CPS Energy’s Garza is custom-built for the challenges of San Antonio

Rudy Garza, interim president and CEO of CPS Energy of Greater San Antonio, is, one might say, the complete package. His career seems suited to the challenges of the nation’s largest city-owned electric and natural gas utility.

When the top job opened up last November, the mayor and city council didn’t need to look outside for a qualified person. Garza was there with a resumé extraordinarily relevant to the needs of the moment at CPS Energy: trained in engineering with political credibility.

Like other state utilities, it is still dealing with the fallout from the disastrous Uri winter storm in February 2021, when 5 million Texans were without power for days and 246 people lost their homes. life according to the official count.

Garza earned a bachelor’s degree in electrical engineering from the University of Texas at Austin and a master’s degree in management from the University of North Texas.

He is also the first Hispanic to lead public service in a predominantly Hispanic city. He’s proud of it, as proud as he is of being a Texan through and through.

I found it discreet and charming. He says his Texas heritage shows in his fondness for hunting and fishing – but it’s mostly being in nature that appeals to him.

Garza was born in Corpus Christi and began his career as an engineer at TXU, the large, investor-owned utility. He moved from engineering to government affairs in Austin, where he became chief of TXU’s Office of Legislative Affairs.

When TXU was taken over by a venture capital consortium, led by hedge fund KKR, Garza accepted an offer from the city of Corpus Christi. “It was a big drop in revenue,” he told me when I sat down with him at CPS Energy headquarters in San Antonio.

Lobbyist in Austin and Washington

Garza’s decision to return to his hometown was influenced by family needs. He settled down, prospered and became a lobbyist, among other things, for the city, which frequently brought him back to Austin and Washington.

More importantly, he learned the ways of politics and especially the ways of municipal government. Following an unexpected opportunity 12 years ago, his path to leadership of CPS Energy began. “I had to choose between a career as a city manager or as a public services manager. And I chose the latter.

Garza told me, “My anchor is really on the wired side of the business. I had a pretty good experience across the whole utility value chain, from licensing power plants to working well with unions. »

But, as he said, his trajectory to leadership grew out of his work in Austin and Washington. “I have been responsible for passing almost 40 utility bills,” he said.

“For five years at CPS Energy, I ran the wireline side of the business and things were pretty solid. When I left, our reliability numbers were great, our projects were on time and on budget, and I had excellent relations with our unions.

A note on the wires: CPS Energy serves all of Bexar County and parts of seven other counties. Its service area covers 1,566 square miles.

“I left that for the client side of the business. My expertise is really about how the electricity market works. I know the deregulated market well – I really know ERCOT and how it works,” Garza said, adding, “I was the primary policy guy for this utility.

My impression of Garza is that of a cool-headed man who loves making and distributing electricity, but who found he was good – perhaps better than good – at the political issues that all utilities are facing.

While, like other utility leaders in Texas, he is appalled by the statewide mismanagement that occurred during the February 2021 deep freeze, Garza is looking past the recrimination . He told me, when we discussed the issues raised by Uri, that he wanted ERCOT to have guide rails for future extreme events.

CPS Energy does not take advantage of the securitization option – issuing bonds to borrow money from the market and spreading the costs derived from Uri over time. Instead, CPS Energy received approval from San Antonio City County to recoup its paid and legitimate fuel costs. The technical term here is “creating a regulatory asset”. Either way, his customers will pay for many years without being hit all at once. But, ultimately, the cost to customers will be lower due to CPS Energy’s exceptional credit rating which allows it to borrow at lower interest rates than the securitization option.

Largest solar utility in Texas

CPS Energy has a diversified generation portfolio that amounts to approximately 6,000 MW of base load: 1,300 MW of coal, 1,100 MW of nuclear, 3,400 MW of gas, and it contracts 1,050 MW of wind and 550 MW of solar. CPS Energy is set to add 900 MW of solar power, bringing the utility to approximately 1,600 MW of solar power, bolstering its current position as the utility with the largest solar portfolio in Texas.

By 2040, the utility plans to achieve 50% or more electricity supplied by renewables and have eliminated much of its reliance on fossil fuels.

By the end of the year, Garza told me, CPS Energy will present to its board that manages it options on coal-fired power plants, which are still quite young but out of step with the environmental needs of today.

San Antonio is one of the cities in Texas that is attracting an influx of high-tech companies, many of which have data centers that require large amounts of uninterrupted power. Demands on the public service are growing at 2% per year, and it must grow accordingly. In addition, CPS Energy is responsible for serving Joint Base San Antonio. It’s a giant customer – CPS Energy’s first electricity customer.

The growth imperative does not worry Garza. He feels that the resources – especially in wind and solar – are there to deal with it.

What worries him? Like every other utility CEO I’ve spoken to, it’s cybersecurity.

Except for the dark days in the middle of Uri, the utility has managed to keep the lights on for over 160 years and thrive with San Antonio, home of the Alamo. The city is also home to the River Walk, one of America’s most admired and copied urban renewal projects – coincidentally, just a few hundred meters from CPS Energy’s new LEED Gold headquarters.

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