Sometimes it’s hard to pinpoint the moment a CEO begins to turn into a lunatic – when his decisions are subjected to another irreconcilable scrutiny and their support begins to wane.
Paula Gold-Williams, CEO of CPS Energy, is not there yet. But she could come close.
The $ 11.6 billion organization she runs is sealed off and locked down and overseen by a self-sustaining board of trustees. The resignations of CPS General Counsel and their two deputies earlier this month are therefore an amazing development.
It’s hard to read the Exodus as anything other than a verdict on Gold-Williams leadership and the decision to launch a spate of lawsuits against 17 natural gas suppliers and the Electric Reliability Council of Texas after the February freeze.
But Gold-Williams’ troubles didn’t start in the city’s sleek new headquarters on McCullough Avenue. You started with CPS clients.
The bitter aftermath of Storm
Four months after winter storm Uri brutally devastated Texas, installment payers are still seething.
You have not forgotten what it was like to do without electricity for hours or days in the freezing cold. The fact that ERCOT, the Texas power grid operator, ordered the power outages that made her life so miserable doesn’t count for much.
The public communication of the energy supplier during the crisis was spotty and at times empathetic. A tweet from February 16, the day the crisis broke down, is a prime example: “Paula Gold-Williams: We don’t look at individual people. We look at the stability of the network and try to help San Antonio through this situation. “
A poll by Bexar Facts and KSAT in early April showed the collapse of CPS’s public approval. It fell from 78 percent in the previous year to 46 percent. The proportion of respondents who strongly disapprove of the utility’s performance rose from 4 percent to 26 percent.
And that was before the CPS credit debacle.
Many customers were offended by the stingy, one-time discounts that CPS announced in April. The utility cut $ 8.75 off the monthly bills of 250,000+ customers who went without power for at least 24 hours while the freeze was over. No power for 48 hours or more? You have been given between $ 50 and $ 100 extra credit for your effort.
And last month, Gold-Williams said CPS was considering a rate hike to deal with the more than $ 1 billion total debt accumulated during the storm when it was forced to sell natural gas and electricity in the wholesale market at astronomical buy prices.
The utility company could ask the city council to approve a tariff increase of up to 9.5 percent in the coming months. That would add $ 14.60 to your monthly bill.
City council incumbents and candidates were alerted by angry voters in the run-up to the May 1 elections and the June 5 runoff elections. Gold-Williams, 58, an accountant who made it into the corner office of CPS in 2016 and tends to use dry corporate language, has been at the center of voter anger.
Paula Gold-Williams, CEO of CPS Energy, on Tuesday, May 7, 2019.
Bob Owen, employee photographer / employee photographer
It’s important to note the obvious at this point: She will be the first Black woman to serve as CEO of CPS. It’s impossible to say how that will affect the public’s perception of her, but it has to. Bad news: racists and sexists still live among us.
On the other hand, the progressives and most local officials don’t criticize them publicly – because how many black female CEOs are there in this city?
This week I called people in and around town hall to see how Gold-Williams and the company she runs are doing politically. The answer: bad.
At this point in time, insider support for a rate hike is low – an understatement – despite the apparent need for one.
With the public’s trust in CPS im Graben, the newly formed councilor council, whose 10 members were appointed by the city council and 11 by the utility’s board of directors, will have added weight to council members if discussions about a pay rise get serious.
But timing might be the catch here, at least if CPS is careful to move fast. RAC chairman Reed Williams, a former North Side city councilor, said the committee would investigate the utility’s tariffs through October before making recommendations on structuring.
Support for Gold-Williams among elected officials can be as little as willingness to sign a rate hike.
She is rumored to be retiring at the end of the year. Which led me to ask CPS if she has any short term plans to step down. This is the answer I received: “Paula has not submitted any retirement papers to either the board or the company.”
The departure of CPS General Counsel Carolyn Shellman and two of her deputies, Abigail Ottmers and Zandra Pulis, adds to Gold-Williams’ problems.
“Fight for our customers”
Under Gold-Williams, CPS embarked on a comprehensive legal strategy to reduce its storm-related debt. It hired three outside law firms, at an estimated cost of $ 10 million, to sue ERCOT and 17 natural gas suppliers who CPS accused of taking advantage of the weather crisis to charge inflated prices.
As reported by Express-News Staff Writer Diego Mendoza-Moyers, CPS’s chances are not good in court. For one thing, the natural gas market is largely unregulated. And large, presumably highly developed companies do not count as average consumers under the state’s price driving law.
We don’t know exactly why the three CPS lawyers ran away. They haven’t spoken to reporters, and CPS hasn’t made a statement – or released their letters of resignation.
I left a message on Shellman’s cell phone on Thursday but heard nothing.
She submitted her resignation last week but will be with CPS until Wednesday. Talking to a journalist about why she was abruptly leaving the utility she has worked for since 2006 would likely have embarrassed her. Avoided looks in the hallway, dead silent elevator rides – when she’s still going to the office.
So I asked a CPS spokeswoman: Did Shellman support the utility’s decision to sue the gas suppliers and ERCOT, yes or no?
A few hours later I received this reply via SMS: “Carolyn has been actively involved in the implementation of the legal strategy and our fight for our customers.”
What’s different than thinking it’s a good idea.
From what I’ve heard, Shellman is a conservative, cautious lawyer who took her role at CPS very seriously. It is incomprehensible that their decision to leave the company had nothing to do with the biggest legal move the utility company has ever made.
The stakes for CPS and Gold Williams are enormous. Ultimately, how much customers’ monthly bills go up depends on how much debt CPS can pay off through the legal system.
Taken together, the gas bills are around $ 700 million.
My own opinion: The energy company’s processor orgy is at least as much about creating the appearance of fighting for the little guy as it is about claiming that suppliers are charging grossly unfair prices.
On Thursday, CPS announced Shellman’s interim replacement and flaunted its litigation on behalf of customers.
“Shanna Ramirez, our new interim Chief Legal & Ethics Officer, General Counsel and Secretary of the Board of Directors, will help fuel our ongoing efforts to protect our customers from inflated, unlawful and illegal prices due to the Uri winter storm,” the spokeswoman said again via text message .
You might ask: why does CPS feel compelled to get involved in political theater?
CPS – and its five-member board of trustees – is structured in such a way that it functions largely like a company, unaffected by the politics of the town hall. Specifically, all that remains for the members of the power council on paper is to approve or reject interest rate hikes.
But utility independence is partly an illusion.
Mayor holds the key
From his early days as a community utility company, the Mayor of San Antonio has sat on the CPS board and wielded oversized power – as he was the only one at the table placed there by San Antonio voters. He or she is also the only trustee in constant contact with all 10 city council members.
If you doubt a mayor’s ability to relocate CPS, just remember that a decade ago, then-Mayor Julián Castro cleverly derailed plans for a major expansion of the Matagorda County nuclear power plant, which CPS co-owns.
Mayor Ron Nirenberg has only publicly endorsed CPS’s many storm-related lawsuits.
And how does he feel about running Gold-Williams? Mendoza-Moyers asked Nirenberg this question on Tuesday.
“We’re working again to ensure that our award-winning utility fights for consumers and that Paula continues to fight for them,” replied Nirenberg.
“Full support” are not the words that come to mind.