Tag Archives: Public Utility

Council tentatively set to vote on CPS Energy rate adjustment November 7

By North SA Chamber Editor
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cps energy logoAfter months of rigorous analysis and back and forth with CPS Energy staff, the city of San Antonio’s chief financial officer recommended to the City Council Wednesday that it approve CPS Energy’s 4.25 percent rate increase request.

Ben Gorzell told the council at its information session that CPS Energy staff had worked diligently to make the request as low as possible while still protecting the utility’s top notch credit rating.

“We worked very closely with their staff, and we found significant improvement in the whole budget (process) since 2010, an increased rigor,” he said, “which I’m sure has to do with (CEO) Doyle Beneby’s leadership and what he’s asked staff to do.”

Gorzell made four additional recommendations to CPS Energy as part of his presentation. They include that CPS Energy:

  • commit to working collaboratively with the city to study CPS Energy’s pensions and benefits plans and associated costs;
  • continue to enhance its capital project prioritization process;
  • continues to address customer service issues in billing and call center departments; and
  • review its fuel hedging program, taking into consideration costs and potential benefits of the program.

The council, for its part, also lauded Beneby and the staff who worked on the budget and rate proposal, praising them for listening to the community and reducing the bonus program by 50 percent in both 2015 and 2016.

“Thanks for listening and fine tuning the ask,” said Councilman Cris Medina, who had taken a lead role in demanding changes to the bonus program the CPS Energy board of trustees put into place 13 years ago.

District 4 Councilman Rey Saldaña urged the utility to increase outreach to low income customers to sign them up for affordability programs.

“We’ve actually taken your words to heart,” said Beneby, noting that efforts are now underway to identify those who have multiple late payments, to see if they qualify for the increased affordability discount.

Ron Nirenberg, who represents District 8, praised the utility for its extensive public outreach efforts, which included customer care fairs in districts across the city, a public input session, attendance at various council events, extensive social media outreach and blog posts on topics ranging from how rates are determined to how the rate increase will be used.

Asked whether city staff ever recommends against an increase, Gorzell explained that the process was designed to get to a place where the city and the utility are aligned.

“We started out in a different place,” he said, then the two staffs go back and forth until city staff is satisfied that it can recommend the request. In this case, CPS Energy responded by slashing its bonus program, increasing money to help low income customers pay their bills, and delayed some capital projects to reduce the rate increase request from 4.75 percent to 4.25 percent.

The City Council is expected to vote on the increase on Nov. 7.

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October 2013 Word from the Chairman

By North SA Chamber Editor
Posted on by Email to a Friend

Rollins_Brad-ChairmanAs you know, the North SA Chamber has a long history as an advocate for business-friendly initiatives and legislation, as well as infrastructure improvements. We work to consistently champion a pro-business agenda and endeavor to serve as a collective voice to represent our large and small business members in government policy and legislative issues, especially at the local and state levels.

Our board of directors, government affairs and infrastructure committees monitor and suggest necessary changes and/or improvements on a number of issues including infrastructure. Regularly the North SA Chamber board of directors takes positions of endorsement or opposition of such issues.

At the September 24th North SA Chamber board of directors meeting, board members heard from Cris Eugster, Group EVP at CPS Energy, regarding the CPS Energy proposed rate increase to be voted on and approved by City Council, and from our Government Affairs Council Chair, Rob Killen of Kauffman Killen, regarding the Proposed Texas Constitutional Amendments Nos. 3 and 6, which are on the ballot for the November 5th election. The North San Antonio Chamber of Commerce board of directors reviewed, held discussion, voted and endorsed each proposition.

CPS Energy Rate Adjustment
In late September CPS Energy was proposing a 4.75 percent rate increase – the first since 2010, to keep up with an expanding customer base and to upgrade existing infrastructure. The North SA Chamber understands that even with a rate increase CPS Energy’s rates still will be among the lowest in Texas, and our board believes it’s critical for economic development and business retention to provide efficient reliable power to keep our economy strong. Following our board meeting, City Council and the public have expressed concern over the utility’s bonus program, and chief executive Doyle Beneby has since announced a reduction in the proposed rate increase to 4.25 percent as well as a 50 percent reduction in employee bonus plans for years 2015 and 2016, thus making the rate increase more satisfactory to its detractors. City Council will vote on the rate adjustment at the November 7 Council meeting, and if approved, the new rates will take effect February 1, 2014.

