Mayor Castro may be Houdini after all
August 5, 2009
By Jan Jarboe Russell
San Antonio Express-News
In my column last Sunday, I wrote that the nuclear energy issue has Mayor Castro in political handcuffs and that he needed to ask himself: What would Houdini do?
Turns out: Castro may BE Houdini.
During an editorial board meeting at the Express-News this morning, Castro announced he is "uncomfortable" with CPS Energy's recommendation of a 40 percent investment in two new nuclear reactors and prefers instead a "take what we need" strategy, which CPS Energy says is 20 percent. Translation: the 40 percent option is dead on arrival.
His reasons for saying no to the 40 percent are smart: 1. Paying for 20 percent excess power in the hopes we might sell it to other cities, such as Austin, is not a wise investment for a public utility. 2. The energy industry is in a fluid state of transformation. 3. Investing 40 percent in nuclear would prohibit CPS from taking advantage of emerging technologies, such as wind and solar. 4. The ratepayers must be sheltered from risk.
Castro's position was not surprising -- he'd been signaling it for months.
What was surprising is the change in attitude of Milton Lee, the chief executive officer of CPS Energy, and Steve Bartley, interim general manager. The two CPS Energy execs who sat on either side of the mayor appear to have had either personality transplants or some kind of Road to Damascus conversion experience.
Previously they said CPS Energy needs to be a 40 percent owner in order to have veto power with NRG Energy, our partner in the South Texas Project. Now they say they can negotiate for veto power without owning 40 percent; indeed, 20 percent ownership might better mitigate the risk. As Lee put it: "It might make good sense to be in a minority ownership." And Bartley said: "There's more than one way to skin this cat.""
The other big news for me was there has been a shift in when we'll actually need additional nuclear energy. A few months ago, the estimate from CPS was 2015 or 2016. Now it's 2021.
What could explain this abrupt change of face by CPS Energy? My guess is Castro has the votes on both the board of trustees of CPS Energy AND the City Council to not pursue 40 percent ownership and to keep negotiating for a better deal.
In other words, he's thinking his way forward. The cuffs are off.
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