Rudy Garza: Leading CPS Energy Through Transformation and Tradition

In the vibrant and historic city of San Antonio, one man’s journey from humble beginnings
to a position of profound influence serves as a beacon of inspiration and dedication. Rudy
D. Garza, president and CEO at CPS Energy, stands at the intersection of tradition and
transformation in the energy sector. Raised in the industrial heart of Corpus Christi, Texas,
Rudy’s story is deeply interwoven with the values of hard work, community commitment,
and an unwavering pursuit of innovation.

Rudy’s ascent to the leadership of the largest municipally owned electric and natural gas
utility in the United States is more than a tale of professional achievement; it is a narrative
rooted in personal growth, community impact, and a vision for the future that balances
economic viability with environmental stewardship. As CPS Energy faces the challenges
and opportunities of a rapidly evolving energy landscape, Rudy’s leadership is
characterized by a forward-thinking approach that honors the past while boldly stepping
into the future.

His commitment to his community and heritage is palpable, drawing on the lessons
learned from his family’s legacy in the bustling refinery towns of South Texas. The values
instilled by his close-knit family have shaped Rudy’s approach to both life and leadership.
These early experiences cultivated a sense of responsibility and a desire to contribute to
the greater good, driving Rudy to pursue a career that aligns personal values with
professional objectives.

In this candid conversation with Robert Rapier and Kym Bolado, Rudy opens up about his
journey, sharing insights into his personal and professional milestones, his vision for CPS
Energy, and his deep-rooted connection to the communities he serves. Through his story,
we explore the complexities of leading a major utility company in today’s dynamic energy
environment and the personal philosophies that guide him in navigating these challenges.

Robert Rapier: Rudy, you grew up in Corpus Christi, and your grandfather worked in the
refineries. Did that influence your interest in the energy sector?

Rudy Garza: Absolutely. Growing up within about two miles of refinery row in Corpus
Christi, that’s all I knew. My grandfather worked for American Smelting (ASARCO), which is
a zinc smelter in Corpus Christi, about a block away from my elementary school, St.
Theresa. My grandfather was a laborer and eventually became a foreman at ASARCO. He
would always say I needed to go into engineering because all the bosses at the plant were
engineers. When I started to think about what I wanted to do education-wise, engineering
stuck in my head. I was good in math and science, and it made sense. But absolutely, the
refinery business and my exposure to it because of my granddad had a lot to do with my
career trajectory.

Robert Rapier: What are some of your memories from living near the ship channel, and
how did that environment shape your perspective on energy and the industry?

Rudy Garza: The Corpus Christi economy is driven by the jobs along the ship channel
corridor. I rode bikes up and down River Road, where all those refineries are, and I
practiced baseball at some of the parks in and around that area. For me, that’s how my
grandfather put food on our table. I always appreciated the jobs and the economic activity
that it created. We had a lot of friends whose parents worked at the refineries, and I have
friends and family to this day that work there. It was very much a part of who I was, and
we’ve recently purchased two plant sites down in Corpus Christi. So, the fact that we own
a power plant within line of sight of the neighborhood I grew up in is cool.

Robert Rapier: I know with me, nobody in my family ever expected me to go to college.
Nobody in my family had ever been to college. What was it like for you growing up, or was
that something that was expected?

Rudy Garza: My grandparents raised me. I grew up like a lot of Hispanic kids in a multi-
generational household. My grandmother finished at the top of her class at La Jolla HighSchool, and she expected every one of her grandchildren to graduate from college. All
eleven of my grandparents’ grandchildren got degrees, including me. So, while I didn’t grow up with a ton of college-educated people around me, it was an expectation that everybody would earn a degree, and I’m proud of that. My grandmother was an amazing lady.

Robert Rapier: That’s incredible. Can you tell me about that? Tell me about your journey
through the University of Texas and the University of North Texas and what motivated you
to pursue the degrees that you pursued.