Constitutional Amendment Election – November 5, 2013
Additionally, the North SA Chamber encourages our members and the community to vote “Yes” for the proposed Constitutional Amendment, No. 3 on the ballot, “The constitutional amendment to authorize a political subdivision of this state to extend the number of days that aircraft parts that are exempt from ad valorem taxation due to their location in this state for a temporary period may be located in this state for purposes of qualifying for the tax exemption.” Texas is one of only 11 states to levy a property tax on inventory. Learn more at the Texas Association of Manufacturers’ website, or download the Proposition 3 Fact Sheet.

Furthermore, the North SA Chamber encourages our members and the community to vote “Yes” for the proposed Constitutional Amendment, No. 6 on the ballot, “The constitutional amendment providing for the creation of the State Water Implementation Fund for Texas and the State Water Implementation Revenue Fund for Texas to assist in the financing of priority projects in the state water plan to ensure the availability of adequate water resources.” Learn more at the H204Texas website, or download the Proposition 6 Fact Sheet.

Photo Identification
Remember, with the passing of Senate Bill 14, voters are now required to present an approved form of photo identification in order to vote in all Texas Elections. Visit VoteTexas.Gov for more information.

Photo ID Required for Texas Voters
Identificación con Foto se Requiere para Votantes Tejanos

On behalf of the North SA Chamber board of directors, we ask for your thoughtful consideration of these items and encourage you to exercise your civic rights by offering feedback to your City Council member and voting in the November 5th election. Thank you for all you do to keep San Antonio and Bexar County strong.

CPS Energy seeks rate increase

By North SA Chamber Editor
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By Tracy Idell Hamilton

cps energy logoCPS Energy will ask the San Antonio City Council to approve a 4.75 percent rate in October.

If approved, the new increase would go into effect Feb. 1 of next year, and boost the average residential customer’s bill by $5.19.

CPS Energy last raised rates in 2010.

Last year, CPS Energy was able to forego a previously planned rate increase by aggressively reducing costs, increasing efficiency and delaying certain infrastructure projects.

It was able to do so while remaining in the top two percent of all credit-rated utilities in the country, a position that keeps borrowing costs low.

To maintain that strong position, however, CPS Energy must now increase revenue.

Because providing affordable, reliable power is CPS Energy’s main mission, the utility will continue to refine its business practices, root out waste and make decisions about its future power supply that hedge against risk and higher costs.

Even with the increase, CPS Energy rates will remain among the lowest in Texas, and the lowest among the top 20 largest cities in the country.

View the rate increase request presentation to the Board of Trustees

San Antonio’s economy is growing, which means CPS Energy is growing. But those new customers don’t completely cover the costs of expansion, nor do they cover the costs of upgrading existing infrastructure.

As CPS Energy’s customer base grows, so to do the number of civic improvement projects the utility is asked to do by the City of San Antonio and Bexar County, such as relocating existing electric and gas facilities to support street and drainage improvement projects.

New technology and environmental regulations also require strategic investment to keep up with industry standards and customer expectations. Improvements to the electrical grid, scheduled to begin later this year, will increase efficiency, allowing CPS Energy to see and respond to power outages remotely.

The upgrades will save money and increase reliability in the long run, but require substantial investment today.

Energy efficiency and conservation has been a crucial part of CPS Energy’s overall strategy to keep rates affordable, and it has exceeded those goals by 300 percent.

Those programs benefit customers in two ways – by reducing household utility bills and delaying the need to add more power plants to CPS Energy’s fleet.

To ease the burden on our lowest-income customers, CPS Energy is expanding its Affordability Discount program, which helps qualified customers by reducing their monthly bill by $12.30 monthly for gas and electric customers. That’s more than the amount of the rate increase.

