Rudy Garza will be the next CEO and President of CPS Energy

Rudy Garza is on track to become CPS Energy’s next President and CEO.

The city utility board voted Tuesday to suspend the outside search for a new chief and begin negotiations with the 10-year CPS veteran, who has served as interim president and CEO since October.

Garza, 49, is set to become the permanent chief of the utility this fall. Since taking over 10 months ago amid institutional turmoil, he has guided CPS through numerous challenges.

“The need for consistent leadership as you go through a transition or transformation is very important,” said Trustee Janie Gonzalez, who led the CEO search. “I want to work with a leader who is accessible to the community. Someone who is willing to put in many hours to make themselves accessible and who really takes on some tough things that we need to address.”

Since taking over 10 months ago amid institutional turmoil, Garza has guided CPS through numerous challenges.

William Luther, Staff Photographer / Staff Photographer

A key step in completing the hiring will be the negotiation of Garza’s compensation package.

He currently earns $415,000 annually with no bonus. Garza has said that CPS needs to increase the selected individual’s salary.

“Money has never driven me. We will negotiate a fair deal and move on,” he said in an interview after the board vote. “I don’t expect this negotiation phase to become overly complicated.”

CPS looked at other candidates, but Gonzalez declined to say how far negotiations have gone with other suitors.

“We were presented with a lot of information,” she said, citing input the board received from a recruitment firm and the public.

intermediate successes

That year, Garza won city council approval for a long-awaited rate increase, giving CPS a much-needed boost in revenue. He has also pushed a new version of the utility’s energy efficiency and savings program, which has drawn criticism from some CPS trustees and council members who have called for the initiative to be paused.

And Garza — a former Corpus Christi assistant city manager with a keen flair for public relations — has become a fixture at city meetings. He has sought to work more closely with city officials after relations cooled under his predecessor, Paula Gold-Williams. Garza meets with City Manager Erik Walsh every few weeks — meetings that didn’t happen when Gold-Williams was CEO.

Mayor Ron Nirenberg said Garza’s tenure as interim CEO sold him on Tuesday.

“This is probably one of the most challenging times this organization has ever faced,” Nirenberg said, citing the transition to cleaner energy sources, labor shortages and extreme heat that have pushed utility bills to record highs this summer. “What I’ve seen is not only someone who has responded to these challenges, but has also helped ensure that the city government is a partner in this process.”

Four of the utility’s five trustees voted to begin negotiations with Garza. Gonzalez – who owns internet company Webhead – has been among Garza’s strongest supporters since his appointment as interim CEO.

Trustee John Steen abstained. Steen, an attorney and former Texas secretary of state, said he thinks the vote violates Texas’ open assembly laws. He often directs lists of pointed questions at Garza at board meetings, and the two have clashed since Garza became interim CEO.

‘Negative Place’

Garza said Tuesday that CPS was “in a negative place” on acquiring the utility.

In February 2021, Winter Storm Uri catalyzed a disaster at CPS. It spent huge sums — over $1 billion — buying natural gas and electricity while supplies were tight that week, and the ensuing tidal wave of debt threatened to overwhelm CPS.

Led by Gold-Williams, CPS launched numerous lawsuits alleging that suppliers had taken advantage of the situation to charge unlawfully high prices. Days later, the utility’s chief attorney and two of her deputies resigned. One of the attorneys who left the firm cited disagreements with Gold-Williams as the reason for her departure.

Months later, reports surfaced that Fred Bonewell, a former chief operating officer, made racially insensitive remarks at work and was spending company money on lavish dinners and chauffeurs. Gold-Williams had promoted him months earlier.

She resigned at the end of October.

When Garza took over, CPS was in the midst of requesting a price increase that Gold-Williams originally said would increase customer bills by more than 10 percent. Days after her departure, the request was reduced to less than 4 percent.

The tariff increase was approved in January after Garza assured council members he would restore the community’s trust in the utility and improve transparency.

to-do list

Developing a generational plan is an urgent priority for Garza and CPS.

The utility plans to shed its reliance on coal, shut down other aging power plants and add more renewable and natural gas-fired power generation capacity. Garza has said he will have a generational plan before the board for a vote by December.

The utility is expected to generate more solar power by the end of this year, and CPS plans to sign an agreement later this year to “rent” a gas-fired power plant and take ownership of the power generated.

CPS under Garza has also been exploring cutting-edge power generation technologies, such as geothermal, and initiated a carbon-free energy storage pilot with Quidnet Energy this spring.

In the face of calls from Steen and others to suspend spending on CPS’ efficiency and conservation program, Garza often advocated that the utility fund the program — dubbed STEP — which weathers the homes of low-income customers and incentivizes customers Buy efficient devices. In May, it approved $350 million in funding for STEP over the next five years.

Additionally, Garza has announced that CPS will begin considering changes to how it bills customers for electricity and gas next year, potentially to lower costs for low-income customers.

He has apparently gained the support of CPS staff, a key priority Garza identified when he entered the job, and CPS sought to fill as many as 400 vacancies. Hundreds of line workers and utility workers crowded into the lobby of CPS Energy’s headquarters on Tuesday afternoon to show their support for the board’s actions.

“We fully support Rudy Garza in becoming the permanent leader of this great organization,” said Ron Ramsey, foreman of the CPS service team and president of the local International Brotherhood of Electrical Workers. “I have no doubt that his experience and leadership skills make him the right choice for quarterback at CPS Energy.”

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