Rudy Garza: I’ve always been drawn to the University of Texas (UT). That’s the college I
grew up loving. I had no connection to UT necessarily, but, like most Texas kids, you
usually align around Texas or Texas A&M. I had an aunt who was pushing me hard to
consider A&M and I had an uncle in California who took me on tours of all the California
schools. I applied and ended up getting into Stanford. But I ultimately chose Texas
because they gave me a scholarship that covered my schooling. I was always a UT guy. It’s a huge part of who I am. I met with an academic advisor when I got to UT and asked what the most difficult engineering program you could get into was, and it was Electrical Engineering. So, I started there and figured I might have to transfer to a different engineering program if it was too hard. But I was able to make it. I’m an active
Longhorn alumnus and I’ve served on their advisory board for the College of Engineering.

Robert Rapier: How did your educational background prepare you for the challenges you
face today?

Rudy Garza: You learn how electricity works. You don’t learn what you need to know about
the job that you’re doing until you get into it and the company you work for teaches you that. That’s universal in the energy industry. After my freshman year in college, I joined the Intern Inroads Internship Program for minority students and started working for TXU in the Dallas-Fort Worth area.

So that’s how I got into the business. It was through an internship. However, college
teaches you the discipline you need to be a lifetime learner. To this day, I’m still learning
things to be the best CEO I can be. There’s no rule book or training program for being a
CEO. You have to know the business and you need to figure out what you don’t know and
hire people better and smarter than you to cover the areas that you’re not as strong in, and you put it all together.

I received a great foundation at UT for a broad engineering mindset, and then TXU taught
me what I needed to know about the utility business. That foundation is what got me to
where I am today.

Robert Rapier: Did you start as an engineer or did you go straight into the business side?

Rudy Garza: The way TXU set up their internship program is they moved me around the
business. I interned in a customer service role for one summer, had an engineering role for
a couple of summers, and they moved me back to a customer service role my last
summer. I started my career off in a customer service environment and then transitioned
to an engineering role for two or three years. I didn’t spend a lot of time in the engineering
discipline once I got out of school.

My mentors figured out early that I was good with people, and they started putting me in
roles where I could take advantage of that skill set. But the time I did spend in engineering
gave me the fundamentals I needed to understand the business. And again, there are a few things you need to have to be capable of being a CEO. You have to be technically sound. You do not have to be an expert, but you have to understand the basics of the business. You have to understand how the business makes money and you have to understand the policy side of the business.

I finished at the top of my MBA class at the University of North Texas (UNT). The business
foundation of leadership and management are also important because you have to have a
good management structure in place to be a good leader. When you consider it all, I think I
have a lot of well-rounded experience and educational background that made this
opportunity possible for me.

Robert Rapier: You are the first Hispanic leader of CPS Energy. What does that mean to
you personally and professionally?

Rudy Garza: I’m proud to be the first to do anything, not a lot of people get that
opportunity. And certainly, being the first Hispanic leader at CPS Energy is an honor that’s
so humbling. It also means that I need to do a good job.

In an environment where somebody like me has never been given this opportunity, it takes
Board Members who care about diversity and are willing to give somebody a shot. Our
Board of Trustee members, Dr. Willis Mackey, Janie Martinez Gonzalez, and San Antonio
Mayor Nirenberg, took a chance on me. I’ve done everything I can to make the most of this
opportunity and to make the community proud. That’s what drives me.

When I go out to schools or to visit elderly folks in the community, they react to me in a way that makes me feel proud. I didn’t think it was possible for me to be a CEO growing up
because I never saw a CEO who looked like me. That’s why it’s important. At the end of the
day, it’s not about me. It’s about what my opportunity means for people of color and kids
who are trying to aspire to do great things. Now, at least, they have a role model to say,
“Hey, somebody’s gotten there.”

Robert Rapier: In my experience, every CEO who comes in wants to put their stamp on the job. What are some of the initiatives you implemented at CPS Energy? How did you make that job yours?