CPS Energy has additional programs to help those in need as well.

In the coming weeks, CPS Energy will communicate clearly and often with customers and elected officials about why a rate increase is needed. That will include lists of specific capital projects and upgrades.

Read the letter from CEO Doyle Beneby.

CPS Energy is hosting a series of Customer Care Fairs in neighborhoods around the city and county to answer questions and promote programs that can help customers save money on their bills.

CPS Energy expands social media presence in Facebook, Twitter and YouTube to reach customers quickly

By North SA Chamber Editor
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cps energy logoWhen police alerted CPS Energy that a man posing as a utility employee gained entrance into a house on the city’s West Side with the intent to assault the resident, CPS Energy’s communications team swung into action.

After quickly calling a joint press conference with police to remind customers they can verify an employee by asking to see ID and calling CPS Energy, the team turned to social media.

The team posted the same information on CPS Energy’s Facebook page and Twitter account. All day long, customers who follow CPS Energy on Twitter retweeted the information, while Facebook fans shared it with their friends, sending our message out to a much wider audience.

The week before, the team alerted customers of two localized power outages on Facebook. Reaction was swift. Customers let CPS Energy know their power was out and where, and then again when it was restored.

Customer William Long wrote, “I called non-emergency about 20 minutes ago to let them know the traffic lights are out at Tammy/Blanco… but it seems you may already know that. Thanks for posting!”

After power was restored, Long wrote, “Great use of social media!”

“I like it that you have a Facebook page, CPS,” wrote another customer. “Thanks.”

Like many companies today, CPS Energy has expanded its presence on social media outlets like Facebook, Twitter and YouTube because those have become important ways to reach customers quickly.

“It’s no longer an option, we must participate,” said Kate Cooper, CPS Energy’s social media project manager. “We need to engage the customer where they are — and they’re on social media.”

In the past, Cooper said, customers would call, and later email CPS Energy when they had an issue or wanted to report a power outage. Today, she said, it’s more common, especially for younger customers, to send CPS Energy a message from their mobile devices to Facebook or Twitter.

CPS Energy, in turn, can keep customers updated during power outages, letting people know crews are on the way, or about how long they’ll have to wait until the power comes back on.

“People are appreciative of getting information,” Cooper said, “and knowing someone is listening to their concerns.”

CPS Energy uses social media to remind customers about different ways to save money and how to be more energy efficient. It’s also a way to remind people, Cooper said, “that there are people behind the logo — we’re your neighbors.”

The social media team is comprised of employees in CPS Energy’s corporate communications office, who have taken on social media duties in addition to their regular jobs.

Last year, CPS Energy also launched the Energized, blog, which allows the utility to tell its own story. Recent articles have included the background behind CPS Energy’s decision to alter its solar payment system, how and why the company pays bonuses when performance metrics are met, and that employees and partner companies recently raised more than $80,000 for Respite Care of San Antonio.

There will always be a place for traditional media like television and newspapers, and customers will always be able to call when they need to pay a bill or discuss an issue.

But as our customers come to rely more and more on social media to stay on top of the news of the day, and to share their own lives, CPS Energy will be there.

CPS Energy pay performance

By North SA Chamber Editor
Posted on by Email to a Friend

cps energy logoA recent story in the San Antonio Express-News trumpeted this astounding figure: the pay for senior executives at CPS Energy has “soared” by 58 percent since 2010.

A wider look at the data shows, however, tells a much different story.

Executive pay has increased dramatically since 2010, because in fiscal 2009, executives did not meet performance goals and so didn’t earn incentive pay. The following two years, two of the strongest in the company’s history, those goals were met, and bonuses, which account for almost one-third of executive salaries, were paid out.

Looking at salaries from 2008 to 2012, senior executives saw their pay increase by 4.5 percent. That’s compared to a 19 percent increase in non-executive salaries over the same period.

CPS energy salaries

This chart, published in the San Antonio Express-News, shows CPS Energy compensation over the last five years.

