TENASKA ANOTHER SLIGHT-OF-HAND COSTING RATEPAYERS

By Juan Montoya
Exactly a year ago to this day, City of Brownsville Mayor Tony Martinez unveiled an agreement between the city and Tenaska,  Tenaska Inc., an independent energy company based in Omaha, Neb., to buy an ownership interest in an 800-megawatt, natural gas-fired power plant that Tenaska plans to develop on 270 acres at FM 511 and Old Alice Road.
At the time, Martinez did not mention the cost associated with the deal that never went before the voters, and the only guesstimate the PUB ratepayers got was a vague mention of incurred debt. That debt, interestingly, forced Fitch Ratings to lower its rating for PUB bonds that made it more expensive to borrow money.
About the only indication Brownsville residents were able to get was from Fitch, the only player in the mix that was not gagged by Martinez or the energy company.
The Fitch Ratings report from March 2014 stated that the Tenaska project would add an extra $362 million to the roughly $200 million BPUB was planning to spend on capital projects through fiscal year 2017. The extra capital expenditures would be funded completely with long-term debt, according to the report.
Most of that debt will be paid by "small" rate increases, PUB spokesmen said.
Those "small" increases were approved in December 2013 during a special meeting of the Brownsville City Commission and the PUB members the ratepayers were never told why. They adopted upwards rate hikes that will see city residents pay a 36 percent increase in electric rates over the next three years, a 20 percent increase in water rates over the same period, and a 6 percent hike in waste water costs over two years.
Under the plan approved by both bodies, electric rates alone will go up by 14 percent by October 2013 and another 22 percent by October 2016. (Click on  graphic to enlarge.)

In Tuesday's Brownsville Herald, the newspaper reported that Tenaska had a final green-house gas  'Prevention of Significant Deterioration" permit from the U.S. Environmental Protection Agency.
The story also stated that for that $325 million in debt that the PUB ratepayers have been shouldering for more than a year and a half, PUB will get 200 of the 800 MWs that will be produced by the plant.
We're not mathematicians here, but it does seem like if the PUB ratepayers are paying $325 million of the $500 million cost, that they should be entitled to a bit more than one-quarter of the power produced, don't you think?
The report gratuitously also pointed out that Tenaska "demonstrated stewardship of Texas' invaluable historic landmarks with considerations for Palo Alto Battlefield Pak," according to EPA Regional Administrator Ron Curry, who said that Tenaska's agreement to "mitigation and minimization measures of more than $2.1 million " over a span of years to preserve and enhance the park."
That "mitigation and minimization" is nothing more than Tenaska using the eminent domain of the City of Brownsville to run the unsightly power lines and metal utility poles through the private property north of the battlefield.
But if they think that's going to be a cakewalk, they better be ready to shell out a lot more than the measly amount it is said they want to pay the owners for the use of about 30 acres of their proposed industrial park. One of the partners in that park just happens to be "un perro chato" named Abraham Galonsky. If the $2.3 million sale of his Casa Del Nylon to the city covering half a city block is any indication, Da Mayor might just have to put in a good word to the Tenaska people to open their wallets a little bit more. That $2.1 million might not go that far, after all.
The city and Tenaska have fought against the release of the actual costs and what obligations the ratepayers have in the deal by fighting to block the release of the details in court.
In July 2013, Alex Hinojosa Jr., president and CEO of HINO Electric Power Company, Hinojosa filed a Texas Public Information Act request for all documents related to the Tenaska-BPUB deal. BPUB’s attorneys requested a ruling from the state attorney general stating that the information Hinojosa is seeking is exempt from disclosure.
This blog and another party from Virginia had also filed the same request only to be met by PUB and Tenaska's objections to release the information.
The local newspaper reported then that in response to the Hinojosa request the PUB attorneys cited a section of the Texas Government Code permitting exemptions in the case of public power utility information that is “reasonably related to a competitive matter.”
They also argued that Tenaska’s “proprietary interests” could be impacted if the information were released.
The attorney general’s office issued an opinion — based on sample documents supplied by BPUB attorneys — that stated the information Hinojosa requested was indeed protected from disclosure under the Government Code.
In response, Hinojosa, through his attorney, Jason Maness, filed a “motion for mandamus” in state district court in a bid to get the attorney general’s decision reversed. Maness said the motion seeks a private review of the documents before the judge and puts the burden on BPUB to explain why they’re exempt.
Hinojosa said he just wants to get at how much the Tenaska deal — including attorney and consultant fees — is going to cost BPUB and its ratepayers.
“There’s a lot of things that are disclosable,” he said. “Not every single thing is a trade secret. We don’t want to see their trade secrets. The bottom line is how much are they paying?”
BPUB spokesman Ryan Greenfeld said the overall project cost and BPUB’s share are confidential since the project is competing with other proposed power plant projects elsewhere in the Rio Grande Valley. Releasing cost projections “would give advantage to competitors or prospective competitors,” he said.
If a Fitch Ratings report from March is any indicator, the Tenaska project would add an extra $362 million to the roughly $200 million BPUB was planning to spend on capital projects through fiscal year 2017. The extra capital expenditures would be funded completely with long-term debt, according to the report.
And so we – the PUB ratepayers – have been paying incredibly high utility rates for more than a year and a half and we don't even know how much the project will ultimately cost, what the share of debt between the private company and the city is, and why we are paying three-fifths of the cost and getting one-quarter of the benefits.
Does this make sense to anyone, city commission candidates?