Archive for the ‘News’ Category

December 8, 2009

San Antonio Express-News Editorial Board

E-mails between Toshiba Inc. and CPS Energy and also among CPS executives make clear that the utility knowingly understated the costs of nuclear expansion to the public. Over a period of months during which CPS officials were telling the public the price for expansion at the South Texas Project was $13 billion, executives knew Toshiba was projecting the cost to be at least $4 billion higher.

The same e-mails demonstrate anxiety among CPS officials that NRG Energy – a publicly held corporation that is CPS’s partner in the project – intended to reveal the inflated cost estimates. "I think your discussion of incomplete cost estimates in public in November is a major problem," the CPS vice president of power plant construction wrote to an NRG official.

That e-mail was sent on Oct. 22. City Council was set to vote on $400 million in additional financing for the project on Oct. 29. Yet according to an investigation led by the CPS internal auditor, a longtime employee, no one at CPS – not even the vice president of nuclear development who also served as secretary for the board of trustees – acted with malicious intent.

Incomprehensibly, the CPS board last week passed a resolution that endorsed this finding.

The determination by an insider investigation that there was no malicious intent may strain some legal definition designed to avert criminal prosecution. But it is completely unacceptable for a municipally owned utility that is struggling to retain – let alone regain – credibility.

CPS Energy is in crisis. That crisis is not going unnoticed by the investment services that rate CPS bond issues.

Unclipped, its impact will be felt by ratepayers.

The only way to resolve this crisis and put CPS back on a path to credibility is for an independent external arbiter to conduct a complete investigation of CPS organization and practices. That includes the size and composition of the board of trustees, a review of the technical procedures used to produce cost estimates for nuclear and non-nuclear sources of energy, and an audit of the annual payment of 14 percent of revenues that CPS is supposed to make to the City of San Antonio.

The time for hedging and secrecy has passed. A thorough accounting at CPS is urgently required. Mayor Julián Castro, the only member of the CPS board of trustees who is accountable to the public, and Jelynne LeBlanc-Burley, who was elevated by the board to lead the troubled utility, should accept no less.

December 8, 2009

News 4 WOAI

SAN ANTONIO — The public will soon know what was uncovered during a special investigation into the CPS Energy nuclear expansion project.

Board members decided Monday night to make those results public on Wednesday. They said it is important to rebuild the energy provider’s credibility in ratepayers’ eyes, and the report will help do that.

The investigation looked into why city council and the CPS Energy board did not know the cost estimate of two new nuclear reactors had gone up by $4 billion until right before a council vote on it.

After Monday night’s meeting, News 4 WOAI asked chairwoman Aurora Geis if she plans to step down, a move Mayor Julian Casto called for.

“I personally want to be able to stand for what is in the best interest of CPS Energy and for this community.” Geis went on to say, “That would be handling the situation in a very orderly manner.”

The board also set Jelynne Leblanc Burley’s salary at $300,000 while she is serving as interim General Manager of CPS Energy. As chief administrative officer, she was making $225,000.

CPS Energy is still searching for a permanent General Manager.

Watch video of the news story at WOAI’s news site:

December 4, 2009

By Scott Stroud
San Antonio Express-News

After word leaked out in October that building two new nuclear plants might cost as much as $4 billion more than had been publicly projected, Mayor Julián Castro expressed dismay at the city-owned utility’s penchant for secrecy.

"The CPS Energy culture needs to shift towards greater transparency," he said.

He was right, of course, but the culture isn’t shifting at breakneck speed. At this week’s CPS board meeting, copies of the investigative post-mortem on what actually happened were passed out to Castro and the other board members behind closed doors and then rounded up afterward.

All the public received was a three-page, five-whereas resolution outlining the fallout at the agency and not explaining the reasoning behind it much at all. The board-approved resolution described a "good faith belief" on the part of CPS executives that the revised estimate wasn’t formal. Everyone involved was absolved of "malicious intent."

That’s all well and good, but no explanation was offered for Steve Bartley’s resignation last week as interim general manager, nor that of Robert Temple as secretary to the board and a member of its nuclear team.

Temple’s departure was announced, but not explained, somewhere after the whereases. The reinstatement of two suspended executives, Michael Kotara and Jim Nesrsta, was explained – and I use the word loosely – in a single paragraph apiece.

The mayor has said more than once that he favors full disclosure, but he pulled back after he and other board members saw the first version. That’s likely because releasing it then would have given him a fair amount of heartburn.

