Castro calls for two on CPS board to resign

[JudynTX]

This whole ordeal is such a cluster .



Mayor Julián Castro on Monday asked the two longest-serving members of CPS Energy's board of trustees to step down, saying they shoulder some responsibility for the breakdown in credibility at the utility.

Board Chairwoman Aurora Geis and trustee Steve Hennigan said they won't resign, setting up more uncertainty at CPS, which is already reeling from two staff resignations caused by a debacle over nuclear cost estimates.

“I find this bewildering because the board was created to have an independent governance structure for that reason — to insulate the board from politics,” Geis said. She added that she was worried that further instability could harm the utility's credit rating, which could cost the community “tens of millions” of dollars.

The mayor's public call for a change in board leadership was echoed by several City Council members Monday. They said they agreed with Castro that it was a necessary move to begin rebuilding public trust.

Castro said Geis and Hennigan represent the old-guard, closed culture at CPS.

“I can't make them do it, but, in the best interest of the city and utility, they should resign,” said Castro, who as mayor is one of the five members of the board.

Geis said the mayor has never asked her directly to resign and that she was surprised to learn from a reporter of his request.

“I think there is going to be the appropriate time to have this conversation, but the mayor has to bring this conversation into the boardroom — not into the press,” she said. “We have a fiduciary obligation for an orderly transition.”

In an e-mail this morning, Castro disputed Geis' account, saying the mayor did ask her to resign.

"The truth of the matter is I have asked the board chair to resign on three occasions," Castro said in the e-mail. "It was my desire to handle this quietly and respectfully so that the community and the utility could move forward into a new era of transparency."

The battle over the board came only hours after it announced the results of its internal investigation into why estimates of costs for the nuclear expansion project from contractor Toshiba Inc. that were $4 billion higher than CPS' estimate were kept from the board. CPS has estimated that the nuclear plant expansion would cost $13 billion.

The board Monday named CPS' Chief Administrative Officer Jelynne LeBlanc-Burley as new interim general manager to replace Steve Bartley, who resigned Wednesday. It also announced that Robert Temple, a senior member of the utility's nuclear development team, would resign effective Dec. 15.

Hennigan, who has been on the board since 2001, said he had no intention of leaving the utility at a time of such turmoil. He lobbied for the full results of the internal investigation to be made public as soon as possible.

“The nuclear failure, from my interpretation and understanding of the report, is not a board failure,” Hennigan said. “I have no inclination to step down at a time when CPS needs strong board members. ... One of the things I bring to the board is historical knowledge that no one has.”

The investigation didn't show any malicious intent on the part of CPS employees, according to a board statement issued Monday. But it did find that there might have been an “error in judgment” on the part of at least one employee. Ultimately, the investigation blames the “failures of communication” on members of the nuclear development team viewing Toshiba's cost estimates as a negotiation ploy not worth bringing to the board, or, in some cases, their direct supervisor.

Existence of the higher estimate was leaked to the mayor's office and the San Antonio Express-News just two days before the City Council was set to vote for $400 million in financing to keep the proposed nuclear deal on track.

Castro blamed Hennigan and Geis with fostering the environment at CPS that made such a lapse possible. They did so, he said, by “encouraging a sentiment among CPS executives that theirs were the only opinions that mattered and not the board's, not the council's and not the ratepayers.”

Castro said he was particularly upset by public comments made by Geis shortly after news of the high cost estimate broke in which she supported management and its decision to keep information from the board. Geis later said she made the remarks in the early days of the crisis before all the information had come out. She has since publicly apologized on behalf of CPS for the incident.

Castro also cited a “conflict of interest” caused by Hennigan and Geis both working at San Antonio Federal Credit Union, where Hennigan is chief financial officer and Geis is first vice president of lending.

Geis, who has served on the CPS board since 2002, was hired by the credit union in 2007.

Hennigan said he had no part in bringing Geis to the utility's board or to the credit union. He did say they discussed the employment situation with the board and promised that the two would never report to the same supervisor at the credit union.

“We were in full disclosure on this,” Hennigan said. “I didn't hire her. The CEO did.”

Board members are appointed by the board, with the approval of the City Council, for five-year terms. They can serve a maximum of two terms. A three-member majority of the board can remove a member.

Castro's call for a board shake-up came on the same day the utility hoped to turn headlines around by handing the day-to-day operations to LeBlanc-Burley. Milton Lee remains CEO.

The board also announced that the two executives who were suspended during the investigation will remain with CPS. Mike Kotara's le was changed from executive vice president in charge of energy development to senior vice president of energy development. Jim Nesrsta, vice president of power plant construction, kept his position.

CPS officials spent the summer telling the community that the expansion, if approved, would cost $13 billion. At that price, utility officials said, it would be the best method for meeting the community's future energy needs while reducing the city's carbon footprint.

http://www.mysanantonio.com/news/New...rgy_named.html

[CosmicCowboy]

Castro's playing politics big time. That's the whole point of having an independent CPS board so City Council can't push them around.