Mayor Julián Castro joined the CPS Energy Board of Trustees and the University of Texas at San Antonio on Tuesday to announce a 10-year, $50 million agreement to position San Antonio as a national leader in green technology research.

Castro called the creation of the Texas Sustainable Energy Research Institute at UTSA a "game-changing partnership" between a university and a city-owned utility that is unlike any other in the country.

"This is a bold step," Mayor Julián Castro said. "Ratepayers will get a more efficient utility, the city will get the economic development value of robust research and development in San Antonio, and the university will spiral ever more quickly to Tier One status."

CPS Energy officials hailed the agreement as a strategic move that will help the utility invest ratepayer money wisely at a time when utilities across the country are working to implement sustainable technologies.

Last year, with approval from the San Antonio City Council to change fuel adjustment charges, the utility allocated $859 million through 2020 to the Save for Tomorrow Energy Plan (STEP). STEP aims to reduce energy use by 771 megawatts by 2020 through customer rebates and incentives, including $156 million to weatherize up to 45,000 homes in Greater San Antonio.

"The strength of the agreement with UTSA comes from the partners working together to set the agenda," noted CPS Energy Board Chairman Charles Foster. "CPS Energy gets localized research, and UTSA gets a real-world laboratory by partnering with the community-owned utility. We will need this kind of information as we change with the energy industry. If we can help to develop it in our own community, based on our customers and our weather, then the information better serves our customers."

"This is a great opportunity for UTSA to do work on a global scale that benefits our local community," added CPS Energy Acting General Manager Jelynne LeBlanc Burley. "As we make the transformation from a traditional utility to one that is focused on providing competitively priced power in a sustainable way, we will look to the institute to help us develop a secure smart grid and to understand how our customers will interact with that new technology."

Les Shephard, an internationally renowned expert on energy policy who joined UTSA earlier this year after a long career at Sandia National Laboratories, will head the institute, formerly known as the Institute for Conventional, Alternative and Renewable Energy.

"We welcome this partnership with CPS Energy as it will not only make San Antonio one of the nation's leaders in sustainable energy innovation, but also provide a significant boost to UTSA in its steady growth toward a research intensive university of Tier One status," said UTSA President Ricardo Romo.

Shephard said all the pieces are in place for a nationally recognized institute in San Antonio. The city has two outstanding utilities - the San Antonio Water System, which has a long track record in the area of conservation, and CPS Energy whose energy-efficiency efforts are newer, but just as exciting.

Also, the area has a strong foundation of academic and research entities with robust green programs, including the Southwest Research Institute, as well as the Mission Verde Center, a city partnership that includes the Alamo Colleges and Texas A&M University's Texas Engineering Experiment Station.

"In the last two years UTSA has been aggressively hiring experts in the area of green energy research and this new agreement will accelerate the acquisition of top quality talent to San Antonio," said Mauli Agrawal, Dean of the College of Engineering at UTSA, who was instrumental in persuading Shephard to join UTSA. Les Shephard added that the wealth of energy resources present in Texas makes San Antonio an ideal place for energy-related research and development, and attractive to experts from around the nation.

The agreement calls for CPS Energy to invest up to $50 million over 10 years in the institute. The first two years' investment will be $3.5 million, from funds currently allocated to research and development. Future funding will be developed by the scope of the projects defined by the partnership and subject to annual approval by the CPS Energy Board of Trustees.

About CPS Energy
CPS Energy is the nation's largest municipally owned natural gas and electric utility providing service to approximately 707,000 electric customers and 322,000 natural gas customers in and around the City of San Antonio. The utility ranks among the nation's lowest-cost energy providers while ranking number 1 in wind-energy capacity among municipally owned utilities, and number 1 in Texas in the amount of solar-generated electricity under contract. For more information, visit www.cpsenergy.com.

About UTSA
The University of Texas at San Antonio is one of the fastest growing higher education institutions in Texas and the second largest of nine academic universities and six health institutions in the UT System. As a multicultural institution of access and excellence, UTSA aims to be a national research university providing access to educational excellence and preparing citizen leaders for the global environment. UTSA serves nearly 29,000 students in 64 bachelor's, 49 master's and 21 doctoral degree programs in the colleges of Architecture, Business, Education and Human Development, Engineering, Honors, Liberal and Fine Arts, Public Policy, Sciences and Graduate School. Founded in 1969, UTSA is an intellectual and creative resource center and a socioeconomic development catalyst for Texas and beyond. More information online at www.utsa.edu.

CPS Energy - Research & Development Fact Sheet

R&D Objectives:

CPS Energy requires data and support services in the development of sustainable energy technology, smart grid applications and environmental controls, as a result of the transformations taking place in the utility industry in the coming years. By supporting the research of various organizations, CPS Energy will derive innovative solutions to these challenges. Through the Texas Sustainable Energy Research Institute (SERI), CPS Energy will help position San Antonio as a leader in sustainable initiatives.

Funding:

• The 10-year partnership with the Texas SERI at the University of Texas at San Antonio (UTSA) begins September 2010 and ends September 2020.
• CPS Energy will invest up to $50 million locally in research over the 10-year relationship with SERI.
• Funding for Texas SERI will be reviewed and approved annually by the CPS Energy Board of Trustees as goals are established and deliverables are met.
• Year 1 funding for Texas SERI is set at $1 million; this involves redirecting a portion of the current 2010-2011 R&D budget of approximately $5 million.
• Year 2 funding for Texas SERI will require re-prioritizing/re-directing approximately $2.5 million of the planned 2011-12 R&D budget
• Subsequent funding will be contingent upon San Antonio City Council rate approvals.

Benefits from an alliance with Texas SERI:

• Texas SERI investments remain within our community, allowing for close working relationships among participants.
• Work will be tailored to the San Antonio market and its climate, energy needs and energy use, but may have implications for a national audience.
• UTSA will attract academic expertise in engineering, carbon capture and smart grid technology.
• Texas SERI will be able to leverage CPS Energy research dollars for additional funding.

Research and Development:

• R&D is integral to meeting CPS Energy's ambitious goals for 2020.
• Maximizes the best use of dollars for future projects.
• CPS Energy research and development (R&D) budgets have averaged $3 to $5 million annually.
• Current R&D budget allocations (for Fiscal Years 2010-11 and 2011-12) include:
  • Electric Power Research Institute (EPRI), Palo Alto, CA
  • Other project studies for:
    • Energy Efficiency
    • Transportation
    • Smart Grid
    • Energy Storage/Distributed Energy
    • Carbon Sequestration
• CPS Energy's past R&D partners have included:
  • Gas Technology Institute
  • American Public Gas Association Research Foundation
  • Florida Solar Energy Center
  • Local and Regional Collaborative efforts lead by CPS Energy personnel.