CPS Energy – largest combined municipal utility in U.S.


“CPS Energy is a very progressive utility and a great place to be,” says its Executive Vice President for Energy Delivery and Solutions, Al Lujan.

And Lujan, a native of New Mexico, has more than 35 years of professional utility experience to draw on in making this assessment. As the keynote speaker/ representative of CPS Energy as the host energy utility at the forthcoming 8th Metering, Billing/CIS America conference, Lujan spoke to Smart Energy International about the utility and its metering activities.

Would you please begin by telling us something about yourself?

“I started my utility career in 1972 with the Public Service Company of New Mexico, where, in the years I was there, I did a lot of things and learned all the facets of the energy business. After rotating through the different parts of the organisation, I ended up with responsibility for statewide electric utility operations.

“After I retired in 2000 I moved to Austin as Senior Vice President and Chief Operating Officer of Austin Energy. Then when I left there in 2003, I was called to my current position at CPS Energy, in which I am responsible for the retail side of the business, including the wires and transmission and distribution functions. About half of CPS Energy’s employees – 2,220 employees – report to me."

What is CPS Energy’s history and current status?

“CPS Energy is the largest municipally owned combined electric and gas utility in the US, with approximately 662,000 electric and more than 314,000 gas customers. It was acquired by the City of San Antonio in 1942, and it plays a huge role in the community, not the least of which is accounting for approximately one-fifth of the city’s annual operating budget – money that is then available for other municipal services.

“As a municipal utility, CPS Energy is able to focus on service to its customers, rather than on generating dividends for shareholders, and it has brought huge improvements in quality of life. San Antonio is now the seventh largest city in the US, and CPS Energy has played a huge role in this. Just recently Toyota has moved to the city, and other businesses are also moving in. Our electric rates are the lowest in Texas, we maintain a good financial rating and we continue to do things such as strengthening our transmission and distribution systems and building new power plants.”

What strategies has CPS Energy implemented to achieve this profile?

“We are blessed with a low cost of money. But apart from that we are always looking to keep costs down by being effective and innovative. We keep energy prices down by having a diversified generation base, including coal, nuclear, gas, fuel oil and wind, and we are always on the lookout for new options. As an example, we run a gas hedging programme to limit the price volatility of gas, and we are also looking at other renewable options.”

What metering systems does CPS Energy have?

“We have a number of traditional electromechanical meters with about a third of our residential customers on Automatic Meter Reading (AMR). We use meters equipped with radiobased modules that communicate with Itron’s drive-by and walk-by meter reading system. “For our top industrial customers, we have just implemented the Schneider Electric ION Enterprise Energy Management (EEM) System. The system will run on a wireless-based network that will enable us to monitor things like harmonics and voltage dips.

Our customer is now very sophisticated and is looking not only for reliability, but also quality in power delivery. “We are also looking at a major Advanced Metering Infrastructure (AMI) and Meter Data Management (MDM) programme into which we are planning to invest an initial amount of around $30 million over the next three years. Our goal is to have AMI in every home and business in San Antonio, and it’s going to take some time, but we will continue until we have achieved this.

Our first focus is the commercial and industrial customers, and we are in the planning stages of spending the first $6 million to get the programme started. The whole programme will involve replacing almost every existing meter, but the aim is to meet the requirements of the Federal Energy Policy Act and any requirements that the Public Utility Commission may introduce.”

What energy efficiency activities does CPS Energy undertake?

“We assist customers in their understanding of what they can do to improve their efficient use of electricity and gas. We provide information, education and energy audit tools and services to assist them in their analysis. We also have rebate and incentive programmes in place to encourage the use of energy efficiency equipment.

“We recently launched a smart home project in which we are looking at developing a zero-energyconsumption dwelling. We are currently in discussions with home builders and are looking at the technologies needed to incorporate into these homes, such as fuel cells and renewable energy generation options. Our AMI project also will integrate into this by allowing the ability to control appliances and facilities such as water heating and HVAC.”

What strategies has CPS Energy implemented to enhance customer service?

“We try to maximise our interaction with customers and conduct regular satisfaction surveys to understand their expectations of the local electric and gas utility. “In order to understand the best way to interact with our customers, our call centre has a quality-assurance process that includes call monitoring and an intense employee training programme.

In the commercial and industrial area, we also have industry-specific-trained customer service representatives to better assist these customers in satisfying their needs and wants. “Customers are very savvy these days, and they expect a lot more than they did a few years ago!”

CPS Energy is a host utility for the Metering, Billing/CIS America Conference and Exhibition taking place in San Antonio, Texas from May 7-11, 2007, and Al Lujan will present the opening keynote address (www.meteringamerica.com).