EDITORIAL: After the 2021 winter storm, Garza took CPS Energy from crisis to stability

When Rudy Garza took the reins at CPS Energy in late 2021, the city's electric utility was in crisis.

Saddled with more than $1 billion in debt from energy costs during Winter Storm Uri, CPS Energy's financial forecast was bleak, with Fitch Ratings and Moody's Investor Services changing their outlooks for the utility from stable to negative.

Even worse, CPS Energy had lost the confidence of its costumers, many of whom were left in the dark during Winter Storm Uri and nevertheless will be paying the storm's bill for years.

At such an unprecedented time, CPS Energy desperately needed a leader who would stabilize the utility and restore civic confidence.

Enter Garza, who became interim president and CEO in November 2021. He ditched the interim tag in September 2022, and he never looked back.

Now he has moved on, leaving CPS Energy to serve as the general manager for the Lower Colorado River Authority.

We wish Garza the best in his new role. It's not unusual for talented leaders to take on new challenges, and Garza spent 14 years with CPS Energy.

Nevertheless, we see Garza's departure from CPS Energy as coming too soon and therefore carrying much greater significance than a mere career move. Whatever Garza's reasons for leaving, his departure from CPS Energy at such a critical time should serve as a warning to City Council and Mayor Gina Ortiz Jones, who are often at odds with one another, about the importance of stable and collaborative governance.

It should underscore the necessity of making tough decisions - rate increases for CPS Energy and San Antonio Water System might be unpopular, but they are necessary - and fostering a political culture that attracts and retains talent.

Garza has left CPS Energy at a time when the City Council is fractured and divided, Jones can't keep staff and there is significant political pushback to a proposed rate increase for SAWS.

We're not saying Jones and City Council need to sing "Kumbaya" or shouldn't ask tough questions, but the loss of a talented leader should prompt introspection.

Under Garza's leadership, CPS Energy's financial outlook has stabilized. Council approved a 4.25% rate increase in 2023, but it did so with the understanding that another one would be needed as CPS Energy grapples with rapid growth and unprecedented power demand.

Also during Garza's tenure, CPS Energy moved to end the coal-fired power era in San Antonio, with trustees voting in January 2023 to shutter the J.K Spruce plant by 2028. The Spruce 1 unit will close, and the Spruce 2 unit will be converted to natural gas.

This was huge for the utility and a necessary step in honoring the city's Climate Action and Adaptation plan.

Not to be overlooked, CPS Energy also dramatically improved its communication with the public under Garza's leadership. The utility does an outstanding job of alerting consumers about incoming weather, potential outages and response times for repairs. Everyone knows what's coming, and how the utility is preparing for storms and mitigating outages.

After the atrocious lack of communication during Winter Storm Uri, this more assertive outreach and improved customer service make for a breath of fresh air.

The utility's next leader will need to build on these efforts. Just as the utility can't go backward in its communication with the public, it can't fall behind on infrastructure investment or in meeting energy demand while also embracing renewable energy sources.

The next permanent leader at CPS Energy - Chief Operating Officer Frank Almaraz is serving as interim president and CEO - will be running the utility at a time when data centers are placing unprecedented demands on the Texas power grid. CPS Energy will need to meet the demand, as well as the demands of population growth, while still embracing diverse energy sources.

In the near term, this almost certainly will require a greater reliance on natural gas. But in the longer term, it will require embracing rapidly developing battery technology coupled with solar and wind power, and perhaps even new developments in geothermal and micronuclear.

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Meeting these challenges will almost certainly require a rate increase.

One person does not define an organization, especially one as large and dynamic as CPS Energy. That would be unhealthy. But Garza's leadership radically changed CPS Energy for the better, taking it from crisis to stability.

As the city looks forward to a new leader, it would also be wise for City Council, Jones and CPS Energy trustees to consider how they might have encouraged Garza to stay.

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