Rivard Report: Doyle Beneby, thanks for agreeing to what we suppose will be our last long form interview with you as president and CEO of CPS Energy. Your recent announcement of your new position and comments that you will be staying in San Antonio for the next 12-18 months has us intrigued, and we wonder if we will be interviewing you again in a different capacity. Can you share your professional plans with our readers?
Doyle Beneby: As I’m sure you and your readers have seen, I’m enthusiastic about my new opportunity with New Generation Power International, an international renewable energy company. This organization allows me the platform to champion renewable energy technology development on a global scale.
RR: Recently the CPS Energy board asked you to stay on for an additional 30 days. What should our readers read in to that extension request if anything?
DB: The City of San Antonio and CPS Energy have provided me the best experience of my professional career and I feel an incredible obligation to help our board in any way that I can. Therefore, I agreed to stay an extra month when asked. As for whether or not your readers should read into that, I will leave that up to them.
RR: The selection of Paula Gold-Williams as interim CEO was a surprise to many. How do you think she will perform in this role?
DB: Paula is an extremely capable and accomplished executive. I certainly wasn’t surprise by the appointment, and I expect her to do well.
RR: Let’s talk about your five-year tenure at CPS Energy. It’s hard to engage in self-assessment, but how do you think you did? Did you accomplish all the goals you or the trustees set when you were hired?
DB: When I arrived at CPS Energy, I thought it was imperative to restore community and employee trust by being as transparent as possible. We also needed to map out a long-term strategic plan that would put us on a path to decarbonize our fleet and maintain an environment of low rates. Based on those factors, I would give myself a passing grade.
RR: You are always quick to credit your leadership team when it comes to discussing achievements or performance. You put the majority of your senior leaders in their present jobs. Did you accomplish everything you wanted to do in terms of realigning the utility’s senior leadership?
DB: Over time, we were able to realign the senior leadership team to focus on the vertically integrated functions of our utility. Generation and Strategy, Customers and Electric Delivery, and Shared Services. We were also able to develop talent within the company, and compliment our internal talent with external executive hires as well. I’m most proud of the diversity that we were able to implement within the most senior ranks of our company.
RR: So let’s talk about the accomplishments you and your team can count in the past five years. We’ve written about some of those, from diverting hundreds of millions of dollars away from coal plant upgrades to investing in renewable energy and sparking what you’ve called the New Energy Economy. Share with us your ranking of the various big changes that have been made.
DB: We have been fortunate enough to have several significant achievements. Among those are improving our employee safety record, restoring public trust, eliminating the need for several rate increases, and maintaining the best performance record in the history of the company.
RR: How successful were your efforts to get companies to base here (i.e. OCI and Mission Solar), create jobs here and become part of the San Antonio economy? Do you envision CPS Energy leveraging more of that kind of local job growth in the future, and if so, in what areas?
DB: I’d say our New Energy Economy has been successful thus far in establishing a clean tech ecosystem in San Antonio. We are ahead of our planned job counts and annual economic impact calculations, having achieved our $1.2B milestone two years ahead of schedule. The next leader of CPS Energy has an opportunity to continue to leverage local job growth, and to look for technologies that can be deployed at CPS Energy. The new EPIcenter innovation hub should also be attractive to prospective companies.
RR: We’d have to put the five deferred rate increases over the last five years at the top of our list. Was that accomplished simply through expense controls and productivity improvements? Isn’t a rate hike inevitable sooner than later?
DB: While cost control measures were helpful, the big drivers were reducing long-term capital by not investing significant dollars in pollution control equipment at our aging coal and gas plants, increasing productivity and leveraging new technologies.
RR: San Antonio has a very unique business model with CPS Energy operating independently as a municipal owned utility and then contributing 14% of its revenues to the City of San Antonio, which accounts for a significant portion of the City’s General Fund. After five years, do you consider that a model of excellence nationally, or would you somehow change it if you could have changed it?
DB: Our governance model works extremely well for us, and I credit the model with allowing us the flexibility to achieve what we have here at CPS Energy.
RR: You came to CPS Energy from the private sector, the merchant utility side. How would you sum up your experience spending five years as a public figure, working with an appointed board, two different mayors, City Council, and seeing your compensation debated so publicly and divisively? Will you ever accept another public sector opportunity or are you staying put with your return to the private sector?
DB: It has been an interesting journey, but I wouldn’t have changed anything. As for a future in the public sector, that’s probably not too likely.
RR: Turning to the broader issues of climate change, federal oversight over air quality and the environment, and the state of the solar and wind energy industries, how do you feel about the SA2020 goal of achieving 20% renewables in the next five years? Mayor Taylor’s SA Tomorrow initiative looks out over the horizon 35 years at San Antonio in 2050, a city and metro area that will grow by at least one million more people. What kind of energy profile will CPS Energy have in 2050? Will every available rooftop have solar by then?
