In January 2013, City of Brownsville Mayor Tony Martinez unveiled a plan for the City of Brownsville and private energy company Tenaska to enter into a Memorandum of Understanding (MOU) to build a $500 million natural-gas powered electric generation plant.
What few people knew was that the past December 17, 2012, the commissioners had approved authorizing the Brownsville Public Utility Board to undertake the project, and also approved the raising of the utility rates to back the bonds that would be issued for its construction. The original plans called for the plant to be finished by June 2016.
Now, five years after the vote and raising of the rates, there is still no plant as the increased rates generate what has been calculated at more than $90 million. Today, a majority of the city commission is asking for an independent review and fiscal audit of the project to determine whether or not it was a feasible idea to begin with. Their executive session agenda also authorizes the hiring of the energy expert to review the feasibility of the project.
Under the terms announced by Martinez back in January 2013, PUB would keep 200 (one fourth) MW of the projected 800 MW even though it was paying more than three-fifths ($325 million) of the cost. Under the general terms of the agreement, BPUB must acquire land and secure permits for its pipelines. Tenaska has to find wholesale buyers for the plant’s remaining 600 megawatts and secure federal, state and local permits — a lengthy process the company has already begun, a spokesman said back then.
But while they made it seem that selling the 600 MWs of power was a piece of cake, a glut of energy on the market has stalled the project. Under a clause in the closely-guarded MOU, Tenaska is not obligated to start construction of the plant until it has customers for the remaining 600 MWs.
Ever since then, when the PUB is asked for a copy of the MOU drafted by PUB counsel Eddie Treviño and the company's lawyers, the PUB has protested the informational request with the Texas Attorney General claiming it would be hurt if the"competitive" energy market and would release proprietary information to its rivals.
What was not widely reported at the January announcement was that a unanimous city commission led by Martinez had already approved a schedule of rate utility hikes to pay for the bonds.
Their vote assured that electric rates increased by 36 percent from 2013 to 2016, water rates 20 percent from 2013 to 2016, and waste water services 6 percent over over the first two years and stay there indefinitely.
The city also passed a 10-year tax abatement for Tenaska and promised to run water from its Robindale plant and purchase right-of-way for a natural gas line from Edinburg to Brownsville for the plant.
Then, Michael C. Roth, Tenaska's Director of Development went before the Cameron County Commissioners Court and asked 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."
At their joint meeting in December, John Bruciak, BPUB general manager and CEO, said the agreement with Tenaska wasn’t the only option for addressing Brownsville’s electricity needs and keeping rates in check, but it was the best option. An alternative would be to build additional generating capacity a little bit at a time with small-scale projects, though that method is less efficient and cost effective, he said. Neither is buying additional power on the open market a feasible option in light of the state’s current electricity shortage, Bruciak said.
“We looked at a lot of things,” he said. “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.”
But there was something flawed in that analysis on which the construction of the plant was justified.
Since then, the Fitch Rating Service has said that there is a glut of electricity on the grid and that there are some 465 MW of extra power available locally after the completion of a similar plant in Edinburg went on line and construction has begun on another in nearby Harlingen.
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.
Today, at the joint PUB-COB meeting held in City Hall, protesters called for an end to the Tenaska project and demanded that the millions collected be returned to the residents and the rates lowered.
Another item on the commission's agenda is a resolution in support for the use of the Brownsville-South Padre Island Airport. Apparently, commissioners Jessica Tetreau and Cesar de leon want the city administration to order its employees who must =travel outside the city to use the Brownsville airport, which the city subsidizes, instead of going to the Valley International Airport, a city-owned airport three miles northeast of Harlingen.
"Why is the city subsidizing its airport and then have its administrators and staff fly out of Harlingen?," asked a city official. "It's like someone shooting themselves in the foot. It just makes no sense. I'm amazes it took them this long to figure that out."
8 comments:
This is bullshit the rate payers deserve their money back commissioners forget that we the rate payers own PUB
For seven years Mayor Tony Martinez and his flunky commission has introduced "plans" and spent lots of money, but to day almost none of their plans have brought businesses or jobs, or any sign of progress to this city. The citizens have seen lots of failure by the Tony Martinez administration....and those failures have cost the tax payers millions of dollars, while Tony's friends and associates have benefited. And, now, at election time, the incumbent members of the city commission have a "my lips are sealed" position and continue to avoid any opportunity to talk to the public. No transparency and no competency from city hall.
You don't need to give another crony another half a million to tell you that the Tenaska project is worthless, that it will never get built because our fucked up leaders at BEDC and PUB once again charged brownsville taxpayers for something that never gets built. Sounds familiar? And now these corrupt leaders want taxpayers to pay someone to tell us we got fucked. Watch Who THEY hire.
Why build a small narrow gasline to McAllen when SPECTRA is going to build a monster 42 inch high volume line direct from the Eagle Ford? Gas is nearly free there, an SPECTRA or others will build B'ville a power plant for free.
What came first - State Farm Arena or the Vipers?
What came first - State Farm Arena or the hockey team?
How many of you have gone to a concert at the State Farm Arena? probably 90% of you.
Hidalgo built the State Farm Arena and it took off like crazy! Now Edinburg is getting a new arena and a soccer stadium and it will take off like you have no idea.
Whats the common denominator? Vision.
Investment in infrastructure like Tenaska is vision. All you people have vision for is creating your garage into a game room and watching the stupid cowgirls.
Anonymous at 10:52. Who the hell are you to criticize "all you people?" This is not"vision" we are talking about. This is corrupt elected officials abusing their position and enriching themselves and their friends at taxpayers expense . Tony Martinez and his commission along with Eddie Trevino must be held accountable .
El gran robo juanito and no one can do anything against it, it has been like this for many years, even decades, el que chinga y el chingado.
Vision stfu if we had leaders with vision we would have had already done what Edinburg is doing right now you dip shit., fking Rick longoria is been on the commission for what 12-14 yrs he hasnt done shit but grab his ankles along with the rest.Look at the city manager who doesn'tt manage shit its amazing they let this none educated ex cop run shit fking sad for tax payers.BROWNSVILLE needs new leaders fast.
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