While 4.5 percent is far less dramatic, and doesn’t make for nearly as shocking of a headline, it’s still important to understand how compensation is structured at San Antonio’s municipally owned utility, and why bonuses were paid the past two years.

For the second year in a row, CPS Energy’s electric reliability is within the top tier of the industry, its employees have increased safety to a record high, and customer satisfaction remains high.

That’s what the San Antonio City Council heard at an April work session from CPS Energy CEO Doyle Beneby, who also offered an update on the state of the energy industry and the city-owned utility’s overall strategic plan.

CPS Energy is recognized as having the premier credit rating in the industry by Bank of America/Merrill Lynch, a position bolstered by a continued focus on cost efficiency and process improvements within the company.

As a result, operations and maintenance costs per CPS Energy customer continue to drop, from $368 to $345 per person, with a goal of $333 per person by 2015. At the same time, employees continue to work more efficiently. That has resulted in a leaner workforce, from a high of almost 4,300 in 2001 to about 3,400 today.

Meanwhile, capital costs decreased from fiscal year 2012, while operations and maintenance holds steady for the next two fiscal years. Because of that, the budget for 2013 did not include a rate increase.

Rates for CPS Energy customers remain some of the lowest in Texas, and the lowest among the largest 20 cities in the country.

Beneby also highlighted CPS Energy’s stepped-up commitment to economic development. The utility’s New Energy Economy partners, including OCI Solar Power, GreenStar, Silver Spring Network and Consert, among others, have made $88 million in investments in the San Antonio region to date, including the creation of 154 jobs and $1.5 million that has been donated to local educational initiatives.

Those partners are on track to meet their commitments to create more than 1,000 jobs by 2018, Beneby said, with investments topping $974 million.

For all these reasons, CPS Energy employees earned incentive pay the past two years.

The utility has had an incentive program in place for 13 years now, to encourage top performance for safety, budget management, low bills, customer satisfaction and care for the environment.

Instead of giving higher base salaries, CPS Energy prefers to have lower base salaries, encouraging strong performance with the opportunity to earn more by meeting company-wide goals.

“Incentives are just one part of a total compensation package that is designed to deliver strong performance rather than guarantee a higher salary,” Lisa Lewis, vice-president of communications and media relations, told the Express-News. “We prefer to put a part of that salary at risk.”

Those bonuses don’t boost salaries beyond the market rate, however.

CPS Energy employees’ salaries are regularly compared to salaries for similar utilities across the region and nation.

A recent study found that including bonuses and benefits, top executives are paid somewhat less than the industry standard for similarly-sized energy companies, while most employees are paid within range of competitive market rates.

Employees do not always meet their annual goals. In fiscal year 2009, only non-executive employees met and were paid for meeting the company’s safety goal that year. Executives didn’t receive incentive pay at all – hence the dip in their salaries, making the increase of the following two years more dramatic.

This year, executives earned a 32 percent bonus; more of their pay is at risk, notes Lewis, because they have the most responsibility for meeting annual performance goals.

Most employees have between 25 percent and 7 percent of their salary at risk. One group of hourly employees has chosen, as part of their working agreement with CPS Energy, to have just one percent of their pay at risk.

Taken together, this year’s bonuses totaled $16.2 million, or 6 percent of CPS Energy’s total labor budget.

It is reasonable for the community to debate whether those bonuses are fair, said Lewis, and she noted that there are different ways to structure compensation.

Some utilities simply guarantee a salary, for example, while others only offer incentive pay to top executives.

“CPS Energy has looked for a way that gets the maximum value for our customers, by incenting our employees to work together to achieve common goals, and by putting part of employees pay at risk, rather than guaranteeing a higher salary. In 2011 and 2012, CPS Energy employees have shown that it can work.”

Read more on CPS Energy Blog

 

CPS Energy records second year of top performance

By North SA Chamber Editor
Posted on by Email to a Friend

CPS workersCPS Energy’s electric reliability is within the top tier of the industry, its employees have increased safety to a record high for the second year in a row, and customer satisfaction remains high.

