By Juan Montoya
Almost three years ago – back in December 2017 – the administration and members of the City of Brownsville Public Utility Board decided to indefinitely suspend the Memorandum of Understanding between it and Tenaska to build a $500 million gas-powered electric plant.
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It wasn't until today – August 10, 2020 – that they finally told the city commission of their decision. In fact, PUB administrators kept pretty much everyone in the dark as usually happens after a heavy rain in the city.
Unlike the press conference and fanfare staged at the announcement eight years ago, the PUB administration chose to keep the suspension of the project close to their vests and chose not to tell the city commission of the decision.
It turned out that all the projections by its top administrators – notably those of CEO John Bruciak – for its need that were to be funded by increases in utility rates that started in late 2012 , kicked in force on 2013, and kept rising until the end of 2016...were wrong.
But it wasn't until today that they told city commission officially. And forget about a rollback in rates. In fact, they hinted they might be higher in 2021.
"Prior to the meeting today," asked District 4 commissioner Ben Neece, did you every officially notify the city of the termination of the Tenaska project?"
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"No," answered PUB CFO Leandro Garcia.
The PUB found that the lower prices in fuel – which were blamed on those damn Arabs in OPEC – overturned all their plans and projections and they decided to scuttle the project.
All that is left of the estimated $100-plus millions of dollars that were raised through the increase in utility rates is some 50 miles of water and gas right-of-way without any current use and a $29 million fund that PUB has kept for a rainy day. No report or notification of the expenditures or balance left of the Tenaska monies were ever reported to the city.
"Did you ever officially notify the city of the $29 million," Neece persisted.
"No," Garcia answered.
And, in reference to a "package" that the PUB board and administration sent the city commission around noon Tuesday going into more detail on the debacle an the pennies left over from the splurge over the last seven years, Garcia's answer to the question by Neece was the same.
"No."
"Did anyone officially inform the city of the expenditures before today? Apart from the package that you gave us today, that you wanted to keep confidential, have they been provided to the city?"
"No."
"And has the $9.5 million write-off hasn't disclosed or the city been properly included in an officialy to the city?," he asked.
"No."
But if you think that the high rates that were put in place in December 2012 will be rolled back to their pre-Tenaska levels, think again. The answer is still "no."
Throughout the Zoom meeting, it was clear that the fable of a municipally-owned gas-powered electric-generating plant crumbled soon after the city commission under then-mayor Tony Martinez rammed through the proposal and jacked up the utility rates.
But now, Garcia explained – because Bruciak was unusually silent – PUB has used at least $48 million of its surplus funds to add to the $54.5 million in Tenaska-generated rate increase funds to pay a total of $102.6 million in fuel costs to keep rates level.
"A rollback or reduction in rates means that they will get a higher bill because of fuel surcharge is going to get higher," Bruciak spoke at last. "It will also impact the transfer of PUB funds to the city. Be cautions because if you roll the rates back there's going to be consequences...We're going to be short on energy in 2021."
Everyone thanked everyone after the meeting, including Bruciak and his two top dogs at PUB who argued for the construction of the plant and the increase in utility rates. Mendez – apparently impressed with their substellar performances – agreed to meet with the PUB guys to discuss future energy needs with renewables such as wind, solar, etc.
Does anyone remember what this CEO and his overpaid underachiever cadre told the city commission and the residents back in December 2012 and January 2012?
"The multi-year rate plan will support growth (and)...the bond issue will take care of our future needs (for the next five years out into October 2016)....The rate increases will take care of our future needs and provide low-energy costs to the residents of Brownsville."
“We looked at a lot of things. We did an integrated resource plan on the power supply that looked at everything in the state that was available. This hands down was the most economical and efficient for our residents.” Bruciak at joint meetings of the commission on and PUB boards Dec. 11, 2012, and January 2013.
Consequences? What consequences? Bruciak and the commissioners parted ways amicably agreeing to work together "in a positive way" to address future energy needs.
