In a recent interview with the American Public Power Association, Paula Gold-Williams, President and CEO of San Antonio-based public power utility CPS Energy, provided details on the utility’s Flexible Path under which the utility will consider, among other things, a significant addition of renewable energy to CPS Energy’s generation portfolio and more than 500 megawatts of battery storage.
As CPS Energy studies its options as part of the Flexible Path strategy, it is not oversold on any one technology, and instead believes in diversification, Gold-Williams noted in the interview. The utility is not basing its pursuit of the Flexible Path on ideology, but rather is “really trying to figure it out logically,” she said.
(This story is the first of a two-part article based on an interview with Gold-Williams that took place in late September. The second article will focus on CPS Energy’s activities in the areas of economic development and customer service, as well as the views of Gold-Williams on smart cities).
Gold-Williams was named President and CEO of CPS Energy in July 2016 after serving nine months in an interim role. Previously, beginning in 2008, she served as CPS Energy’s Group Executive Vice President – Financial & Administrative Services, Chief Financial Officer and Treasurer. She also served in other capacities such as Chief Administrative Officer and Controller.
The utility’s Flexible Path was rolled out to the public earlier this year.
In a strategic update presented to CPS Energy’s Board in March of this year, Gold-Williams provided details on the Flexible Path initiative.
The presentation noted that the Flexible Path allows for updates in strategic direction as technologies and customer needs change.
Under this strategy, CPS Energy will consider and assess, among other things:
- Repowering two older coal units to another generating technology
- Accelerating the shutdown of JK Spruce 1 (a coal-fired unit) to 2030 from 2047;
- Extending the life of combined-cycle plants (AVR & Rio Nogales) an additional 8 years;
- Adding 4,100 MW of renewables by 2040 (in addition to current 1,600 = 5,700 MW);
- Adding 550 MW of battery storage (duration increased from 1 to 4 hours discharge); and
- Including flexible generation build in smaller increments to fill any remaining load forecast gaps
Natural gas combined-cycle offers the baseline pivot within the Flexible Path strategy and the utility will adjust the plan when competing technologies provide more benefit. “While we’re not projecting to be long in generation in the outer years of 2040, especially if distributed generation materializes, we will ensure that a balanced portfolio approach is maintained,” the presentation noted.
When asked in the interview to discuss the Flexible Path, Gold-Williams noted that “what we try to do is think about all the actions that we do through a People First filter and we really try to think of our customers and our stakeholders first.” She said that “you can’t be complacent in this industry, particularly now more than ever.”
Gold-Williams said that the power industry is fortunate because when the sector makes an investment in a plant, “we are so good at it as an industry that we can optimize the value of that investment for decades – thirty-year assets, fifty-year assets, eighty-year assets – if anyone’s ever going to optimize an investment in generation or transmission, and to a great degree distribution, the utility energy industry can do it.”
But, at the same time, distributed generation “is really emerging as a broad new solution set and we have been embracing that,” Gold-Williams noted.
CPS Energy also recognizes that the technologies “that we’ve seen in our hands in terms of phones and iPads and Androids and all of those things really changed the dynamic that customers expect.” She said that it is this convergence where the utility is seeing a lot more interest in new energy solutions.
From the perspective of Gold-Williams, it doesn’t make sense anymore to assume “that you could build a plant and you don’t have to think about the asset life. You’re not going to necessarily hold on to it for eighty years. How long will you hold on to it? Unknown. So instead of walking in and doing it the same way, we decided that we needed to change our perspective and say, ‘what if technology on the generation side of the house changes tremendously?’”
Gold-Williams noted that there is a lot of investment going into energy storage. “But there are multiple things that could happen. Energy storage could have a very slow, progressive development. It could have a moderately strong and sensible” impact that would be manageable “or it could have an accelerated, overnight impact” on the power sector, she said.
In October, as part of the Flexible Path, CPS Energy and community leaders broke ground on a $16.3 million solar and battery storage project.
The venture, which was subsidized by a $3 million grant from the Texas Commission on Environmental Quality, is a partnership with Southwest Research Institute to install a 5-megawatt solar farm with racks filled with 10 megawatts of batteries on Southwest Research Institute property. Crews from Renewable Energy Systems Americas Inc. will build the farm and construction is slated to be completed in April 2019.
Most of the 48-acre property will be taken up by solar panels, but a 9,000-square-foot fenced-in area will hold four battery units, each of which will hold enough batteries to power about 410 homes. There will also be an educational facility, open to the public, on the property in the future.
CPS Energy is “not oversold on any one technology”
Gold-Williams noted that CPS Energy is “not oversold on any one technology. We believe in diversification. What if you can still blend in something new, optimize what you have and then keep putting yourself in an evolving state?”
The Flexible Path “requires us to be diligent in our evaluation process. It requires us to scan the nation and the globe for new solutions. It encourages us to partner like we’ve never partnered before, to hear things that we might not have listened to in the past.”
She said that “we are running this thing as a business. We’re thinking about the things we do well and we’re thinking about partnering with people who do other things well.” She added that “who they are and how they operate matters. Their principles matter. Their perspectives matter. But they can help us bridge new solutions in a way that we’ve never done before and that’s the basis of the Flexible Path.”
Gold-Williams said, “Maybe you get to a more economical level of energy storage. This would help us truly optimize renewables, and introduce other new technologies as they come through.”
She noted that CPS Energy is not basing its pursuit of the Flexible Path based on ideology. “We’re really trying to figure it out logically.”
Gold-Williams went on to say that more people are expressing an interest in energy matters these days and want to make sure that their interests are being listened to “and so we can get a whole lot more conversation going. We think that’s great. We think being flexible and taking in more input,” sharing more and “trying to make our super analytical charts actually make sense to the average good citizen is a great place to start.”
CPS Energy thinks that is what it means to be community-based. “We think that’s what it means to be really good business people where the difference in municipal power is that the people that you serve are your neighbors,” she said. “They hold you to a high level of execution and standards, but that’s OK. That’s the kind of community people thrive in.”
The utility has proactively engaged with customers and the community in order to gather input on the Flexible Path. In June, Gold-Williams was one of several CPS Energy officials who attended a public input session related to the new path forward.
Additional details about the Flexible Path are available on CPS Energy’s website.