San Antonio Making Bureaucracies Accountable – Part 2
As we continue to expose CPS Energy’s secrets, progressing through its gauzy milieu, we encounter session 2.: 1. CPS is an unregulated monopoly 2. CPS is a municipally-owned utility 3. CPS is “managed” by an unelected Board of Trustees 4. But who really runs CPS? 5. CPS policy: “renewables-at-any-cost” 6. CPS President Gold-Williams has told us what is wrong with CPS 7. Gold-Williams has a “plan” to ﬁx CPS’ problems 8. CPS spends our money as if it does not face a cash squeeze 9. CPS knows their 20-year Smart Grid ﬁnancial projection is wrong 10. CPS uses Smart Grid data to manage our behavior 11. Is Smart Grid vulnerable to hacking? You bet your life! What is the signiﬁcance of CPS being municipally-owned, apart from justifying the Texas Public Utility Regulatory Act’s assignment of the regulation of the CPS utility to San Antonio’s Mayor/City Council? In this environment, we citizen customers of CPS are also the utility’s owners; and we are compelled to be passive investors in the utility. (More on this later). There are qualiﬁcations to this owner/investor relationship. If we live within one of the 32 incorporated cities within CPS’ service area — Alamo Heights, Converse, Live Oak, Shavano Park, Universal City, for example; or one of the 7 abutting counties, parts of which are also served by CPS, our utilities are “regulated” by the San Antonio Mayor/ City Council (but at 1, we learned this body does not regulate); and, we are not among the utility’s owners. But it gets worse. As documented in an April 29, 2016 letter to Mayor Taylor, of the $336 million of City Revenue contributed by CPS Energy to the City of San Antonio in 2016, $85 million can be considered an appropriate dividend on the City’s CPS investment; the remaining $251 million is a “stealth tax” paid by CPS ratepayers to the City of San Antonio. Did our illustrative incorporated cities approve such payments to San Antonio, paid by CPS customers within their jurisdictions — Alamo Heights’ $1.66 million, Converse’s $2.71 million, Live Oak’s $2.13 million, Shavano Park’s $1.07 million, Universal City’s $2.52 million — or is this taxation without representation? And what of us CPS ratepayers living in San Antonio? Are we aware that, while we had a voice in the sales tax ($275 million) and property tax ($294 million) components of the City’s Revenue in 2016, we had no voice in the even larger $336 million of inﬂated CPS rates required to fund this energy stealth tax? Bureaucrats dazzle us with a shiny object, “Look, no tax increase,” while they get the largest component of City Revenue
from a hidden (stealth) tax which they manipulate. (More on this later). This practice is not compatible with San Antonio’s Ethics Code at “2-41 Statement of Purpose” — It is essential in a democratic system that the public has conﬁdence in the integrity, independence, and impartiality of those who act on their behalf in government. Such conﬁdence depends not only on the conduct of those who exercise ofﬁcial power, but on the availability of aid or redress to all persons on equal terms and on the accessibility and dissemination of information relating to the conduct of public affairs. This stealth energy tax is highly regressive. The lower cohorts of our population spend larger portions of their income on energy than more afﬂuent cohorts, so the poor are disproportionately burdened by this insidious, invisible energy consumption tax. We have reviewed our customer/owner relationships with CPS Energy which the bureaucracy continues to obscure, but what of our investor role? On April 18, 2017 a letter with the subject, “Complaint: Alleged Violation of Securities Law by CPS Energy, San Antonio, Texas” was sent to the Securities and Exchange Commission’s Enforcement Division, citing CPS’ high-risk investments in renewable energy. This investment arena is customarily served by venture capitalists who are equipped to evaluate risks and hedge against them by spreading their investment among several projects. CPS’ Smart Grid is a single, bet-your-business investment offering no risk diversiﬁcation. CPS has subsumed a venture capital function for which they are not prepared: On February 22, 2017 CPS President Gold-Williams reported to CPS’ regulators (San Antonio’s Mayor and City Council) that CPS’ transition to renewable energy generation has not met expectations: “We are rebuilding our strategy today.” And “We inherited a mess from Doyle Beneby,” Gold-Williams’ predecessor. (More on this later). The unelected CPS Energy Board of Trustees and its ex ofﬁcio member, Mayor Taylor, recklessly jeopardized the welfare of us investors by failing to adequately supervise CPS’ high-risk Smart Grid venture capital project, now in trouble. CPS has refused to provide reliable information concerning the economics of their Smart Grid project. A new venture requires intense light, not stonewalling and obfuscation. We know enough of CPS’ one-dimensional (non-diversiﬁed) high-risk venture capital investment in renewables to decide to divest, but we cannot. Compulsory ownership in this instance is accompanied by a compulsory risk of loss which CPS will not quantify. The CPS unregulated monopoly has spawned a unique venture capital ﬁnancial entity, risking investor funds without being accountable to those investors. Is there an aspect of ﬁnancial tyranny in this scenario?
San Antonio Making Bureaucracies Accountable – Part 2