CPS Energy executives not only earn more than their counterparts at the San Antonio Water System, they also have much larger expense accounts, mostly driven by their frequent travel.
According to a review of nearly two years of records from the two utilities’ expense accounts by the Rivard Report, CPS Energy’s senior leadership frequently travels to conferences, business meetings, training sessions, and awards ceremonies around the nation, sometimes around the world. SAWS’ top leadership, by contrast, tends to spend most of its time in San Antonio, records show.
However, SAWS officials also get some perks that CPS Energy leaders don’t have, including allowances for vehicles and cellphones.
Between early 2017 and November 2018, expenses for CPS Energy’s top leadership were 10 times higher than those for their counterparts at the San Antonio Water System, records show.
Though these expenditures make up only fractions of the utilities’ overall budgets, the issue of how public dollars are spent has proven to be an important one for San Antonio residents. Mayor Ron Nirenberg, a member of both utilities’ boards in his official capacity, has come out against bonuses at both and questioned the disparities in spending between the two.
“The nature of the industries in which they work are very different, but it does beg the question: Why are the business expenses so dramatically different from one utility to the next?” Nirenberg said. “It will elicit some important conversations about how we structure these kinds of executive benefits.” The gap further reveals the difference in culture between the two utilities. Asked in a July 26 interview why CPS Energy’s expenses are so much higher than SAWS’, CPS Energy President and CEO Paula Gold-Williams said they reflect the expenses of business executives working for a leading utility that happens to be owned by a City.
CPS Energy board Chair John Steen, a former Texas secretary of state, called the comparison unfair because of the difference in the utilities’ size.
CPS Energy has 3,100 employees serving 840,000 electric and 350,000 natural gas customer accounts. SAWS has around 1,700 employees serving 453,000 accounts. CPS Energy’s revenues last year were $2.8 billion, compared with SAWS’ $828 million in revenues. CPS Energy generated $361 million in revenue for the City last year, compared with SAWS’ $18 million.
CPS Energy also has a larger executive leadership team, with 26 members, compared with SAWS’ 13 members. The Rivard Report sought records only for employees the utilities have said are on their executive teams.
“Look at our size and what we’re doing,” CPS Energy board Chair John Steen said. “Is it really a fair comparison? Wouldn’t it be fairer to compare us to our peer utilities when you’re looking at expenses?”
To compare salaries with pay scales at similar public utilities, the Rivard Report obtained data on CEO pay for many of the top public power and water utilities around the country. Because of the time, expense, and patchwork of open records laws across the U.S., the news outlet was not able to do so for expense records, making SAWS and CPS Energy its only basis for comparison.
Asked about their expenditures, SAWS officials emphasized the utility’s role as a public entity with a budget that relies on its customers’ payments.
“We have one pot of money to go to, and it’s our customers” said Gavino Ramos, SAWS’ vice president of communications.
In June 2018, six senior CPS Energy officials traveled to Washington, D.C., for the Keystone Policy Center’s annual leadership awards.
The Colorado-based nonprofit think tank had chosen Gold-Williams to receive one of its annual awards, which its website says honor “exemplary leaders and decision-makers.” Others chosen that year were NBC News chief foreign affairs correspondent Andrea Mitchell, World Resources Institute CEO Andrew Steer, and Louisiana Gov. John Bel Edwards.
The CPS Energy group’s travel expenses – flights, hotels, meals, and transportation – added up to more than $10,000 for a four-day trip.
The Keystone trip was one of the more expensive business trips reviewed by the Rivard Report. Most trips did not involve as many employees traveling to the same place.
A few times during 2017 and 2018, CPS Energy officials traveled abroad for work. In November 2017, when Fred Bonewell, CPS Energy’s chief security, safety, and gas solutions officer, and John Bonnin, vice president of energy supply and market operations, traveled to Tel Aviv, Israel.
They were there to visit CyberGym, an IT training center to help those responsible for safeguarding critical infrastructure cope with cybersecurity threats, an increasing concern for CPS Energy. The trip, lasting nearly a week, cost almost $7,800, records show.