Rudy Garza: The first initiative was stabilizing ourselves financially. We were in a tough
spot after Winter Storm Uri, and that’s how this opportunity came about for me. We had
trust issues with the community, and I immediately got to work stabilizing the organization
by getting a rate increase passed through our Board and City Council. Once we got
stabilized in that regard, we put a strategy together.

Vision 2027, our strategic plan, is a means for us to prioritize billions of dollars’ worth of
needed investments to get us from where we have been to where we need to be. That
means additional gas supply infrastructure, over a billion dollars of transmission work, the
retirement of old gas power plants and building new power plants to replace them. And I
need to manage an energy transition that gets us from a traditional-style utility into the
future.

Once you have a good strategy, then it’s up to you to execute, and that’s where we are right now. We’re executing our Vision 2027 strategy ahead of schedule, and I’m proud of my team and the community for getting behind us.

Robert Rapier: One of the things I do is write Utility Forecaster for Investing Daily. A
dominant theme recently is the growth of AI data centers and how that’s going to affect
power demand. Is that something you see in your area and is that something you’re
planning for?

Rudy Garza: Absolutely. We have roughly ten data centers in San Antonio right now and
another ten or twelve waiting in the wings. My job is to provide them service, but these
larger loads are more complex. We’re going to have to build transmission in a lot of
instances to be able to serve these customers which will include the Public Utility
Commission of Texas (PUC) and a state regulatory process that takes three to five years.

There are probably some customers that are frustrated because of the time horizon that it
will take to get them the service they’re looking for.
We can’t build transmission fast enough to get them serviced immediately. But I feel good
that we will figure it out.

Robert Rapier: You talked a lot about the challenges going ahead here. How will the
adoption of renewables and increasing sustainability play into all that? It seems like that’s
yet another complication in your job with trying to integrate all that into the grid.

Rudy Garza: I don’t subscribe to the notion that renewables are bad and gas is good. The
only way you’re going to serve load growth right now is with renewables. San Antonio is
number one in solar, we’re number two in wind in the state of Texas, and we’re the fourth
largest generator in ERCOT. We have nuclear and coal power as well. So, we’ve figured out
a way to balance it all successfully, as has the state.

We’re getting solar built and it’s getting built quickly and we’ll be building a gigawatt worth
of battery storage over the next four or five years. You have to have all available resources
when you’re in a constrained environment. Do we need natural gas generators? Absolutely.
We have to build more of that, too. When you’re in a growing state, you need to have it all. You don’t have the luxury of picking and choosing what type of resource you can get. You need to have as many resources as you can get on the system.

Robert Rapier: Shifting gears a little bit, what advice would you give to young
professionals, especially those from underrepresented communities looking to enter the
energy industry?

Rudy Garza: I don’t think there’s a better time to be in the energy industry. I’ve hired 1,200 new employees over the last three years, which is a third of my employee base. I have 40% of my employees who are eligible to retire over the next five years. That’s 70% to 75% of my employee base that will turn over in an eight to ten-year period. That means there’s going to be a ton of opportunity for people coming out of school who are looking for a career.

I think that the utility sector is a great place for young folks or for those seeking a change in industry. I always tell my new employees, it’s not rocket science. You have to show up to
work every day with a good attitude and treat people right. You have to be inquisitive and
figure out what kind of leader you’re going to be — whether you’re an individual contributor
or you’re a leader of people, either way, it takes leadership. There are some fundamentals
that you need to get right, and we’ll do the rest.

It all leads to the possibility that somebody could end up in my seat someday who’s not
even thinking they could be a CEO. I really didn’t even think about the possibility that I could be a CEO until about eight years ago, when Doyle Beneby, one of my former CEOs,
put the idea in my head that I was capable.

Robert Rapier: Where were you at that point in your career?

Rudy Garza: At that point in my career, I was vice president of external relations at CPS
Energy.

Robert Rapier: Okay, so you were getting close to the top.

