CPS Energy looking to contract outside auditors to review its operations

‘Independent review’ follows council pressure during rate hike talks

SAN ANTONIO – The heavily criticized, city-owned utility, CPS Energy, has agreed to open itself to outside scrutiny through an “independent review” of various aspects of its operations.

Interim President and CEO Rudy Garza had agreed to an organizational review, which some council members insisted upon during the San Antonio City Council’s Jan. 13 vote to increase rates. On Feb. 11, the utility issued a request for proposals (RFP) from outside companies to review one or more of the five following areas:

  1. Financial health
  2. Operational excellence
  3. Customer engagement, user experience, and services design
  4. Organizational culture & workforce development
  5. Economic value to community

The “ideal” situation for the CPS Energy Board of Trustees would be to select more than one vendor to review the different areas, said board Vice-Chairwoman Janie Gonzalez.

She said that the reviewers’ findings would be reported directly to the trustees.

“Obviously, that came about with everything that’s been going on this past year and into the new year. And it was also an interest of the city council to address the constituents’ concerns. And so, as a board of directors, as an organization, we felt that it was a good time,” Gonzalez said.

Gonzalez said the goal is to have a “road map” for what the utility will be in the 21st century.

Though she said the utility’s staff would have a “very limited role” in receiving the proposals, the trustees will be the ones to score the vendors and select who gets the contracts to conduct the reviews.

And the utility staff, she said, will not have a say on the final reports the auditors give to the trustees.

“Let’s be clear,” Gonzalez told KSAT. “Independent -- third-party independent. Their role, staff, is to provide input, not to influence the outcome of these evaluations.”

District 1 Councilman Mario Bravo and District 6 Councilwoman Melissa Cabello Havrda pushed for outside audits of CPS Energy and used the rate hike discussions to exact promises from board members and executives.

Even before his time on council, Bravo had been a longtime critic of CPS Energy. He took criticism for voting for the rate hike CPS Energy was asking for before any reviews got started.

“Some people were concerned that I gave them the benefit of the doubt, and I took them at their word that they would do -- that they would follow through with these outside expert studies,” Bravo said. “But I was able to meet with enough of the board members and get buy-in on this that I felt very comfortable with it, and I’m glad that they’re following through on it.”

Cabello Havrda wants the utility to keep council members engaged in the process.

“They can’t hide from us. You know, we’re going to -- I’m going to keep bulldogging this, and they’re going to come and talk with us. And I will say that CPS has been very cooperative. They’ve been as transparent, I think, as we expect them to be.”

Both Bravo and Cabello Havrda appeared confident that the review would be truly independent, even though it’s the utility itself that’s commissioning it.

“I think this is a good approach. It’s not perfect, but they are an independent board, and we have to respect that they are the governing board,” Bravo said. “So this gets as independent as we can in the outside studies while still respecting the form of governance that we have -- that we’re operating under.”

“Right now, I don’t have any qualms about it,” Cabello Havrda said. “But you know, I’m keeping eagle eyes on it, making sure that that there aren’t any missteps and there aren’t any -- we’re not seeing any kind of closing of the door. We need to keep it all out in the open.”

Proposals are due by March 10, and the trustees are expected to award the contracts for the different areas of review by July 1.

Once a contract has been awarded, the final report will be due back within 120 days.

About the Author:

Garrett Brnger is a reporter with KSAT 12.