Almost three years ago – back in December 2017 – the administration and members of the City of Brownsville Public Utility Board decided to indefinitely suspend the Memorandum of Understanding between it and Tenaska to build a $500 million gas-powered electric plant.
It wasn't until today – August 10, 2020 – that they finally told the city commission of their decision. In fact, PUB administrators kept pretty much everyone in the dark as usually happens after a heavy rain in the city.Unlike the press conference and fanfare staged at the announcement eight years ago, the PUB administration chose to keep the suspension of the project close to their vests and chose not to tell the city commission of the decision.
It turned out that all the projections by its top administrators – notably those of CEO John Bruciak – for its need that were to be funded by increases in utility rates that started in late 2012 , kicked in force on 2013, and kept rising until the end of 2016...were wrong.
But it wasn't until today that they told city commission officially. And forget about a rollback in rates. In fact, they hinted they might be higher in 2021.
"Prior to the meeting today," asked District 4 commissioner Ben Neece, did you every officially notify the city of the termination of the Tenaska project?"
"No," answered PUB CFO Leandro Garcia.The PUB found that the lower prices in fuel – which were blamed on those damn Arabs in OPEC – overturned all their plans and projections and they decided to scuttle the project.
All that is left of the estimated $100-plus millions of dollars that were raised through the increase in utility rates is some 50 miles of water and gas right-of-way without any current use and a $29 million fund that PUB has kept for a rainy day. No report or notification of the expenditures or balance left of the Tenaska monies were ever reported to the city.
"Did you ever officially notify the city of the $29 million," Neece persisted.
"No," Garcia answered.
And, in reference to a "package" that the PUB board and administration sent the city commission around noon Tuesday going into more detail on the debacle an the pennies left over from the splurge over the last seven years, Garcia's answer to the question by Neece was the same.
"No."
"Did anyone officially inform the city of the expenditures before today? Apart from the package that you gave us today, that you wanted to keep confidential, have they been provided to the city?"
"No."
"And has the $9.5 million write-off hasn't disclosed or the city been properly included in an officialy to the city?," he asked.
"No."
But if you think that the high rates that were put in place in December 2012 will be rolled back to their pre-Tenaska levels, think again. The answer is still "no."
Throughout the Zoom meeting, it was clear that the fable of a municipally-owned gas-powered electric-generating plant crumbled soon after the city commission under then-mayor Tony Martinez rammed through the proposal and jacked up the utility rates.
But now, Garcia explained – because Bruciak was unusually silent – PUB has used at least $48 million of its surplus funds to add to the $54.5 million in Tenaska-generated rate increase funds to pay a total of $102.6 million in fuel costs to keep rates level.
"A rollback or reduction in rates means that they will get a higher bill because of fuel surcharge is going to get higher," Bruciak spoke at last. "It will also impact the transfer of PUB funds to the city. Be cautions because if you roll the rates back there's going to be consequences...We're going to be short on energy in 2021."
Everyone thanked everyone after the meeting, including Bruciak and his two top dogs at PUB who argued for the construction of the plant and the increase in utility rates. Mendez – apparently impressed with their substellar performances – agreed to meet with the PUB guys to discuss future energy needs with renewables such as wind, solar, etc.
Does anyone remember what this CEO and his overpaid underachiever cadre told the city commission and the residents back in December 2012 and January 2012?
"The multi-year rate plan will support growth (and)...the bond issue will take care of our future needs (for the next five years out into October 2016)....The rate increases will take care of our future needs and provide low-energy costs to the residents of Brownsville."
“We looked at a lot of things. We did an integrated resource plan on the power supply that looked at everything in the state that was available. This hands down was the most economical and efficient for our residents.” Bruciak at joint meetings of the commission on and PUB boards Dec. 11, 2012, and January 2013.
Consequences? What consequences? Bruciak and the commissioners parted ways amicably agreeing to work together "in a positive way" to address future energy needs.