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San Antonio

CPS Energy probe in cost flap delayed

  • 11-Nov-09 08:58
    Message # 243327
    Contact Us (administrator)

    By Anton Caputo - Express-News Sep 10, 2009

    It will be at least two weeks until CPS Energy releases any details from its investigation into why a $4 billion increase in the cost estimate for nuclear expansion was withheld from its upper management and board.

    Preliminary results from the investigation were expected at Monday's board meeting, but internal auditor Helen Madison said her team needs more time to get to the bottom of how the information from contractor Toshiba Inc. was handled.

    "Obviously I would prefer sooner than that, but I'm going to respect the process," said Mayor Julián Castro, who called for the investigation.

    At issue is how and why an e-mailed price estimate from Toshiba was kept from interim General Manager Steve Bartley for more than a week and then withheld from the board until a mayoral aide directly questioned Bartley late last month.

    The incident, which came days before the City Council was set to approve a $400 million bond for nuclear development, has shaken many council members' faith in the utility and prompted outrage from the community.

    Bartley, who is leading a team to Japan today to negotiate with Toshiba, said he would report the results at a board meeting Nov. 16. CPS Energy, which is partnering with New Jersey-based NRG Energy to build two more nuclear reactors outside of Bay City, has estimated the project should cost about $13 billion.

    At Monday's meeting, the utility's embattled leader once again pledged that CPS would work to be more open with the public and City Council.

    He announced an "action plan to optimize transparency and optimize stakeholder communications."

    "I am not in denial," Bartley said. "Senior staff in this organization is not in denial in recognizing that we have a problem that needs to be addressed."

    Castro said distrust in CPS has hit such a level that "the utility will be crippled in the next couple years if you cannot get over that issue."

    He's asked CPS to begin monthly reports to the City Council and said he will create a citizen task force to help make the utility more transparent and accountable to the public. Castro hopes the task force can begin work by Thanksgiving.

    Two CPS Energy executives and members of the utility's nuclear development team — Mike Kotara and Jim Nesrsta — have been suspended pending the results of the investigation. Madison, the internal auditor, said CEO Milton Lee will ultimately make the decision about their future.

    Madison has hired Robert Bettac, a labor and employment attorney with the San Antonio firm Ogletree Deakins, to help in the investigation.

    She said one of the reasons the team needs a minimum of two more weeks is that some of the people she needs to interview were already on their way to Japan.

    She wouldn't be specific. But Bartley said Bob Temple, the utility's vice president of nuclear development, and David Jungman, the utility's vice president of financial services, had left for Tokyo.

 
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