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Change-up at CPS Energy isn’t exactly a clean sweep

Greg Harman
gharman@sacurrent.com

It's obviously well past time to change the window dressing at CPS Energy. In replacing “resignation effective immediately” GM Steve Bartley and “two weeks to collect my things” Nuclear Veep and Board Secretary Bob Temple, the remaining Board of Trustees at San Antonio’s City-owned utility turned to a fresh face.

Jelynne LeBlanc Burley’s (left) utility experience is limited.

She only joined the utility last April as Senior Vice President and Chief Administrative Officer “overseeing CPS Energy’s organizational excellence and shared services functions,” according to her company bio. Prior to her rapid ascendance this week to Bartley's former post at the top of CPS she was an assistant city manager with the City of San Antonio. But in the halls of CPS these days limited exposure is the sort of exposure most prized.

One of the sweetest laurels in her CV is perhaps the fact she is not the utility’s marginalized CEO Milton Lee. [See “Lee’s Electric Company,” July 22, 2009]

Lee was the one who hatched the expansion plans for the South Texas Project nuclear complex in Matagorda County before turning over the sales job to a coached Bartley. Lee continued to enjoy a seat at the table, but not one he was expected to animate. When it suited him, as it did when the TV torches flipped on over Toshibagate, the chair he enjoyed most was at the back of the room.

But the powerplay of the week doesn’t have Lee’s name on it. He’s being allowed to linger in the shake-up inspired by the failure of some in leadership to disclose to the Board and City Council that Toshiba’s running cost estimate for the nuclear expansion was $4 billion more than the figure Bartley had been selling the city all summer.

“The investigation showed from his perspective, from all their data, that Milton was unaware,” incoming CPS Board Chair Derrick Howard told the Current. Highly dubious given his joined-at-the-hip mentoring connection to Bartley.

But rather than gun for Lee, Mayor Julián Castro wants the heads of Board Chair Aurora Geis and cohort Board member Steve Hennigan.

Geis complained to the daily that Castro was attempting to try her in public with his call for her resignation, but Castro said this morning he has asked Geis to step aside three times already.

"It was my desire to handle this quietly and respectfully so that the community and the utility could move forward into a new era of transparency," Castro said this morning.
 
"It is regrettable that, to this day, neither Aurora Geis nor Steve Hennigan have expressed any public indignation about material information being withheld from the board and, most importantly, the public. It is that lack of a proper response to this crisis which has contributed to the current level of public distrust of CPS Energy.”

Of Lee, who some insiders have called “the elephant in the room,” Howard said: “In my opinion, and I think in utility language, he has a very short life … I think there is some value that he can offer for this short remaining period. We will extract that as a board, as the council sees necessary. We’ll be working diligently to open a new chapter.”

Jeez. It seems like only yesterday that local business community, spurred on by vocal (former) Council member Sheila McNeil, were clamoring to keep the retiring Milton at the utility in order to better steer the city through this most complex nuclear decision.

Geis failed to return a call for comment Monday. However, in creating a new board, the emphasis must be on importing those with a grasp of the decentralized energy system that Geis, despite a irrepressible hunger for a second helping of nuke first, continually promoted.

Beyond the fight for Board resignations, however, the subplot in this power drama is what will we the public know and when will we know it. That is, will the internal investigation that resulted in Bartley and Temple’s exit be made public?

“We are pushing hard to get a version released that is as inclusive as possible,” Howard said. “We’re obviously getting information from legal counsel that there are certain things that are by certain contracts are required to be held back … [but] the public needs to know.”

City Attorney Michael Bernard failed to return a call for clarification on this point.

When Howard tells me “there are a lot of attorneys looking at this information,” he’s laughing, as if I could have no idea how many “a lot” of attorneys really is, before adding: “We need to ask: is it overly protective or not.”

Thank you, Mr. Howard.

---

Other nuggets from the CPS press release:

The Board also announced that Michael Kotara and Jim Nesrsta, the two CPS Energy executives suspended at the outset of the investigation, were reinstated, with Kotara reassigned to the position of senior vice president, Energy Development. Bob Temple, deputy general counsel, will resign from CPS Energy on Dec. 15.