That’s what the San Antonio City Council heard at its April 3 work session from CPS Energy CEO Doyle Beneby, who also offered an update on the state of the energy industry and the city-owned utility’s overall strategic plan.

Beneby also touched on the utility’s finances, which remain strong, and the continued job creation from its New Energy Economy partners.

“I can’t point to any one factor as the driver of CPS Energy’s success,” Beneby said. “It takes a committed team of employees doing a hundred different things well to get these kinds of results. And when we deliver the basics reliably, it gives us an opportunity to look for other ways to be of value to our customers—through economic development and support for education initiatives.”

Diversification and risk management remain the cornerstone of CPS Energy policy, Beneby said. That includes continuing to reduce the carbon intensity of the utility’s generation fleet, by moving away from unscrubbed coal and increasing the use of natural gas, clean coal and solar power.

CPS Energy also continues to invest in innovative technologies, such as LED lighting, electrical grid upgrades and demand management technologies. Those investments all have a strong economic development component, as CPS Energy continues to leverage its investments to bring good-paying, clean energy jobs to the region.

Customers continue to give the utility high marks, Beneby told the council.

Since 2009, customer satisfaction has inched upwards from 79 percent to 81 percent, according to the annual Residential Customer Satisfaction Surveys. Beneby has set a goal of 83 percent satisfaction by 2015, he told the council.

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CPS Energy ranks number one in overall customer satisfaction among large southern utilities, according to J.D. Power and Associates, topping a list that includes Florida Power & Light, Alabama Power, Oklahoma Gas & Electric and South Carolina Electric & Gas.

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Customer satisfaction has dipped recently, as CPS Energy deals with a temporary increase in estimated billing, the industry-wide practice of estimating some bills, then adjusting them to the actual meter reading at a later date.

That has led to an increase in customer service calls and longer wait times for those trying to sort out their bills.

CPS Energy has since hired additional readers and has sped up the implementation of meters which can be read remotely, meaning readers don’t have to go on a customer’s property to get a reading.

“And to help with high call volumes, we’re encouraging our customers to use more of our online service features, especially during the upcoming summer months when we experience the highest volume of customer calls,” said Maria Koudouris, senior vice president of customer service.

Customer satisfaction remains high when it comes to reliability. Both the length and frequency of outages has declined; in 2009, the average length of interruption was more than two hours; last year it was just over an hour, putting CPS Energy in the top ten percent for utility reliability.

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For all the good news, Beneby is perhaps most proud of CPS Energy’s safety record. He has consistently said that he considers safety — getting employees home safely to their families every night — to be his top priority.

For the second year in a row, CPS Energy employees have met the challenge, resulting in the best safety performance in the company’s history. Reported safety incidents have dropped from 120 in 2009 to 48 last year. Beneby has set even more stringent goals, to reduce incidents even more by 2015.

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Turning to the company’s financials, Beneby told councilmembers CPS Energy is recognized as having the premier credit rating in the industry by Bank of America/Merrill Lynch, a position bolstered by a continued focus on cost efficiency and process improvements within the company.

As a result, operations and maintenance costs per CPS Energy customer has dropped, from $368 to $345 per person, with a goal of $333 per person by 2015. At the same time, employees continue to work more efficiently. That has resulted in a leaner workforce, from a high of almost 4,300 in 2001 to about 3,400 today.

Beneby also highlighted CPS Energy’s stepped-up commitment to economic development. The utility’s New Energy Economy partners, which include OCI Solar Power, GreenStar, Silver Spring Network and Consert, among others, have made $88 million in investments in the San Antonio region to date, including the creation of 154 jobs and $1.5 million that has been donated to local educational initiatives.

Those partners are on track to meet their commitments to create more than 1,000 jobs by 2018, Beneby said, with investments topping $974 million.

Councilman Reed Williams, a former energy industry executive, said he was pleased by what he heard.

“I think we’re in a great position,” he said, referencing the utility’s increased use of natural gas as part of its effort to diversify fuel sources. “Keeping costs down, safety up — these are good things.”

Visit CPS Energy blog