Winter storm issues exposed a cascade of scandals at CPS Energy in 2021

SAN ANTONIO – While the deadly February winter storm not only left hundreds of thousands of San Antonio residents without power in below-freezing temperatures, some for days on end, it also exposed a slew of organizational issues within CPS Energy, the country’s largest public electricity company.

In early March, weeks after the inclement weather had ended, a KSAT 12 Defenders investigation found that the utility had relied on a student to provide its forecast during the winter blast and did not have a meteorologist on staff.

The entrepreneur, who called himself on social media “Kid Cold Front”, had not been compensated more than $ 716 in a single week.

This approach to CPS Energy’s forecast was inconsistent with that of other large utilities and retail energy providers in the state.

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Officials from CPS Energy and a local university have been providing conflicting information about the contractor’s education level for months.

A spokesperson for the CPS told Defenders that the entrepreneur graduated from the University of the Word Incarnate last December with a degree in meteorology.

But after the Defenders attempted to verify the contractor’s college credentials, a UIW spokesperson said that last spring he was still a student at the School of Mathematics, Science and Engineering and was not not listed as a graduate.

Energy experts said this spring that CPS Energy’s poor risk management strategy helped force the utility to pay hundreds of millions of dollars for natural gas in the spot market, after the unit price rose. skyrocketed, in order to continue to heat homes and provide electricity to his plants.

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Files obtained by the Defenders show that CPS received deliveries of natural gas which jumped in quantity from February 11 – days before the storm hit, but days after some experts had already started to predict that the he explosion could have an impact on the infrastructure of utility companies.

By that time, the price of natural gas in the spot market had already nearly doubled, according to the US Energy Information Administration.

In a press release on February 10, the same day CPS received just 180,000 MMBtu (natural gas units in millions of British thermal units) of purchased natural gas, utility officials acknowledged that the mass incoming arctic air could affect its equipment as well as the electrical grid. Texas Reliability Council Grid (ERCOT).

Records show that CPS Energy has agreed to pay up to $ 500 per unit of natural gas. (KSAT)

On this critical day of storm preparedness, records show that the amount of natural gas delivered to CPS has actually decreased from the day before, when the utility received 190,000 units of natural gas purchased.

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“Absolutely. They were caught off guard. I’m sure they didn’t expect the market to go this route, but it did. Were there any protections that could have improved this exposure? Probably, ”said Ed Hirs, a University of Houston energy scholar, asked in March about CPS’s exposure to high natural gas prices.

CPS Energy officials argue that natural gas suppliers overcharged and even jacked up prices during the storm, leading the utility to challenge the amount owed for fuel in nearly 20 lawsuits, some of which have already been filed. rejected by CPS Energy.

As of last week, the utility was still battling nearly $ 590 million in costs accumulated during the freeze.

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CPS Energy has also been named in at least half a dozen wrongful death lawsuits resulting from the storm.

Massive financial hurdles for CPS Energy continue as the utility requests a planned tariff increase of 3.85%.

The increase, if approved by San Antonio City Council, would take effect on March 1, 2022.

CPS Energy Executives Heading For Mass Exit

The deadly February storm and the utility’s decision to challenge its fuel costs in court led to disputes within CPS Energy’s upper management echelon.

This summer, the entire senior public service legal team resigned.

A Defenders investigation in June found that lawyers, who had 88 years of legal experience, had filed internal complaints against then-CEO Paula Gold-Williams.

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Public service officials, who declined to disclose the content of the complaints against Gold-Williams, said in a written statement that the claims and subsequent counterclaims were related to the February winter storm and the financial problems facing the service audience was facing.

CPS Energy’s senior legal team tendered their resignation this summer. (KSAT)

In September, the Texas attorney general’s office allowed CPS Energy to keep the complaints confidential, but ordered the utility to issue a stand-alone complaint attached to the information in question. The one-page complaint accused Gold-Williams of running the company “through his management team with fear and intimidation.”

“Many employees are walking on eggshells around her to avoid her anger,” the complaint alleged.

The complaint said that at one point Gold-Williams told members of her management team that they needed to protect her and align with her, and that her lectures had left senior staff “depressed, downcast. and oppressed “.

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Weeks after the complaint was published, Gold-Williams informed the utility’s board of directors that she would step down, effective January 2022.

Gold-Williams has moved on to an advisory role for the time she remains with the public service.

