CPS Energy\u2019s Board of Trustees has identified a new CEO and it\u2019s a familiar face.<\/p>\n
San Antonio\u2019s publicly owned utility company announced plans to hire interim CEO Frank Almaraz as its full-time leader at a Monday board meeting.<\/p>\n
CPS Energy made Almaraz interim CEO in June<\/a>. Before that, he had served as chief operating officer for five months. He worked at CPS Energy between 2011 and 2021.<\/p>\n Board Chair Francine Romero said the utility had initially launched a broader search before deciding to keep Almaraz on permanently.<\/p>\n \u201cWe need a leader who understands the funding requirements and infrastructure demands that support our own growing community and the statewide grid,\u201d she said. \u201cWe determined that Frank Almaraz is the president and CEO that CPS Energy needs now, because in addition to meeting the requirements above, Mr. Almaraz has more than a decade of leadership within the municipal energy model.\u201d<\/p>\n Romero added that a one-month contract negotiation period would begin now.<\/p>\n CPS Energy spokesperson Milady Nazir emphasized that nothing is finalized until Almaraz formally accepts the job.<\/p>\n \u201cContract negotiations are still in process,\u201d she said.<\/p>\n Almaraz would replace Rudy Garza, CPS Energy\u2019s previous CEO, who left to lead the Lower Colorado River Authority<\/a> at the beginning of June.<\/p>\n Almaraz has already overseen a busy summer, butting heads with state officials after Gov. Greg Abbott announced a proposal to get rid of municipally owned utilities<\/a>.<\/p>\n San Antonio also suffered widespread power outages<\/a> after wind and rain tore through the West Side<\/a> in August. Over 100,000 residents lost power due to downed power lines and broken infrastructure.<\/p>\n He\u2019ll have his work cut out for him going forward. In an interview Monday morning, CPS Energy officials said multiple revenue streams were falling short of projections.<\/p>\n Chief Financial Officer and Treasurer Cory Kuchinsky said that revenue from local customers was around $17 million short of what had been anticipated and wholesale revenue, which CPS energy gets when it sells power back into the Texas grid, was between $20 million and $25 million below projections.<\/p>\n Milder-than-expected weather meant there was less demand for power from San Antonio businesses and residents this year. Statewide, more power generation and battery storage has been built, which means there\u2019s less demand for wholesale electricity. Kuchinsky added that residential growth had also been lower than anticipated, a trend governments and taxing districts are dealing with across the region.<\/p>\n CPS Energy was already facing a $50 million budget gap<\/a>, and officials have raised the possibility of raising rates. In April, Kuchinsky said the utility would wait until after the summer to assess its financial situation.<\/p>\n On Monday, he said CPS Energy was still assessing how revenue shortfalls would impact the utility\u2019s cash on hand, debt-to-capitalization ratio and ability to cover the debt it has.<\/p>\n \u201cI\u2019d still put that in the [to be decided] category. Again, we have new factors that we didn\u2019t know at the beginning of the year,\u201d Kuchinsky said.<\/p>\n Any rate increase would need to be approved by San Antonio City Council, which oversees the utility. If CPS Energy pursues a rate increase, Almaraz would be making the ask at a time when taxes and water rates are also set to go up<\/a> \u2014 the San Antonio Water System is trying to adjust its rates for a second time<\/a> this year after City Council postponed a rate increase in June<\/a>.<\/p>\n Kuchinsky noted that CPS Energy was applying for a federal credit for its nuclear power operations, which it also received last year. That credit could be between $110 million and $115 million and would allow funds to be reallocated from nuclear plant operation and cover its shortfalls.<\/p>\n He said CPS Energy applied for the credit at the end of spring, and it would take six or seven months to receive that credit.<\/p>\n Disclosure: Cory Kuchinsky is a member of the TPR board of directors. See a full list of board members here<\/a>.<\/p>\n Update: This story has been updated with additional comment from CPS Energy.<\/p>\n