DB: The 20% renewable energy capacity goal that can be found in SA2020 actually stemmed from our CPSE Vision2020 goal. We are on track to achieve this goal by the year 2020. As for 2050 and beyond, I’d imagine that the majority of our rooftops will have solar, and by that time we will have some sort of distributed battery storage solution as well.
RR: What about nuclear energy? The South Texas Plant in Baytown is a key part of the CPS Energy portfolio and as recently as a few years ago was slated for expansion. The high cost was responsible for that expansion being shelved and the Fukushima disaster in Japan in 2011 led to a moratorium on all nuclear expansion. Do you see that changing in the United States in the coming years or decades?
DB: Nuclear will continue to be a significant component of the U.S. energy mix in order to achieve CO2 emissions compliance targets.
RR: For at least decade prior to your arrival, San Antonio has debated the merits of government consolidation, mostly at the city-county level, but also school districts. Do you see cities consolidating utilities in the future, managing energy and water resources and environmental challenges in a single entity? Can you envision a combined CPS Energy and San Antonio Water System? What kind of economies of scale or other savings could be achieved by such a merger?
DB: Obviously, the respective boards, community and elected officials would need to weigh in to any consolidation of municipal entities including CPS Energy and SAWS. However, I do believe there would be benefits of economies of size and scale for the community, that would be seen through lower costs and competitive rates.
RR: Some in the downtown and development community were surprised to see CPS Energy move ahead with its request for proposals from design/build firms for a new headquarters. Will you leave that decision to your successor or is there more imminent news on that front? Have you and your committee members decided whether to go with new construction or consider existing commercial office space?
DB: The headquarters project is being managed internally by Paula Gold-Williams and her executive team. I fully expect for Paula and team to continue on with our plan to secure a new downtown headquarters solution for our employees, and I would imagine that decision will be made before the end of the year.
RR: CPS Energy is one of several public entities in need of more expansive downtown office space. The San Antonio Independent District administrative staff is even more dispersed, and Alamo Colleges trusted have voted to build a new central office off Broadway on the former Playland site. Given its portfolio of real estate holdings, can CPS Energy sell enough properties to make a new headquarters a “revenue neutral” proposition, as the City did in its deal with Weston Urban and Frost Bank?
DB: That’s the plan. There will be no rate increase impact to our customers.
RR: Speaking of real estate, CPS Energy announced plans earlier this year to develop a Center for Innovation (EPIcenter) at the former Mission Road Power Plant, operated by a non-profit funded at least in part by CPS Energy partners. Will that project survive your departure, or could it become part of a larger real estate transaction to fund a new headquarters location? What exactly do you envision there? Will it be a sort of energy museum and demonstration sight for new technologies or something else?
DB: The EPIcenter plans will continue on. In fact, we have incorporated and are currently conducting a search for the center’s executive director. The EPIcenter will be an energy museum, clean technology showcase and research and development (R&D) lab, that offers office and conference space as well.
RR: You’ve lived in a number of U.S. cities before coming to San Antonio, including, I believe, Miami, Chicago, Seattle and Philadelphia. As you see all the efforts underway to make San Antonio a better place to live and work, what did you and your family like about living here and what did you find missing that other cities offered?
DB: Mrs. Beneby and I enjoyed the weather, and the small town feel. San Antonio is also a great place to conduct business and raise a family, but we could sure benefit from a few more direct flight options.
RR: More and more developers in the urban core are saying that San Antonio needs to invest in its streets and sidewalks to complement all the private sector development underway to make the city more livable. Burying utility lines on streets like Broadway, they believe, is key to such ‘complete street’ development. CPS Energy did bury the utilities on Broadway in front of the Do-Seum, which we understand was made possible by the $20 million gift from Charles Butt, Chairman and CEO of H-E-B, to the Do-Seum. Do you see CPS Energy burying more utilities in the center city?
DB: It’s definitely a costly solution, but CPS Energy is always willing to discuss community needs and solutions.
RR: Doyle Beneby, thank you for your leadership at CPS Energy and in San Antonio and thanks for the interview. We hope this isn’t our last interview with you. Best wishes to you and your family in your new endeavor.
DB: Thank you for your interest, and I appreciate your top quality reporting. As for me, I’d like to personally thank the CPS Energy team and the citizens of our great city, for allowing my family and I to become a part of the community. Our kids are true San Antonians and they won’t ever forget that.
*Top image: CPS Energy President and CEO Doyle Beneby gathers his belongings to exit the utility’s board room. Photo by Scott Ball.
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