The Board of Trustees, after a full review and deliberation on the draft findings of the investigation, also directed that the following actions be taken in the best interests of CPS Energy:

* The Board will accelerate its previously announced search for a permanent chief executive officer; and

* The Board directs an immediate review of CPS Energy’s communications procedures to institutionalize effective communications at all levels.

Board Chair Aurora Geis said CPS Energy will strengthen regular and effective internal communications procedures as well as communications with the Board of Trustees and the San Antonio City Council.

The personnel changes and Board directives came after the Board of Trustees received the draft results of an investigation into why a preliminary cost estimate for Units 3 and 4 at STP was not shared in a timely manner.

Investigators concluded that certain CPS Energy executive employees were aware of the revised estimate prior to its disclosure in late October, but felt it was an informal estimate unsupported by data, meant only to be a bargaining figure by the contractor and likely to be substantially reduced before the formal estimate due Dec. 31, 2009. The investigators concluded that there was no malicious or intentional effort to withhold information from the Board of Trustees or the City Council.

“These personnel changes will help CPS Energy put this matter behind us and focus on our important work of meeting the energy needs of this community,” Geis said. “I know this has been a difficult time, but I want to thank the CPS Energy employees who have remained committed to serving our community.”

“We’re committed to operating CPS Energy in a manner that builds trust and confidence with the City Council and the people of this community now and in the future,” added Derrick Howard, Board vice chair, who will become chairman of the Board in January.

The Board of Trustees ordered the investigation Nov. 3 and retained the law firm of Ogletree, Deakins, Nash, Smoak & Stewart, which had no previous business ties to CPS Energy, to lead it along with Helen Madison, CPS Energy’s chief audit and ethics officer.

The investigation team reviewed hundreds of e-mails, as well as communications protocols, contracts, employee schedules, notes, call logs and presentations. The team also interviewed 16 individuals.

Geis noted that since the disclosure of the revised estimate in late October, certain members of the Board of Trustees have been in regular contact with members of the City Council and the Mayor’s office to ensure that the City Council is appropriately apprised of developments at CPS Energy.

Geis added that the regrettable communications failure should not foreclose an informed and transparent discussion of the pros and cons of participating in STP Units 3 and 4, saying that the Board of Trustees will continue to assess the financial and environmental costs of alternative energy sources with a view toward addressing San Antonio’s energy needs in the most efficient way possible.

“The South Texas Project is a vital component of a diverse energy mix that has resulted in some of the lowest utility rates in the country,” said Geis. “If it makes sense for us to participate in Units 3 or 4, we should do so. If it doesn’t, we will seek other ways to maintain a diverse energy mix that meets the needs of the people we serve.”


Meanwhile Temple gets feted during his dropkick.

From another CPS press release:

Bob Temple, CPS Energy’s vice president of nuclear development, today announced his intention to leave CPS Energy to pursue other interests. He will resign his duties as secretary to the Board of Trustees and as part of the company’s nuclear development team effective immediately and will resign from CPS Energy effective Dec. 15, 2009.

“Bob has been a dedicated employee and a valuable contributor to CPS Energy,” said Aurora Geis, chair of the CPS Energy Board of Trustees. “He has earned our gratitude for his contributions to CPS Energy, and we thank him for his willingness to aid in the orderly transition of his responsibilities. We wish him all the best.”

Temple has helped CPS Energy achieve several significant milestones during his time with the company, including leading the CPS Energy team in negotiating a contract for engineering, construction and procurement of new nuclear units at the South Texas Project (STP) power plant site. Temple also led the legal team in getting an air permit for the Spruce Unit 2 coal-fired power plant, which is nearing completion. He was CPS Energy’s lead attorney in completing the purchase of an additional 12 percent interest in STP Units 1 and 2.

Temple was named vice president of nuclear development for CPS Energy in 2009.  He has served as deputy general counsel and assistant secretary to the Board since 2007 and was named secretary in 2009. Temple joined CPS Energy in 2004 as the director for regulatory and contract law with almost 25 years of experience in the electric utility industry.

Posted by gharman on 12/1/2009 11:16:36 AM
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