its interest in the property because he found nothing to indicate that in the contract. He’s shown no interest in all the times CPS executives told the rest of us that they would lose the millions they’d invested if they walked away, saying he only cares about what’s in the contract.

That’s good news for CPS, which has made any number of statements contradicting its legal position, but it still doesn’t clean up the mess.

As for the divorce, it’s easy to say there should have been a prenuptial agreement here, which is true as far as it goes. But this was no California celebrity marriage. It’s a billion-dollar deal that affects us all more than a little bit. The lack of vigilance by CPS on the front end remains appalling.

The whole thing reminds me why I’ve never much cared for divorce court: The proceedings are often tawdry, both sides seem like losers, and you always end up wondering what will happen to the children – or, in this case, the ratepayers of San Antonio.


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