How To Grow, Serve, And Innovate: The CPS Energy Challenge

CPS Energy in San Antonio, Texas, is something of a laboratory for utilities. Its current test — and one for many utilities — is to keep a focus on reliability at all times, while accommodating the new and the renewable with as much speed as possible.

It is both the largest municipally owned electric and gas utility in the United States and is governed by a five-member board. It serves over 907,000 electricity customers and 370,000 gas customers.

As San Antonio is one of the fastest-growing cities in Texas, which itself is one of the fastest growing states, CPS Energy must increase its generation dramatically as it strives to close its remaining coal plants.

To do this, it is committed to new gas for “firming” — in CPS Energy parlance — to balance the intermittency of renewables.

CPS Energy has been a leader in the adoption of wind and solar generation, but President and CEO Rudy Garza told me in a recent interview at the company’s headquarters that he leans toward solar because of its predictability, although wind is important in the CPS Energy mix as well.

“When the wind stops blowing, that generation is gone,” Garza told me. “Wind has value because it’s cheap, when it’s there. But I’ll take solar over wind in today’s market, especially in the summer months in Texas.”

Batteries Are Essential

That is why, Garza said, CPS Energy is keenly interested in batteries. It is installing a 50-megawatt (MW) battery in conjunction with a 100-MW, utility-scale solar farm. “That makes it dispatchable,” he said.

In Texas, he added, solar availability ends at 6 p.m., “but our evening peak extends until 9 p.m., so batteries are important.”

CPS Energy began its innovative energy quest in a determined way in 2020: It put out a request for proposals on future generation and storage.

That RFP was, in effect, a request for ideas. They flooded in and the utility has been implementing some of the most practical ideas ever since.

In that way, CPS Energy is both traditional and cutting-edge.

Some of these ideas, like compressed air storage and similar futuristic ideas, may be pursued in the out-years on a utility-scale basis. But for the near-term, wind, solar and batteries caught the utility’s eye — and became a plan of action.

Apart from wind, solar and batteries, Garza said the utility is going ahead with a small (1 MW) pump storage project in the Hill Country, which he hopes will lead to more ambitious projects in the future.

Another renewable getting attention at CPS is geothermal.

“We are sitting on top of a geothermal resource, and we would like to develop it,” Garza said.

The resource consists of “hot rocks.” These are volcanic, hot-dry rocks that can become an energy resource by injecting water into the formations and using the resulting steam to power utility turbines.

In CPS Energy’s enthusiasm for geothermal, Garza, who assumed the top job in 202o, reflects a long tradition that has made CPS Energy Texas’ top solar and wind utility, and in wind, No. 5 in the nation. The utility is in the midst of a five-year program to reexamine, and sometimes re-engineer, aspects of its system.

Military Looms Large

In the complex customer mix at CPS Energy, one customer looms large: the U.S. military and its huge installation served by the utility. “We’re military City USA here,” Garza said of San Antonio.

If CPS Energy is a laboratory, the military is a critical component of that, fostering cooperation in technologies and sometimes just in ideas.

An announcement heard in the San Antonio airport from the joint base commander talks about 35,000 personnel and dependents in the area, which gives an idea of the sheer size of the military presence in San Antonio, and on the CPS Energy system.

In the background, yet ever-present in the utility’s planning is the phenomenal growth which Texas has been experiencing, along with the particular growth in San Antonio. Gaza said they are able to handle this, but the state government needs to plan for the power supply for all of Texas going forward.

As Garza sees it, the whole state will need to take actions to ensure the reliability of the statewide grid, operated by ERCOT.

A visitor to the CPS Energy headquarters is struck by two things: the friendliness of its people and the sense of mission. The utility went through a period of criticism. Under Garza that has subsided and been replaced by a general sense that CPS Energy belongs to its community and that the community belongs at its utility.

A journey along the frontier of the new is underway. And it reflects the City of San Antonio, fast-growing and modern, but also possessed of a proud history which can be savored in the Spanish colonial-era buildings in the old town.

CPS, founded in 1860 and bought by the city in 1942, has a proud history too.