Combining Technical Expertise with Strategic Vision for Effective CIO Leadership

Sheila Mendez is the VP and Chief Information Officer at TXNM Energy, Inc., the holding company for subsidiaries PNM and TNMP. She has over 33 years of experience in technology and 25 years in the utility industry, overseeing business technology management, cyber-physical security, federal reliability standards compliance, critical infrastructure protection, and crisis management.

Insights about Professional Journey and Current Responsibilities

I joined the company in May 1999 after working seven years in the public sector in city government. Since then, I have embraced various roles and challenges, often stepping out of my comfort zone to lead new departments or major initiatives.

Serving on national committees strengthens my professional network and provides me with diverse perspectives from other professionals on different issues and challenges, allowing us to learn and grow together.

Before becoming CIO, I spent the last two years in the New Mexico transmission and distribution (NM T&D) operations. My teams were responsible for managing new construction of transmission lines, substations, and integrating new, reliable green energy into New Mexico's system and managing the five-year $3 billion capital portfolio for NM T&D Operations and Shared Services. This hands-on experience gave me deep insights into the core business, which I now leverage in IT to better support our operations.

Leadership in community service is also integral to my career. I've served on executive committees and boards of nonprofits and professional organizations to ensure a customer-focused approach. This involvement reinforces the importance of our role in providing essential services for a clean energy future.

The Role of CIOs in Navigating Current Challenges

From a CIO’s perspective, cyber and physical security are top priorities. I am responsible for addressing tier-one risks and reporting to the board on our protective measures. Given the current geopolitical climate and threats to utilities, it's crucial to be vigilant in safeguarding the grid. Utility CEOs are focused on maintaining power and protecting against attacks. We must be diligent in our security measures to identify, protect, detect, respond to, and recover from any incidents.

“The role of CIO is evolving rapidly in response to technological advancements and requires us to integrate new capabilities swiftly while maintaining a focus on security and operational excellence.”

Generative Artificial Intelligence (AI) has made it easier for bad actors to exploit personal information and emotions, tailoring attacks based on our online habits and interactions. They are increasingly using targeted methods like machine-based or phishing attacks. While we focus on hardware protection, including potential threats from malicious chips, we must also enhance early detection for software attacks and ensure robust supply chain risk management. This involves vetting vendors for their products and for their company’s security history.

Protecting humans is challenging due to inherent behavioral risks. We focus on educating both employees and contractors with robust training programs and simulated attacks. Integrating generative AI for innovation and efficiency remains a complex balance, ensuring it enhances operations without creating vulnerabilities we're unprepared to secure.

Trends and Strategies to Tackle Changing Environment

Our business partners and customers expect us to use technology to enhance their experiences. Technology is integral to our daily operations, and our partners rely on us to be the experts so they don't have to be concerned with the technical details. They are interested in industry developments and geopolitical factors and want reassurance from the CIO that we are thoroughly addressing these concerns. This includes conducting third-party assessments to ensure due diligence, participating in statewide, local, or federal grid exercises, and collaborating with labs and other entities on innovations.

They are often surprised when we demonstrate the frequency with which we deflect attacks and prevent them from breaching our systems each day. It's eye-opening for them to realize the level of ongoing protection we maintain to guarantee that our systems remain secure and operational to deliver reliable services to our customers.

Successful Project Initiative: Strategies, Trends, and Key Takeaways

One of the projects I led involved our company entering the Western Energy Imbalance Market (EIM), which is more than just a technology initiative. It required developing processes for buying, selling, and trading excess renewable energy within the Western region. The primary achievement was delivering cost savings directly to our customers. The success of this project was largely due to the strong support from top management and the New Mexico commission, who recognized its importance for positively impacting our customers.

In New Mexico, where there's a mandate to become carbon-free by 2045, PNM has committed to achieving this goal by 2040. Our efforts have led to significant savings that we pass on to our customers. We also engage important stakeholders and team members inside and outside the company and have a solid operating model post-project to sustain ongoing operations.

We added a new EIM desk to the New Mexico transmission power operations center that required additional training and strengthened our partnership with market participants and the California Independent System Operator. This involved integrating human factors, a new business model, and technology to ensure a smooth implementation. We successfully launched on schedule by aligning IT and business teams, ensuring that all steps were completed and that we delivered effectively.

Glimpse into the Evolving Role of the CIO

Our role is evolving rapidly due to the constant advancements in technology. The surge in data centers across the U.S. highlights the growing need for the power industry to meet increasing demands, driven by automation, AI, and machine learning. As digitization accelerates, CIOs must stay ahead of these changes, integrating new capabilities swiftly to deliver optimal services to customers. Project management is evolving, with a shift towards entrepreneurial leaders who leverage technologies like AI to handle administrative tasks, allowing them to focus on managing the delivery of new systems and capabilities.

It's essential to balance having experienced senior technologists with nurturing junior staff, especially in utilities where aging infrastructure demands a diverse skill set. Effective leadership is crucial. CIOs need a broad knowledge base rather than deep expertise in every area. Building a strong leadership team to complement the CIO’s strengths and address any gaps is essential for long-term success.

Advice for CIOs and Upcoming Professionals: Key Considerations and Pitfalls

My leadership principles center on honesty, integrity, transparency, compassion, and passion. I believe in deeply committing to what I do and valuing every team member's voice by actively listening and sharing information. Surrounding myself with a talented and motivated team, I focus on finding stretch opportunities for both myself and my team members to help them grow, gain experience, shape their own professional brand, and engage with executives.

It is important to seek a mentor who can provide guidance in navigating your career and a sponsor who will actively promote growth and provide opportunities to advance in the career. Envision the desired role, timeline, and actively pursue the education and certifications needed to prepare for it rather than waiting for the opportunity to arise. Speak up about your goals and aspirations—self-advocacy is crucial since others won’t know your ambitions unless you communicate them. You are responsible for managing your own career.