Rudy Garza: I was close. But again, nobody had ever put that thought in my head. Nobody had ever had a mentoring conversation with me and said, “Hey, Rudy, you can do this, you know?” And the minute he opened that door for me, my dream changed. My concept of what I thought was possible grew exponentially. I always thought I’d have to leave CPS Energy and go be a CEO of a smaller utility, maybe a co-op, and then maybe I could come back. But the good Lord blessed me with this opportunity. I was the right guy at the right time. The organization needed my particular skill set based on where it was in the moment. Having somebody tell you it’s possible, I can’t underscore how significant that was for me.

Robert Rapier: How does CPS Energy ensure you meet the needs and expectations of your customers and the community? And what role do you play in the economic development of the community?

Rudy Garza: I’ll take the second question first. Nothing happens in San Antonio without
CPS Energy. You can’t build a home or start a business without reaching out to us first.
Nothing happens without the utilities being the best they can be. Economic development
doesn’t happen without a good supply of energy and water. The job Robert Puente does at
San Antonio Water System (SAWS) is equally important to economic development in San
Antonio. You have to have water and you have to have energy.

The way that we remain successful, which is what I focused on when I became CEO, is you
have to be willing to engage your customers, engage your community, and listen to what
they want. I know exactly what my customers want because I’m out in the community
every day talking about the job that we’re doing. They want their electric and gas service to be reliable, and they want it to be affordable, and then they want us to be innovative and sustainable. I need to reduce carbon, but I can’t do that at the expense of reliability or
affordability. I need to balance and achieve these priorities in a time horizon that allows us
to continue to meet the growth of the community.

For a publicly owned utility like us — the largest combined electric and natural gas utility in
the United States — where the rubber meets the road is ensuring that we are always paying attention to our customers’ expectations. I want my customers to feel good about the job we’re doing. The reason we exist is to be the best electric and gas utility we can be for San Antonio.

That’s what drives me. I want my customers to look me in the eye and say, “Rudy, I think
you’re doing a good job.” That’s what’s important to me.

Robert Rapier: What trends do you foresee having the most significant impact on the
energy industry over the next decade? And how are community-owned utilities evolving in
response to these trends?

Rudy Garza: The utility industry isn’t super innovative by nature. Thomas Edison could
come back and still recognize the system he invented. We have to partner with
organizations that are pushing innovation, like the Electric Power Research Institute. EPRI
is thinking about the future and how we evolve our system. But you do have to make some
investments right now by picking technologies that you think have a chance of getting to
the scale that we need them to be. For a big utility like CPS Energy, one megawatt is not
going to make a difference. I need technology that’s going to give me 100 or 1,000 MW.
The only way innovative technology is going to get where we need it to is to actually invest
in it. I think we’re doing a good job of that. We picked partners like Southwest Research
Institute (SwRI) and the University of Texas at San Antonio (UTSA). They’re doing research
for us that I think will make some of these new technologies get us to the future sooner
rather than later.

But again, when you’re in a transition state, you either let change happen to you or you
make it happen. At CPS Energy, we’re going to make the future happen. There’s no doubt
about it. We’re going to be proactive, we’re going to invest thoughtfully, but in a meaningful way, and we’re going to create the future that our customers demand of us.

Robert Rapier: Who or what has been the most significant influence on your leadership
style, and how has that shaped your approach?

Rudy Garza: I just had this conversation with an employee. I’ve always been good at
developing mentoring relationships with leaders at the highest levels. And every leader has
things about them that you want to emulate and probably some things that you don’t want
to emulate. And that’s okay. I’ve been able to take certain elements of every one of my
leader’s leadership styles and create my own leadership accountability profile. For me, I
want to be a humble leader. I don’t ever want it to be about me. I want it to be about the
people that I’m responsible for. I want to be approachable.

I want to feel like my role is no more or less important than any other role in our company. I want our community to feel like they can get to me if they need me. And all of that has
come through different leaders that I’ve been exposed to throughout my career that have taught me what good leadership looks like. Leaders like Doyle Beneby, Paula Gold-
Williams, and former Mayor Joe Adame down in Corpus Christi who I worked with when I was at the City of Corpus Christi. Mayor Adame is one of the humblest Christian men I’ve
ever known and a lot of who he is as a servant leader, is what I’ve tried to be.

