BRUCIAK LIES TO THE HERALD: "PUB CUSTOMERS WON'T PAY."

"You can say whatever you want about John Bruciak and those guys," the mayor later asserted, "but they do a great job." Mayor Tony Martinez, April 10, 2019

By Juan Montoya

For the past 30 years, John Bruciak has been at the helm of the Brownsville Utilities Board as its CEO and General Manager. 

Over time, he has garnered a $303,576 salary as its top honcho. The other two members of the PUB triumvirate have fared well, too. Fernando Saenz and Leonardo Garcia also earn $273,603 and $263,286 respectively. That's not counting benefits.

(Put into perspective it means that Bruciak et al make about as much as former Houston Police Chief Art Acevedo who will receive $315,000 a year in his new job as Miami, Fla. chief of police.)

You would think that after three decades at the head of the municipal utility Bruciak would know the ins and outs of minding the store.

But why are we not surprised that he has managed to survive the PUB-Tenaska debacle and come out unscathed after raising electric rates by 36 percent, water rates by 20 percent, and wastewater another 10 percent since 2013? 

After raising some $135 million through the artificially high rates, it turns out that the plant won't be built after all and now Bruciak says there are only $29 million left in the PUB kitty.  We are a giving and forgiving people, aren't we? 

If Bruciak and his two bozos had done this in private industry, they would have been thrown out the corporate doors years ago.

$303,576                  $273,603                   $263,286 

Following the debacle of the Big Freeze in mid-February, Bruciak is telling telling PUB ratepayers that if we just give him enough time, he will do a better job. Trust me. 

"...We learned a lot on that. We’re going to make those changes before the next event, for sure,” he told his favorite soapbox, the Brownsville Herald. So after 30 years, Bruciak wants another chance. What is this On the Job Training (OJT)?

It took public scrutiny and questions arose  on how PUB fared during the statewide electric shortage, and who would pay for it. Bruciak, weasel-worded this response:

"..While BPUB’s total $39.9 million shortfall is manageable considering the utility’s “strong liquidity and limited leverage,” the report said. 

In other words, BPUB has plenty of cash on hand and doesn’t owe too much money. Moody’s predicted that Texas utilities facing shortfalls weren’t likely to pass the costs on to customers right away “since rate increases large enough to cover the costs might prompt a backlash, especially since consumers are faced with coronavirus-induced economic turmoil.”

“We don’t want to burden the customer if we can help it,” Bruciak said.

This is markedly different than what Brucaik said during a Feb. 18 press conference hours after the Electric Reliability Council of Texas informed the Brownsville Public Utilities Board that it would no longer be subject to ERCOT-mandated rolling blackouts during the week’s prolonged cold snap, 

Bruciak then expressed fear that the city-owned utility’s customers could get hit with huge bills because of how much it had to pay for natural gas to run its generating units during the extreme weather event.

“Since then preliminary numbers have come in,” Bruciak said. “We know what our sales were, we know what our costs were, and we’ve got a certain deficit on that. The best we can tell, that can be mitigated through cash on hand, reserves and possibly some short-term financing. … Again, the numbers can change, but we’re not planning to pass that along to the customers. We’ve got adequate funding mechanisms here to do it without either adjusting the rates or the fuel charge or anything else.”

Really?

But wasn't it you and your two accomplices who insisted on telling the city commission the cold hard numbers only in executive session and away from the public, that PUB sold $121,488,315 in energy through ERCOT and – after having to purchase more power and keeping ratepayers in the dark in subfreezing temperaturesis –  indebted itself through its elevated production costs of $145,381,251. A few million more in costs here and there and we ended with a $38,190,065 deficit.

Bruciak told the gullible newspaper that: “I know a lot of the public sentiment is that we weren’t trying hard enough, but our guys did everything they could,” Saenz said. “It was nice and cold on top of those bucket trucks. They had families too that were home without power.”

But boss, isn't that their job? 

And then, clouding the narrative with useless facts, he added:

"Despite the problems, BPUB prepared well in advance for the cold snap, securing a supply of natural gas, fueling up generating units at the utility’s Silas Ray Power Station in West Brownsville, quickly reassembling a unit that had been disassembled for maintenance, topping off chemicals at the utility’s water and wastewater plants in case they became unavailable, and keeping those plants powered up to avoid further complications," he said.

In fact, the Silas Ray plant may have been "fueled" up, but it was never fired up to use until after the cold snap had abated. And all those other measures made no difference in the fact that many local residents were without power for three or more days. How will PUB pay for its $38.1 million debt?

"The best we can tell, that can be mitigated through cash on hand, reserves and possibly some short-term financing. … Again, the numbers can change, but we’re not planning to pass that along to the customers. We’ve got adequate funding mechanisms here to do it without either adjusting the rates or the fuel charge or anything else.”

While he says the PUB customers will not end up paying for it, this is what Bruciak and his cadre figured PUB could pay.

Use the $29 million in the Tenaska Equity Fund and...

Use $20 million available cash in the existing Capital Improvement Fund (CIF) from prior years "surplus" funds and tweak the capital improvement project budgets by floating some "commercial paper" to replace the money?

That incurred debt could then be used to raise an additional $10 million. That would leave "only" a $8.2 million shortfall. 

That's where you, dear fellow PUB ratepayer, come in. Not only did you fund the PUB playing of the spot market with ERCOT and lost your shorts, but you also have an opportunity to make up for their shortfall. They sold low and bought high. It's not their money anyway. It's yours.

"Gradually raise the fuel factor charged ratepayers to cover the cost over future months. Our policy does not allow monthly increases to the fuel factor greater than 20 percent, therefore, it would take time to set fuel factor at actual recovery rate."

Donde quedo la bolita?

And if the commission gives PUB the go ahead, PUB could could use $15 million from their Capital Improvement Reserve Fund and another $17 million from something called Operating Reserve Fund. But there's a catch. All that loot would have to be replenished over the next 36 months. Maybe a rate hike, you think? 

Hey, maybe we could "borrow" $13 million from something PUB calls a "Plant Fund" it set aside for long-term liabilities like post-employment benefits (PEB), other than pension distributions, that employees may begin to receive once they retire. Other PEB funds can include vacation and sick leave accruals, life insurance, health insurance, and deferred compensation. In other words, dip into PUB employees retirement benefits.

You know that's not a bad idea. If the commission lets us, we could also raid other PUB workers' retirement benefits like the employee Health Insurance Fund for an additional $11.3 million. After all, they argue, "these funds are not held in an irrevocable trust." Sorry PUB workers. Now you see it, now you don't. (The actual document where these proposals are listed are in the graphic below. Click on graphic to enlarge. Bruciak telling the reporter it won't cost customers a cent is lying. This is his document.) 

As a last resort, we have something called a fuel subaccount that has a balance of $6.6 million and another $9.3 million could be raised from the 2021 FIscal Year budget pending transfers for March to September of 2021. But there's a catch. Those funds are needed to maintain the current fuel factor for the remainder of the year. 

Do you know what the common thread runs throughout all these "proposals" to pull their chestnuts out of the fire?

It all – one way or the other – comes from the PUB ratepayer's pockets. All of it. Trying to make it seem like the PUB customers won't pay for any of these "proposals" is deception at its best and disingenuous at its worse. Time to pull the plug on this con man.

How long will the city and its elected officials put up with this lame excuse of a CEO and his overpaid, underachieving henchmen?