Podcasts

Texas would be ‘crazy to penalize renewables,’ CPS Energy CEO Rudy Garza says

Texas would be ‘crazy to penalize renewables,’ CPS Energy CEO Rudy Garza says

CPS Energy CEO Rudy Garza joined Episode 8 of the Texas Power Podcast with host Doug Lewin to discuss the impact of Winter Storm Uri, Texas’ controversial energy market reform effort, and the “crazy” attempt to punish renewables. Subscribe wherever you get your podcasts.

For the latest episode of the Texas Power Podcast, I had the pleasure of talking with Rudy Garza, CEO of CPS Energy, the nation’s largest integrated municipal power and gas utility. Rudy became CEO a little over a year ago but has deep experience in Texas energy. 

As one of the largest generators and customers in ERCOT, CPS has a unique position in the market. We covered a lot of ground, including the impact of Winter Storm Uri on CPS’s services and energy-sourcing decisions. We also explored ongoing gas supply challenges and the need for accountability and improvement from the Railroad Commission and legislature: “We are still having gas supply issues every time it gets cold. The state of Texas has done nothing to ensure that gas supply chain is firmed up. The Railroad Commission has work to do on how they’re going to choose to hold gas suppliers accountable. And I think the legislature has been a little slow to address this.”

Garza, while recognizing the need for more dispatchable resources in the ERCOT market, opposes efforts to penalize renewables, a current legislative focus, particularly in the Senate: “[It] would be really nice for the legislature to coalesce around two or three ideas that don’t over-penalize renewables. I think it’s crazy to penalize renewables. We need every MW on the system that we can get our hands on.”

We talked a lot about demand-side solutions, including CPS’s highly successful energy efficiency programs, and the Texas legislature’s role in addressing grid reliability through the demand side: “One of our key points at the legislature this session has been that demand response, energy efficiency, has to be part of the solution.”

We also examined the Inflation Reduction Act (IRA) and its effects on the energy market and CPS. Rudy outlined CPS’s efforts to access federal funding created by the IRA and the benefits of direct pay provisions for owning energy assets and transitioning employees to managing renewables instead of fossil fuel plants. Additionally, we discussed CPS’s energy portfolio, plant closures, storage projects, a pumped hydro energy storage pilot, virtual power plants, and distributed storage.

I learned a lot from this discussion and I’m sure you will, too. Don’t forget to leave a 5-star rating and positive review on your favorite podcast platform. If you have ideas for future episodes, please find me on Twitter @douglewinenergy. 

TIMESTAMPS

2:16 – About Rudy Garza

4:29 – About CPS

8:03 – Winter Storm Uri 

11:12 – Rotating outages

15:56 – Market redesign proposals in the legislature

18:23 – Attempts to penalize renewables 

20:35 – Closing coal units and diversification of energy sources at CPS

23:56 – Battery storage

25:23 – Deliverability issues with natural gas

28:46 – Energy efficiency, virtual power plants, demand response

35:20 – Impact of the Inflation Reduction Act, including direct pay for municipal utilities like CPS

42:18 – Large scale storage, including CPS’ pumped hydro storage pilot

44:58 – Distributed storage

47:20 – How CPS empowers customer to reduce costs and increase efficiency

51:45 – CPS’s future

52:44 – EVs