By Juan Montoya
After increasing electric rates by 29 percent since April 2013, the generous folks over at your friendly Brownsville Public Utility Board have announced they will decrease electric rates on its ratepayers by a whooping 8.1 percent.
But this does not include any retraction of the 29 percent of rate increases scheduled since the five-year plan to finance $325 million for a 200 MW share of the 800 MW gas-fired electric plant with Tenaska was adopted by the city commission..
Nor does it do away with the final 7 percent increase of the planned five-year rate hikes to fund the bond issue necessary to build the plant. That whammy is set to go into effect this October. (See graphic below)
Adding the scheduled 7 percent in October means that PUB is dangling a 8.1 percent decrease carrot after it places a total of 36 percent in rate hikes since 2013. This, in effect means that the 8.1 rate increase in reality means that PUB ratepayers will have seen their electric bills go up by about 28 percent. Compared to that hike, the 8.1 rate decrease amounts to sop toward Brownsville ratepayers.
PUB entered into a development agreement in 2013 for a 200 MW ownership interest in a proposed 800 MW Tenaska Brownsville Generating Station (TBGS) .
It was announced with great fanfare by non other than Da Mayor Hizzoner Tony Martinez.
It was to be built by 2016, but despite warnings from cooler heads about low market energy prices and a glut of electricity from other gas-fired generating plants coming online during that time, the project was approved by a pliant city commission.
Now the plant construction has been delayed indefinitely. But the rate increases have continued to generate millions for PUB and it is still planning to go forward with the bond issue. The millions generated by electricity are in addition to the millions generated by the hikes in water and wastewater.PUB is expected to finance its share of TBGS with a sizable bond issuance in 2018 to pay for its $325 200 MW share of the 800 MW that was to be generated.
This is the math. PUB rate payers will pay $325 million of the estimated $500 million (more than one half) cost and get one fourth of the power generated, if it's ever built.
PUB put the five year package of electric rate increases in place beginning in fiscal 2013 to support the planned TBGS capital investment. The increased revenues and plant delay have bolstered revenues and reserves to strong levels. Therefore, the 8.1 percent reduction announced on page C-1 of the local daily.
Under the terms of the agreement, Tenaska is not required to move ahead with construction until it has commitments for the full 800 MW plant capacity. Since Tenaska and BPUB's announcement in early 2013, no additional commitments have been secured for the remaining 600 MW. Construction on the plant and on BPUB's related components (gas and water delivery lines) will not occur until the remaining 600 MW is subscribed.
The PUB's capital needs, aside from assumed financing related to Tenaska, are projected to be funded by revenues and slightly less than $100 million in additional debt.
According to Fitch Rating Services, the Tenaska plant will add another $350 million. The delays have meant that BPUB has been accumulating reserves generated by the rate increases to create an equity funding component for the plant. This means that PUB has been able to reserve $19 million into an equity reserve in fiscals 2014 and 2015, and budgeted another $10 million deposit in fiscal 2016.
Fitch also says that low natural gas prices 2 the coming online of the other plants – and the addition of substantial wind generation capacity have contributed to low energy prices and the lack of new non-renewable capacity construction in the region.
While management still anticipates participating in the project if and when Tenaska proceeds with construction, low energy prices have provided an economic option for meeting load in the service area. BPUB continues to tentatively plan to issue debt in fiscal years 2018-2020 to fund the $350 million Tenaska construction.
So enjoy the generous 8.1 percent sop of a rate reduction in electricity rate folks. You paid for it more than four times over.
14 comments:
The Mexicans are damned lucky to have cheap electricity! They should move to Matamoros and see how they like those rates. And I'm okay with shitty blogger Jim Barton being pummeled in every Rrun Rrun story. Crybabies don't sell in Browntown!
Like matamoros everyone there has their light nigger rigged
Hear, Hear!
What does this have do with just Mexicans you ignoramus ,PUB should have given back to the rate payers and even more a long time ago. we own PUB you fucktard!
The electric rates were increased by 36%, wagter by 20% and wastewater by 6% and those responsible walked away unscathed, but what they are not telling you is the millions spent on the Tenaska project when it was pushed by the mayor and Eddie Trevino and they get rewarded by getting elected. They fail to tell you is that all the financial advisers, including Fitch bond rating agency said it was not in the city's best interest to do this project and they still went ahead and spent millions of dollars on a project to nowhere, the same as the Bridge To Nowhere at the Port of Brownsville with no one held accountable. They tell you what a great job they are doing by reducing our electric rates, but are they really reducing our rates when you compare to other electric companies like Magic Valley? As. a municipal owned monopoly who owns the local transmission lines as compared to other utility companies, we should be consistently a minimum of 20% less than Magic Valley. I would not be taken in by their self serving marketing claiming a reduction in rates when they increased the rates, spent millions on a project that was not feasible from the start and was going to cost us twice as much than market rates to begin with. The mayor's scam benefited a lot of people and now they are wondering how else can we be scammed, because after all we give them a blank check to do it with.
The picture of Tony Martinez with the charro suit and hat makes him look RIDICULOUS!!!
Mexican/Gringo wannabee.
Electricity from PUB is expensive but if you live in an old home and cannot afford energy efficiency windows your best bet in the film used to cover glass windows; you can save up to 75 dollars a month.
There is no reason Brownsville residents should pay any PUB charges; Chris Valadez found a way to skirt paying, and he's Carclos Cascos's flunky! What's good for the Pendejo is good for the rest of the Pendejos!
What, no comment yet poking fun at Whiteboy blogger Jim Barton? I was getting to like those.
Zeke
Fuck you Zeke , you ignorant convicted felon!
Who is the PUB board? What are their backgrounds or interests? That would be a good story. Right Pat?
You mean, Zeke Silva? This Zeke is an idiot.
It's time we protest PUB rates. They do what they want because we don't complain, or do anything about it. Let's march into city hall and PUB, and let these giant rats know that we're not gonna take it anymore!
Out-of-town wannabe Duardo "writes" all the fake Zeke Sauceda comments.
To commenter @ 7:57 P.M.:
No, I'm not Duardo. Keep guessing. I have you where I want you.
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