On Thursday, however, Castro spokesman Jaime Castillo said the mayor supports making both versions of the CPS report public.

That should happen as quickly as possible. Until it does, the mayor’s push to oust CPS board Chairwoman Aurora Geis and board member Stephen Hennigan must be put on hold. To begin with, forcibly removing them from the board is legally problematic. Doing so before airing the results of the investigation would only compound the agency’s credibility problem.

As for Castro’s heartburn, the draft report criticizes him for meddling by meeting with NRG, CPS Energy’s partner on the nuclear project, outside the purview of the board. More problematic from the mayor’s perspective, the report chastises Castro’s chief of staff, Robbie Greenblum, for being less than forthcoming about how he learned of the higher cost estimate.

That caused a dustup because Greenblum, in his interview with the report’s authors, apparently hadn’t been asked that question. City Attorney Michael Bernard demanded that they reinterview Greenblum and draft a new version, which hasn’t been delivered to the board.

Perhaps sensing that the first draft might embarrass the mayor, Hennigan called for immediate full disclosure in a memo to fellow board members. The mayor has now moved to call his bluff, though he probably should have done so sooner.

Geis, meanwhile, has only added to the credibility problem at CPS, telling the Express-News this week that the mayor never asked her to resign. His office quickly produced a voicemail she left on his phone in which she discussed that very request.

All this leaves us with the same mess we’ve been in for quite some time: Trust in CPS is a shambles, the credibility problem seems to be spreading, and the shift to a culture of transparency can’t happen soon enough.

jstroud(at)express-news.net

December 8, 2009

By Tracy Idell Hamilton
San Antonio Express-News

Aurora Geis, the embattled chairwoman of CPS Energy’s board of trustees, agreed Tuesday to resign.

Geis, who has been under pressure to step down for weeks, said she would leave her seat as soon as soon as a qualified replacement was on board.

"I think this is a great opportunity for a candidate who is willing to serve," Geis said, adding that the process could take four or five weeks.

Geis’ replacement must come from the northwest quadrant of San Antonio, the area that Geis represents. People can apply for the volunteer position. The board chooses its member, but the City Council must ratify the choice.

Mayor Julián Castro, who asked Geis to step down, said he hopes the board can discuss a replacement as soon as Monday.

"I appreciate Aurora’s service on the board," And I look forward to taking up the issue of her successor on Dec. 14."

December 8, 2009

Greg Harman
San Antonio Current

It took some doing, and some help from his friends, but Mayor Julián Castro appears to have finally wrested a resignation from CPS Energy Board Chair Aurora Geis this week. Geis was repolishing her resignation Tuesday afternoon, while stating she felt strongly that she is leaving utility is on the right path despite the challenges that are ahead.

"The timing of it is not what I would have preferred because there is so much stability that needs to be put in place," Geis said. "But now the greater challenge that we face is identifying a candidate who will be willing to serve."

Unlike the newly former CPS GM Steve Bartley’s "effective immediately" exit, Geis will linger a bit until a replacement is found. Even as she has written and rewritten her departure letter, the full board has been discussing possible replacements for her.

These have included Valero CEO Bill Klesse, fresh from Mad Money’s Wall of Shame, now waging war on cap-and-trade; former SBC Pres Wayne Alexander, serving on the Port San Anto board, and Ed Kelly, retired USAA Real Estate boss.

Whoever steps into Geis’ slot will have to face down several immediate challenges, foremost being regaining the public’s trust after key members of CPS lied to the public about the anticipated cost of the planned expansion of the South Texas Plant nuclear complex for months. They’ll also have to help the board and staff figure out how to finance an additional $8 billion in capital over the next seven years; nail down a new strategic energy plan, which most likely will not include nuclear; manage potential lawsuit havoc with STP partner NRG Energy; prepare a new carbon strategy even as the U.S. EPA prepares to regulate the greenhouse gas as a pollutant under the Clean Air Act; and lure in a new CEO to replace deadwood Milton Lee at a significantly reduced salary.

As Geis says: "There are a lot of issues that have to be addressed."

And while Geis’ resignation is not in hand, as yet, less clear is the future of fellow Boardie Steve Hennigan, whose head Castro likewise covets. Geis says she will be urging her fellow Board member to stick it out, but Castro’s office says the call for Hennigan’s head remains.