CPS Energy awards Austin-based software giant $70M contract

After an exhaustive, yearslong assessment process, CPS Energy has selected a vendor to replace its aging operations management software.

The CPS Energy Board of Trustees voted on April 22 to approve a 10-year, $70 million contract for Oracle America Inc., a division of Austin-based Oracle Corp. (NYSE: ORCL), to provide the utility with a new Enterprise Resource Planning technology platform.

CPS Energy has utilized SAP ERP – an enterprise resource planning software developed by German software company SAP EP – for the last 23 years, according to CPS Energy's Evan O'Mahoney, who presented trustees with a recommendation to award the contract to Oracle. The recommendation followed a competitive evaluation process that involved more than 300 hours of demonstrations from the top three vendors.

"What we are getting with Oracle is truly an integrated, modern utilities platform that is addressing all aspects of our operations," O'Mahoney said.

The new technology platform, which represents approximately 23% of CPS Energy's ERP transformation program budget, will allow the utility to manage its assets and all aspects of its workforce from "recruitment to retirement," said O'Mahoney. On the customer side, the platform will enable more personalized experiences, expand customer self-service and payment options, and meet community commitments for bill and rate redesign.

The technology platform is also scalable, meaning it will be able to grow with the organization over time, O'Mahoney added.

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CPS Energy received 10 vendor responses to install a new platform since issuing a request for proposals in January 2023. In making its decision, O'Mahoney said CPS Energy took a hard look at the vendors' underlying technology and security features.

"CPS Energy was looking for a proven technology partner to modernize its business and deliver the best possible outcomes for its customers, employees and communities," said Safra Catz, CEO of Oracle, in a statement on April 23. "The combination of Oracle's vertical industry solutions and Fusion Cloud Applications, all running on our secure Oracle Cloud Infrastructure, will provide CPS Energy with the performance, intelligence and insights required to drive transformation at scale and generate winning results at every level of the business."

The ERP software replacement is funded by the 4.25% rate increase that went into effect in February, according to CPS Energy. The rate increase will also cover costs to upgrade aging physical infrastructure, invest in more system reliability, physical and cybersecurity, as well as workforce planning.

O'Mahoney confirmed with trustees on Monday that CPS Energy is actively searching for a partner to implement the technology and a partner to conduct independent verification and validation of the technology to ensure the utility is mitigating risks and achieving its desired outcomes.

CPS Energy expects to evaluate proposals and select an implementation partner by the end of fiscal year 2025.