SHEEN WEARS OFF TENASKA; RATES CONTINUE TO RISE

By Juan Montoya
The Tenaska-City of Brownsville Public Utilities Board deal to build a $500 million, 800 MW gas-generated electric plant has been delayed by at least another two years, moving its planned construction completion from the summer of 2016 to sometime in 2018.
 The deal was announced with much fanfare by Mayor Tony Martinez when he announced the agreement in January 2013 and was hailed as a landmark achievement to attract big industry and manufacturers to Brownsville.

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.
The cost to PUB was said to be some $325 million, which would guarantee it 200 MW of the 800 planned production.
Bu there was a caveat. Tenaska announced that it would begin construction when it had found customers for the other 600 MW.
Apparently, lower energy costs and demand has stymied the company's efforts and they have moved the original scheduled o beginning construction in 2014 and complete it by the summer of 2016.
Now, Fitch Ratings is saying 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.
That permit was challenged by the Sierra  Club claiming its emissions would harm the environment, but that challenge was denied.
Nonetheless, and despite the fact that construction of the plant would prove costly and redundant, PUB and the city commission went ahead on December 2012 (before the plant's January 2013 announcement) and approved steep five-year planned hikes in rates for electricity, water and sewage services to all its ratepayers.

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.
And on Tuesday's Cameron County Commissioners Court meeting, Tenaska will ask that body to amend the 10-year tax abatement agreement to being in January 2016 to January 2018.
Michael C. Roth, Tenaska's Director of Development, justifies 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."
Now that these sages of energy have been proven wrong, will the city and PUB rescind the hike in rates and credit its ratepayers for the delay? Or will they just continue to charge the ratepayer for their foiled scheme?