CPS Energy employees paid hundreds of thousands despite not showing up for work due to call-in blunders

Public utility paid out over $306,000 in ‘bypass pay’ during three-year period

SAN ANTONIO – Before Fred Bonewell was promoted in June to be CPS Energy’s new chief operating officer, his signature appeared on a March 2017 agreement that laid out the working conditions for the utility’s wage-scale employees.

The agreement, which CPS officials have been quick to point out is not a contract, established shift hours, sick leave requirements and other aspects of the job for CPS frontline workers such as linemen, gas services employees and vehicle maintenance workers. It was signed while Bonewell served as CPS’ chief safety and security officer.

Fred Bonewell (right) was formally introduced as CPS Energy's Chief Operating Officer during a June press conference. (KSAT)

“They’re the ones that are really on that front line making things happen,” said Bonewell, who defended the 46-page manual during an interview late last month at the utility’s downtown headquarters.

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Bonewell, in a 2017 letter to staff, noted that the agreement reflected a “cooperative business relationship” between the utility and two unions that represent up to half of its skilled craft workforce: the International Brotherhood of Electrical Workers Local 500 and the National Association of Public Employees Local 219.

However, one of the agreement’s stipulations is now under intense scrutiny: bypass pay.

The bypass pay provision states that CPS workers inadvertently skipped for overtime are compensated the appropriate overtime rate for the hours they lost.

Put simply, employees who should have been called in during extreme storm events but were not for whatever reason, still get paid, even while sitting at home.

The bypass pay stipulation has been a boon for some CPS Energy wage-scale employees, according to years of financial records obtained by the KSAT 12 Defenders.

The records show workers collecting bypass payments as high as nearly $3,200. In all, more than $306,000 in bypass pay was handed out by the utility from June 2018 to the end of this May, resulting from more than 650 call-in errors.

Multiple CPS employees collected bypass pay eight times during that period of time, while some collected these payments several days in a row, records show.

CPS officials have been unable to explain why some workers received bypass pay more often than others.

“This was a mutual agreement between us and the unions. It was put in place to protect our frontline workers,” said Bonewell, who repeated the ‘frontline worker’ phrasing when asked how he could justify to CPS Energy ratepayers the massive payouts.

What went wrong?

Officials at IBEW Local 500′s Southeast Side headquarters did not respond to requests for comment left via telephone or in person. Last month, while a KSAT news crew was outside, a woman at the property looked through the blinds of the small building and a man who drove up quickly went inside without saying anything.

A man walks into the IBEW Local 500 headquarters on Goliad Road late last month. (KSAT)

Officials with NAPE Local 219 were much more forthcoming.

Representative Rodolfo Rosales Jr. told the Defenders July 16 that being on call is hard on linemen and that they have to drop everything and go into work if called.

Rosales then released the following statement via email:

“First and foremost NAPE does not approve of any employee at CPS getting excessive pay for call outs. That being said, it should be noted that NAPE employees met with CPS management in good faith under meet and confer to establish a fair and equitable system to compensate employees for all call outs. NAPE does not operate the automated system that makes the call outs based on the bypass system. It is our understanding that ARCOS was the automated system being used by CPS in order to make the call outs. Furthermore, it is our understanding that there was a glitch in the system that (has) now been corrected at this time.”

CPS senior leadership, however, described the hundreds of errors as human mistakes.

“We have a roster that changes weekly and if for some reason we don’t change that roster and we’re supposed to and you make a call out, then you’re potentially calling the wrong people out,” said Darrell Clifton, CPS Energy vice president of distribution, construction and maintenance services.

CPS Energy Vice President of Distribution, Construction and Maintenance Services Darrell Clifton. (KSAT)

“Either data errors are made in the entry of that information or errors are made when we manually call out people,” added Bonewell.

Both Bonewell and Clifton said the utility has improved the accuracy of its call-in lists recently, after the utility was forced to shell out more than $160,000 in bypass pay last year alone.

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Following abbreviated discussions earlier this year, Clifton said CPS moved to a 60% call-in rate in order for workers to qualify for bypass pay. If an employee receives a call-in 10 times, for example, he or she would have had to have responded at least six times in order to be eligible for the pay.

“We need to make sure that we’re only paying the people that were going to respond anyway. And I think that’s the biggest driver right there,” said Clifton.

Is $1 billion bill even higher?

CPS officials as recently as April said their total bills from Winter Storm Uri could top $1.035 billion.

That figure includes the hundreds of millions of dollars spent on natural gas as well as energy purchased through ERCOT, the state’s electric grid operator.

But that amount, which is being contested in close to 20 lawsuits filed by CPS against many of its natural gas suppliers, could actually be much higher.

A source with one of the gas suppliers being sued by CPS told the Defenders the total owed by the utility is higher because CPS also faces significant interest payments on what they owe, due to non-payment.

A CPS spokeswoman acknowledged the potential interest payments in a written statement released late last month:

“CPS Energy is fighting to protect our customers from the exorbitant, excessive, and unconscionable prices certain natural gas suppliers are attempting to pass on to the people of San Antonio – in some cases these prices represent a 12,000%-16,000% increase during the natural disaster. While there is some risk of interest rate liability if some of the natural gas suppliers are successful in their attempts to collect the excessive prices charged during Winter Storm Uri, the amounts in question are still in dispute. We will not know if interest is applicable, let alone if it is payable, until these disputes have been resolved. We will address the question of any interest when we have that clarity. We continue in constructive negotiations with existing natural gas suppliers to potentially resolve the disputes, as we notch up early successes in our fight to protect our customers, including preventing outflow to ERCOT amounting to approximately $800 million.”

Based off of a standard contract for purchasing natural gas, this interest rate exceeds five percent, which would tack on tens of millions of dollars to CPS’ gas bill should it be unsuccessful in court.


About the Authors:

Emmy-award winning reporter Dillon Collier joined the KSAT 12 Defenders in 2016. Dillon's investigative stories air weeknights on the Nightbeat. He provides restaurant health reports for KSAT's "Behind the Kitchen Door." Dillon is a two-time Houston Press Club Journalist of the Year and a Texas Associated Press Broadcasters Reporter of the Year.

Joshua Saunders is an Emmy award-winning photographer/editor who has worked in the San Antonio market for the past 20 years. Joshua works in the Defenders unit, covering crime and corruption throughout the city.