CPS Energy President and CEO Paula Gold Williams speaks at the North San Antonio Chamber of Commerce earlier this year. (KSAT)

CPS Energy chief operating officer Fred Bonewell resigned in October, days after KSAT 12 Defenders exposed staff and expense complaints against him that had largely gone unpunished.

Bonewell left the struggling public service just months after being promoted to his second position.

A Defenders investigation in October found that Bonewell made an ethnically insensitive comment in front of four co-workers in October 2018, which led to a formal complaint against him.

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Bonewell has been the subject of at least eight staff complaints since January 2018. Five of these were subsequently substantiated or resulted in Bonewell receiving ethics coaching or participating in “face-to-face conversations” with Gold- Williams, a public service spokeswoman confirmed.

Of those five, four complaints from February 2019 to May 2020 were related to Bonewell’s expenses at work.

A months-long Defenders investigation earlier this month uncovered outrageous purchases costing the utility thousands of dollars during the tenures of Bonewell and Gold-Williams.

In 2019 alone, Bonewell’s acquisition card spending totaled $ 53,444.53, more than the median household income in San Antonio in the same year. according to US census data.

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The expense reports and receipts covering Bonewell’s tenure show that he often billed multiple meals a day or high-priced meals on his corporate purchasing card, including:

  • On a single day in November 2018, Bonewell billed for breakfast at Guenther House, lunch at the now-closed El Mirador, and dinner at J. Alexander’s.

  • Bonewell has eaten (and spent) at a North Side brunch spot called Snooze over 100 times, often multiple times a week.

  • A $ 683 meal at Saltgrass Steak House on the River Walk in April 2018 included the purchase of over a dozen steaks. The meal was described as a safety kick-off thank you lunch and was attended by various other CPS managers and directors, according to the records.

  • An expense of $ 378 at the Brazilian steakhouse Fogo de Chao.

  • Lots of high priced meals at various locations in Paesano costing taxpayers $ 704, $ 688, and $ 600.

In contrast, core CPS Energy staff who attended employee engagement meetings in July 2019 were fed hot dogs and chili purchased at Sam’s Club, according to employee purchase records. associated with Bonewell’s tasks.

Itemized receipts detail the extravagant expenses of former CPS Energy chief executive Fred Bonewell. (KSAT)

Like Bonewell, Gold-Williams regularly used luxury drivers when traveling on behalf of CPS Energy.

A December 2016 travel receipt shows Gold-Williams used his acquisition card to be driven by a driver from a Washington, DC hotel to Reagan National Airport. The trip, which covered less than seven miles, cost $ 225.

Gold-Williams, in total, used her acquisition card for more than $ 14,000 in luxury driver fares, as she traveled extensively on behalf of the utility before the pandemic.

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Fees often rose to several hundred dollars per trip, depending on the city she was in and whether she had made multiple stops before arriving at her destination, records show.

Gold-Williams used his acquisition card to make more than $ 9,700 in donations to outside organizations and the education fund for the children of a CPS Energy employee whose wife died suddenly.

The expenses were covered by the utility, according to the records.

Additionally, Gold-Williams used the corporate card to charge nearly $ 9,600 for flowers and gift baskets, before appearing to abandon the practice in August 2018.

Many of these purchases included gift messages suggesting they were made on behalf of Gold-Williams and the CPS Energy family, while some did not include any description, making it unclear whether these expenses were personal. or professional.

Separately, CPS Energy used fake data when submitting a report on diversity spending, a Defenders investigation found this month.

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Utilities officials earlier this year were unable to rule out whether the miscalculations were made intentionally.

The errors, which occurred when submitting data to the Fair Contracting Coalition for its 2017 newsletter, overstated how much the utility spent to procure goods and services from minority-owned businesses and it mistakenly got a “D” instead of an “F” that year.

The Defenders discovered fake data used by CPS Energy that increased its diversity spend score. (KSAT)

“I’m not going to dispute that this looks like a hot mess. I totally agree, ”said Lisa Lewis, executive director of CPS Energy, whose jurisdiction includes the supply chain department.

Lewis said utility officials learned of the record-keeping errors earlier this year after Defenders began asking questions about how they compiled their data.

The Fair Contracting Coalition (FCC) is a San Antonio volunteer group primarily made up of small business owners who push large public entities in the San Antonio area to spend money locally and with small or corporate-owned businesses. women, veterans or minorities.

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