Guest Article: The Dark Side of CPS’s Smart Grid Project

Concluding observation: “CPS Energy is Out of Control”...

Guest Article: The Dark Side of CPS’s Smart Grid Project

Ed. Note: We applaud Mr. Mitchell for his thorough and meticulous research and analysis of CPS Smart Grid financials based on “heavy inputs” of data he obtained directly from the nation’s largest municipally owned energy utility. We owe him a debt of gratitude for his tireless pro bono work to hold our elected officials accountable to the taxpayers. He is an inspiration to all of us who expect and demand fiscal responsibility as well as keen oversight of spending at all levels of government.
Image credit: CPS Energy


Stanley J. Mitchell

Stanley J. Mitchell

By Stanley J. Mitchell

To keep you advised and up to speed on my independent review of this project, here is a chronology of 2016 events to date:

January 7 — The San Antonio Tea Party, led by President Allen Tharp, scheduled a meeting with Mayor Taylor and her Chief of Staff, Jill DeYoung, and invited me to attend to review the financial aspects of CPS’s Smart Grid project with the Mayor.

Sitting at the Mayor’s left, I made three main points:

  1. CPS’s Chris Eugster misled the City Council on June 11, 2014 when he advised that the Smart Grid project involved “…$290 in upfront costs and would take 12 years to be paid back.” The truth, developed with heavy inputs from CPS staff, is that the project will generate a negative $285 million cash flow over CPS’s 20-year forecast period. And that excludes several cost-impacting issues CPS declined to explore. CPS does not know how much the Smart Grid project will cost!
  1. Sheryl Sculley and her financial aides attended the June 11 Council meeting and, by their silence, endorsed CPS’s fraud.
  1. Mayor Taylor is vulnerable to financial misrepresentations because there are no financial experts in elected City Government. She needs a financial expert reporting directly to her because the principal task of our Council is financial — wisely spending our tax dollars. And Ms. Sculley’s advice has proved to be unreliable.

Mayor Taylor agreed to a meeting with CPS management, following verification of Mitchell inputs by the Mayor’s expert financial advisor. 

January 15 — Delivered to Jill DeYoung two 3-ring notebooks (one for the Mayor and a second for her financial advisor) containing “Making Bureaucracies Accountable, the Anatomy of Financial Decision-Making in San Antonio, an unsolicited, zero-cost Consultant Report for Mayor Ivy R. Taylor by Stanley J. Mitchell.” This 12-page, 20-exhibit report thoroughly documents the development of the Smart Grid’s negative $285 million cash flow over CPS’s 20-year forecast period.

February 8 — Delivered to Jill DeYoung a 5-page, 2-exhibit letter to Mayor Taylor documenting a $660 million additional burden on CPS ratepayers resulting from the switch from analog to digitial Smart Meters. Texas Public Utility Commission engaged a 2010 study by Navigant Consulting which determined that the more accurate Smart Meters capture 2% more usage than the analog meters they replace. CPS, aware of this characteristic, committed a second fraud by failing to reveal this fact to ratepayers and elected City Government.

March 23 — Delivered to Jill DeYoung a 4-page letter to Mayor Taylor, with a 14-page “Smart Grid Informational Paper” exhibit, contrasting the analog meter’s measurement of only power usage over time with Smart Meters that provide that measure, plus 12 additional functions which are measured and communicated to CPS central control for processing — and each of these functions has an identified “potential for abuse” that can be implemented at CPS’s sole discretion. Concluding observation:  “CPS Energy is Out of Control” (free from the Council oversight that was possible before sophisticated, programmable Smart Meters were introduced, making revenue-generation the sole province of Smart Grid programmers). 

April 1 — Delivered to Jill DeYoung a 3-page letter to Mayor Taylor summarizing the findings of an accompanying March 23, 2016 Manhattan Institute study, “Energy Policies and Electricity Prices, Cautionary Tales from the E.U.,” prepared by Senior Fellow Robert Bryce. The study quantifies the effects of the E.U.’s “renewables-at-any-cost” policy over the 2005-2014 period finding, briefly, that E.U. Residential Electricity Prices increased by 63%, while equivalent U.S. prices increased 32%. (Germany, the leader in energy subsidy spending, suffered a 76% increase in this period.) In return, the E.U. reduced its carbon-dioxide emissions by an annual rate of 600 million tons, while developing countries (Indonesia, Brazil, India and China) increased their annual rate to 4,731 million tons, nearly 8 times the E.U’s reduction. This dismal cost/benefit result will be ours to share as CPS continues to pursue the E.U. model. 

April 5 — Mailed to Attorney General Paxton a letter complaining of CPS’s inadequate response to my Open Records Request for the CPS plan to deal with the probable bankruptcy of SunEdison, once a key vendor operating solar farms and selling the output to CPS under contract. My letter, copying Mayor Taylor and Senator Donna Campbell, addressed 8 elements of the legal environment in which CPS Energy remains, literally, out of control.

Our case against CPS’s Smart Grid project strengthens continually.

Stanley J. Mitchell is a local citizen activist specializing in financial analysis. Education/experience: BS, Political Science and Economics, Lewis and Clark College; MBA, Harvard Business School; 2nd Lieutenant, U. S. Army Finance Corps; Senior VP and General Manager of American Bank Stationery (ABS) Northern Area; Senior VP of Clarke American in San Antonio (facilitated transition of ABS to Clarke American); “Numbers guy” for San Antonio grassroots coalition’s successful campaign against VIA Modern Streetcar project. Contact Mr. Mitchell at sjpamitchell@sbcglobal.net.

 

 

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One Response to "Guest Article: The Dark Side of CPS’s Smart Grid Project"

  1. Stan Mitchell  April 5, 2016 at 11:08 pm

    Space restrictions did not allow listing the scores of coalition members who have worked hard and long to expose CPS Energy’s “renewables-at-ay-cost” policy. Our thanks to them and to Mr. Tharp and his Tea Partiers for providing the forum for this revelation. Blessings, Stan Mitchell

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