Antonio Making Bureaucracies Accountable – Part 7

Facing a Smart Grid technology failure and an accompanying cash squeeze, CPS President and CEO Paula Gold-Williams (G-W) has a “Plan” to fix CPS’ problems. As in our last session, G-W statements at her February 22, 2017 presentation to City Council are in quotation marks; our Coalition commentary is in italics. 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! CPS’ current vision: Technology is the Answer. Based on their experience thus far, CPS’ vision should be — Cost-Effective Technology May Be an Answer. Our utility remains in test mode, betting the business and risking taxpayer money on their technocracy, while ignoring the admonition, “When you find yourself in a hole, stop digging.” Following are G-W plans to double down on the management, consultants and technology that have brought us to this crisis.

“We are rebuilding our strategy today” because CPS’ current strategy is not working. “An updated group of Chiefs” will develop the new strategy. But Ms. GoldWilliams, your Chiefs cannot help because they are paid to support your policies; you and your predecessor are committed to solar. The only Chief who might help is Cris Eugster who holds Master of Science and Doctorate degrees from MIT in electrical engineering. However, the organization chart shows he is responsible for CPS’ present technical morass, having managed the Smart Grid project since its inception. And you will seek Eugster inputs to the electric delivery infra-structure of the future? Your “we are rebuilding our strategy today” indicts the past under Eugster’s leadership, for which he should be fired. (But accountability may be an alien concept in an unregulated monopoly).

“Our value proposition has been leveraging our investment and finding out the best way to reach economies of scale.” But what if the business proposition on which we intend to build scale is fundamentally flawed? CPS will not share their current projection of Smart Grid economics which will guide the Group of Chiefs. This brings to mind the old saw, “We lose money on every transaction, but make it up on volume.”

“Inviting tech community to think about new ways we should be solving issues for customers and getting that input.” Tech community members are vendors who want to sell their products and services, not help CPS. The technical consultant/vendor cabal are salesmen who got us into the Smart Grid mess and now we seek their leadership in extricating ourselves?

There is a reason we do not choose a fox to guard the chickens! G-W has begun distancing herself from failure, exposing her foreboding: “We inherited a mess from Doyle Beneby.” If we had G-W’s assessment of the “mess,” we would know what action CPS must pursue using our money. “It’s the customer we have to focus on.” In effect, “Don’t blame me; we were just responding to customer demand.” Be careful; customer surveys are often manipulated to support an agenda. Avoid consultant-crafted survey questions and vendor surveys. “Customer preferences are moving faster…we have to figure out exactly what customers want…they want reliable power behind the meter within the home or business.”

Note that G-W tells us we have to figure out what the customer wants and then tells us what the customer wants. How do you assess customer wants for a system to which customers have not been exposed, of whose cost they are unaware? Sounds like consultant/vendor talk. CPS is an unregulated utility monopoly, not a competitor in the consumer goods industry. G-W comments imply that CPS’ strategy is already in place; the Group of Chiefs’ role is simply to endorse the existing strategy. The CPS strategy for the future is HOPE (but hope is not a strategy): “…if we can get the energy storage component to really take off…” But what if you quantify the financial impact of the strategy and find it is not economic…?

The Express-News reported February 26 that CPS plans to build a 10-megawatt, $10 million lithium-ion battery plant that can store and provide up to 10 megawatts of power for one hour, allowing CPS to shift power captured at noon to a peak demand period from 5 to 7 p.m. But “…without the grant funds (a $3 million gift from the State), CPS would not pursue the battery storage project.” So, $10 million is too expensive; $7 million, a 30% reduction is okay? Coincidentally, Tesla hopes that by producing batteries in enormous quantities, it will reduce battery costs by — 30%. This is HOPE on steroids! CPS now has 450 megawatts of solar capacity, in place and being installed. If you are a professional financial expert, like G-W, your first instinct in a cash crunch is to preserve cash.

In our next session we will review CPS’ response to this cash crisis.