Other expenses were smaller but recurring. For example, CPS Energy pays for Gold-Williams’ $145 monthly membership to the Plaza Club, a business club, restaurant, and bar on the top floor of the old Frost Bank tower. Multiple executives get their $90 monthly Wall Street Journal subscriptions from the company. Frequent expenses include floral arrangements that cost more than $100 apiece for sympathy or congratulations for other employees.
SAWS logged few of these types of expenses. Its biggest expense reimbursements went to Donovan Burton, vice president of government relations and water resources, whose multiple trips to Austin and a few out-of-state trips added up to nearly $19,000 over two years. Such travel, usually for the purpose of meeting with State officials, is typical for government relations employees, including those at the City of San Antonio.
At CPS Energy, seven executives spent more on travel than Burton did over almost the same time period. Gold-Williams spent the most, compiling nearly $93,000 in travel expenses.
Gold-Williams and Steen defended the expenses as well-documented and justifiable costs of doing business for energy executives operating in a global arena.
Referring to the trip to receive the Keystone award, Gold-Williams called the organization “the nexus point of what is really important, nationally,” on issues such as natural resources, food waste, energy, and education.
“In reality, when we’re supplying energy, a lot of those things matter,” Gold-Williams said.
Gold-Williams said business trips like these help CPS Energy executives gather information that helps them run the company more effectively, as well as influence energy policy in Washington.
The award meant recognition as an “energy thought leader on a national scale,” Gold-Williams said. “This is how CPS Energy, even being a municipal entity, ends up helping to shape where the energy industry is going and having the influence ultimately beyond our borders.”
Regarding the Tel Aviv trip, Gold-Williams and Steen said the relationship with CyberGym led to improved security practices throughout the utility, particularly when it comes to cybersecurity threats.
“Israel has one of the most sophisticated security systems, especially on the cyber side,” Gold-Williams said. “They have real border threats on top of international targeting. But they are extremely helpful in sharing information.”
Steen said he personally reviews the reports and justifications for Gold-Williams’ expenses.
“I think we’ve got good documentation on it,” he said. “You can lump it all together and come up with kind of a large figure, and somebody could say, ‘Well you’re being profligate, but really, look at the detail on it, and I think in each case … I’m confident that everything’s in good shape and nothing’s out of line.”
Nirenberg also seemed receptive to the argument that energy issues are more global than water and require more frequent travel.
“The dynamic of the energy industry is far different and, in many cases, more international than water,” Nirenberg said. “When I take a look at what the San Antonio Water System has to deal with, it is peculiar to the state of Texas. The energy industry is shaped by international discussion.”
Puente doesn’t see it that way. SAWS officials tend to regard the utility as a global water leader.
“Surface and groundwater law … [is] very particular to Texas,” Puente said. “But with any business that reaches as many people as either power or water, there’s local issues, there’s state issues, and there’s worldwide, global issues that we have to be able to be on top of.”
Puente argued that SAWS’ status is prominent enough to earn it membership in an international water and wastewater organization called Leading Utilities of the World in December 2017. He said he could have traveled abroad to make the case to the organization to include SAWS, but he chose to wait until they met close to San Antonio.
“I could have gone to Paris,” Puente said. “But I waited until they had their meeting in Austin.”
Puente said he tries whenever possible to avoid traveling using public money, saying, “I want to set an example.”
“Then, you don’t have to worry about what the rest of the executive team wants to do or doesn’t want to do,” Puente said. “And then they don’t have to worry about their directors, and then it cascades down. I really think that a large organization like SAWS, its culture can be influenced from the very top.”
Though its overall expenses are lower, SAWS pays its executives for their use of vehicles and cellphones. CPS Energy officials confirmed that their executives do not receive car and vehicle allowances.
In 2017, SAWS paid 11 members of its executive team a $6,000 vehicle allowance and a $480 cellphone allowance. One member received prorated amounts of $2,375 for vehicle allowance and $190 for cellphone after starting work at SAWS partway through the year. In 2018, both allowances dropped – to $5,500 per vehicle and $440 for cellphones.
Puente received a $7,200 vehicle allowance and $1,800 cellphone allowance in 2017. In 2018, he got a $6,600 vehicle allowance and $1,650 cellphone allowance.