Last session we learned of CPS’ plan to develop a new strategy to deal with the stuttering Smart Grid technology and the associated cash squeeze. Here, we will learn of CPS plans to deal with their cash problems. Again, Gold-Williams (G-W) statements at her February 22, 2017 City Council presentation are in quotation marks; our Coalition’s comments are 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 continues to spend our tax dollars which they don’t have — yet: “Micro-Grid at Fort Sam (requiring a $950,000 CPS investment) — we want to make it possible for the military to continue to operate despite a power outage…we are looking to do something much more meaningful going forward.”
What are the economics of this venture? When did CPS assume responsibility for military readiness? “CPS’ preparation to move to a new headquarters is on schedule.” This project is all cash outﬂow, with no offsetting cost reductions. How much will CPS’ occupancy costs increase over 20 years — including renovation, moving, interest costs on the investment, plus the removal of the AT&T building from City property tax rolls? These numbers are Chairman Kelley’s area of expertise to share with us, CPS’ citizen-owners. “Educational Alliance: a continual focus.” Is this a social program doing a City function for the City to control City expenses? CPS behaves more like a City Department than a public utility challenged to deliver low-cost, reliable power to its customers. “Goal of Epicenter (for Sustainable Energy) is to rebuild the old Mission power plant.”
Is increased facilities utilization a valid business goal, given the $65 million required to repurpose it? And then there are the stafﬁng costs. CPS joins the City in the redevelopment business. “Smart communities, smart states can lower costs…leveraging our investment in the grid.” If a little investment in technology is unproﬁtable, an enormous investment will be proﬁtable? This is the Cash Trap again — to recover/justify our original investment we feel compelled to spend more. We cannot countenance failure. Meanwhile, added investment carries an added interest burden, propelling the CPS cash drain into the long term future. “We’re trying to save money but increase our offerings.” — these are conﬂicting objectives because new offering start-ups soak up cash. “You don’t want to tie yourself to a single generation set (power generation source” — spread the risk) vs. “Leverage on investment and economies of scale” (focus volume on few sources).
With this bleary perspective, which does not even mention costs, maybe CPS’ only resource in coping with the future is HOPE. Why does a savvy ﬁnancial expert like G-W complain of a cash squeeze and then celebrate these ongoing cash-consuming activities, in addition to those cited in session 6? Perhaps CPS has access to cash that we can only imagine: 1. CPS can issue bonds (which are not subject to voter approval) as they just did, providing $300 million in new cash. 2. A February 8, 2016 letter to Mayor Taylor reported a July 30, 2010 Texas PUC-sponsored Navigant Study that compared the accuracy of smart meters with properly adjusted analog meters. The smart meters capture 1.62% more usage than the analogs. In CPS’ environment that differential will generate an added $589 million of revenue and proﬁt for CPS over a 20-year period — conservative because CPS no longer adjusts analog meters, widening the potential analog/digital usage measurement spread beyond 1.62%. 3.
Recall the reference (at 4. of presentation 4) to the “complex and arcane Smart Grid software involved in pricing the 12 additional data elements Smart Meters measure and transmit.” Need more cash? Talk to the programmers and add a new “feature.” Recall that CPS is not regulated. What can we citizens do to protect ourselves from CPS’ tyranny? 1. Newly-appointed Secretary of Energy Rick Perry, EPA Administrator Scott Pruitt and Interior Secretary Ryan Zinke will evaluate Obama energy, environmental and land use regulations! This uncertainty does not commend ongoing investments in “renewable energy,” a political, not an economic response to an ill-deﬁned problem. 2. We must have a Mayor who will restore to the Mayor/City Council the CPS regulatory responsibility the Taylor administration chose to ignore.