By Juan Montoya
![Image result for rose gowen, brownsville]()
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There is a pile of money paid by the rate payers of the Brownsville climbing past the $90 million mark as a result of a vote taken Dec. 17, 2012 on whether to build a $500 million, 800 megawatt gas-powered plant with private company Tenaska and approving the Public Utility Board to raise rates to pay for the $325 the city;s share of the debt.
The city was entitled to 200 MW for its $325 and Tenaska would receive the other 600 MW. However, under the terms of the agreement (whose entirety has not been made public), Tenaska is not required to move ahead with construction until purchase commitments are secured for all 800 megawatts.
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A presentation at a prior meeting to the city commission by PUB CEO John Bruziak painted a rosy picture. Brownsville needed electric power to attract industry and manufacturing to the area. Building the plant was critical. There was no other alternative and no other company could build it for us, he told them.
The city commissioners bit the hook and approved two ordinances that day; one to authorize PUB to build it, the other to approve the raising of the electric, water and sewer rates of local residents to pay for them. Both passed unanimously. (Click on graphic to enlarge).
Both Rose Gowen and John Villarreal – now up for reelection – voted for both ordinances.
According to the Memorandum of Understanding, the Tenaska-COB- PUB deal was to finish construction completion the summer of 2016. Then it was moved to "sometime" in 2018. Both the PUB and Tenaska have gone to the Texas Attorney General to keep the contents of the MOU from the public.
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Despite the fact that critics pointed out that the coming online of at least two gas-powered, electric generating plants (Edinburg and Harlingen) would make the construction of the Tenaska -PUB plant unnecessary for the needs of the city, Martinez and the city commission inked the deal and raised PUB rates to meet its bond obligations.
A few months after the passage of the ordinances, Fitch Ratings said that that adding the plant's capacity to the energy already available would exceed the area's projected total requirement of 426 MW.
There is a 700-megawatt plant near McColl and Monte Cristo roads in Edinburg that has pumped power into the local grid for more than a dozen years. And the South Texas Electricity Cooperative, a member-owned collective nonprofit based in Victoria, is building $200 million gas-fired power plant with capacity up to another 225 megawatts.
Additionally, the U.S. Environmental Protection Agency in November 2013 to issued a permit for the construction of a similar plant under the name of La Paloma Energy Center, LLC (LPEC). The permit authorizes LPEC to construct and operate a 637-MW to 735-MW natural gas-fired power plant in Harlingen, Texas.
Nonetheless, and despite the fact that construction of the plant would prove costly and redundant, PUB and the city commission went ahead and approved steep five-year planned hikes in rates for electricity, water and sewage services to all its ratepayers.
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Their vote assured that electric rates increased by 36 percent increase from 2013 to 2016, water rates 20 percent increase from 2013 to 2016, waste water servcies 6 percent over over the first two years and stayed there indefinitely.
The city also passed a 10-year tax abatement for Tenaska and promised to run water and gas lines from Edinburg to Brownsville for the plant, which included the purchase of the right-of-way.
Then, Michael C. Roth, Tenaska's Director of Development went before the Cameron County Commissioners Court and askedd them to amend the 10-year tax abatement agreement set to being in January 2016 to January 2018.
Roth justified the change saying the amendment will "sync" it its abatement agreement with the city.
"Given current market factors, we anticipate wrapping up power contracting by the end of 2016 and starting construction in early 2017," Roth wrote the court. "While the schedule is tentative and dictated by power contracts and market conditions, we believe additional supply of reliable energy is needed in the region and will continue to work to make this project a reality."
PUB has not lowered the rates even after it appears that the city has no need for the plant. And now, as residents keep on paying the increased rates, there hasn't been a peep from both of these incumbents that they may have erred in their vote.
There is a pile of money paid by the rate payers of the Brownsville climbing past the $90 million mark as a result of a vote taken Dec. 17, 2012 on whether to build a $500 million, 800 megawatt gas-powered plant with private company Tenaska and approving the Public Utility Board to raise rates to pay for the $325 the city;s share of the debt.The city was entitled to 200 MW for its $325 and Tenaska would receive the other 600 MW. However, under the terms of the agreement (whose entirety has not been made public), Tenaska is not required to move ahead with construction until purchase commitments are secured for all 800 megawatts.
A presentation at a prior meeting to the city commission by PUB CEO John Bruziak painted a rosy picture. Brownsville needed electric power to attract industry and manufacturing to the area. Building the plant was critical. There was no other alternative and no other company could build it for us, he told them.The city commissioners bit the hook and approved two ordinances that day; one to authorize PUB to build it, the other to approve the raising of the electric, water and sewer rates of local residents to pay for them. Both passed unanimously. (Click on graphic to enlarge).
Both Rose Gowen and John Villarreal – now up for reelection – voted for both ordinances.
According to the Memorandum of Understanding, the Tenaska-COB- PUB deal was to finish construction completion the summer of 2016. Then it was moved to "sometime" in 2018. Both the PUB and Tenaska have gone to the Texas Attorney General to keep the contents of the MOU from the public.
A few months after the passage of the ordinances, Fitch Ratings said that that adding the plant's capacity to the energy already available would exceed the area's projected total requirement of 426 MW.
There is a 700-megawatt plant near McColl and Monte Cristo roads in Edinburg that has pumped power into the local grid for more than a dozen years. And the South Texas Electricity Cooperative, a member-owned collective nonprofit based in Victoria, is building $200 million gas-fired power plant with capacity up to another 225 megawatts.
Additionally, the U.S. Environmental Protection Agency in November 2013 to issued a permit for the construction of a similar plant under the name of La Paloma Energy Center, LLC (LPEC). The permit authorizes LPEC to construct and operate a 637-MW to 735-MW natural gas-fired power plant in Harlingen, Texas.
Nonetheless, and despite the fact that construction of the plant would prove costly and redundant, PUB and the city commission went ahead and approved steep five-year planned hikes in rates for electricity, water and sewage services to all its ratepayers.
Their vote assured that electric rates increased by 36 percent increase from 2013 to 2016, water rates 20 percent increase from 2013 to 2016, waste water servcies 6 percent over over the first two years and stayed there indefinitely.
The city also passed a 10-year tax abatement for Tenaska and promised to run water and gas lines from Edinburg to Brownsville for the plant, which included the purchase of the right-of-way.
Then, Michael C. Roth, Tenaska's Director of Development went before the Cameron County Commissioners Court and askedd them to amend the 10-year tax abatement agreement set to being in January 2016 to January 2018.
Roth justified the change saying the amendment will "sync" it its abatement agreement with the city.
"Given current market factors, we anticipate wrapping up power contracting by the end of 2016 and starting construction in early 2017," Roth wrote the court. "While the schedule is tentative and dictated by power contracts and market conditions, we believe additional supply of reliable energy is needed in the region and will continue to work to make this project a reality."
PUB has not lowered the rates even after it appears that the city has no need for the plant. And now, as residents keep on paying the increased rates, there hasn't been a peep from both of these incumbents that they may have erred in their vote.