Leaders I worked with at the state capitol, like Curt Seidlits, who was a former state affairs
chairman and was my boss when I was at TXU. He taught me how to have a people
strategy. If you’re paying attention and you’re asking the right questions, your journey
through your career should be a culmination of all those mentors who have had a hand in
making you who you are. I like to think that the leader that I am today is because I paid
attention to the advice all those people have given me throughout my career.

Robert Rapier: What are some of those important qualities that you consider in a
successful leader?

Rudy Garza: I’m a leader that expects humility out of my team. It shouldn’t be about us; it should be about the people that we serve. From a leadership standpoint, we have to be
open to criticism. I have this analogy that when my leaders and I are in a room, we’re like
the Knights of the Round Table. There’s no head. There’s no tail. We’re all equal in that
room. And everybody can bring their perspectives and their ideas to the table. And guess
what? They don’t have to agree with mine.

In fact, if my leaders aren’t telling me the things I need to hear, just the things I want to
hear, then they’re not doing their jobs. I want our leaders to follow through on their
commitments. That’s important to me, especially when employees don’t understand our
strategy and they come to us asking questions about why we’re doing certain things. If we
don’t get back to them in a timely manner, if we’re not answering those questions, then
how are they ever going to get on board with what we’re trying to accomplish? That
approachability and that kind of servant leadership is tremendously important to what I
want my leadership team to be at CPS Energy.

I think we’re doing a good job of being accountable leaders, leading with integrity, and
being transparent in why we’re doing we’re doing. All those things are aspects of our core
values. It’s not just about what we do; it also needs to be about how we’re doing it.

Robert Rapier: Yeah, integrity is something I always tell people. If you have integrity,
everything else kind of falls into place. I want to ask about how you balance the demands
of your job with your personal and family life. What’s a day like in your life?

Rudy Garza: I learned from Doyle early in my career about work-life balance. It was not his job to ensure that my work-life balance was right, it was up to me. Having said that, I try hard not bother my employees when they should be having dinner with their families. You may have a one off about an emergency. That’s normal; we’re a 24/7 operation. But you should be able to work efficiently enough during the day to not bother people in the evenings when they should be with their families. I don’t bother people on weekends if I can help it.

At the end of the day, it’s the leader’s job to create an environment where work-life balance
is possible. But I can’t keep somebody from working 20 hours a day if they’re just wired that way. So, part of it is the individual accountability of knowing when to shut it off. And the other part is the managerial accountability of creating an environment that respects
people’s private time.

Kym Bolado: Rudy, one thing struck me very deeply when you said you had never really
thought about your pathway to being the CEO until somebody mentored you. How
important is mentoring in the CPS culture?

Rudy Garza: It’s immensely important. We have multiple mentoring programs that exist to
ensure that we’re paying attention to the diverse talent at CPS Energy. I’m a product of
successful mentoring programs, and that is fundamental to our leadership training
program. We have formal mentoring programs that our People and Culture team manages
in addition to employee resource groups that have their own mentoring programs. I’m
constantly looking for that spark in somebody that says they are ready to do bigger things.
There are people that just stand out because of how inquisitive, positive, or committed
they are to helping us achieve our goals. You have to find a way to recognize people like
that and help them along.

I didn’t dream that I could be a CEO because I didn’t see it. It takes leaders wanting to
reflect their community to develop people in a way that gives everybody the same chance
to be successful. What’s important about mentoring programs is that you’re mining for
talent, trying to figure out who stands out and who’s the most capable. When I look at my
daily priorities, interacting with my employees is absolutely at the top of the list.
I am talking to employees in some part of the organization every single day. I make that a
priority because that’s how I help develop people. They have to get inside my head and
know how I think about things.

Robert Rapier: Rudy, thank you so much for taking us deep into your world today. We
thoroughly appreciate your time and look forward to speaking with you again.

Rudy Garza: My pleasure, thank you for having me.