City of Brownsville plans charter changes post Tenaska; BPUB mulls what to do with $29 million in equity funds

A view of the Brownsville Public Utilities Board Administration Building and Annex Building. (Miguel Roberts/The Brownsville Herald)

In addition to pursuing an accelerated 11-percent rate reduction for Brownsville Public Utilities Board ratepayers since the release of a damning audit report spotlighting BPUB management’s role in the failed Tenaska Brownsville Generating Station project, the Brownsville City Commission plans to amend the city charter to give the commission more control over how BPUB is managed.

The rate reduction would be on top of the 11-percent reduction the city implemented in June, though it’s largely been overshadowed by the near record high cost of natural gas, which fuels most of the state’s power plants, resulting in soaring utility bills for BPUB customers and, in fact, electricity customers nationwide, not just in Brownsville.

BPUB is considering what to do with $29 million in a Tenaska equity account generated by a series of rate hikes to pay for the failed project between 2013 and 2016. Returning the money to ratepayers is being discussed.

During the commission’s Oct. 18 regular meeting, City Attorney Victor Flores explained what’s involved in making changes to the city charter, which dates back to 1975 and was amended in 1993, 2010 and 2021 through charter elections, which can only be held once every two years, he said.

That means the earliest the charter could be revised is May 2023, Flores said.

Meanwhile, the charter gives an unusual amount of autonomy to Brownsville’s city-owned utility, especially compared to other Texas cities that own their own utilities, he said.

Brownsville’s charter stipulates that BPUB “shall have absolute and complete authority and power over control” over the management and operation of city-owned electricity, water, wastewater and sewage systems, Flores said.

“The charter has PUB operating as its own entity, as a private corporation even,” he said. “The two main powers provided to the city under this charter are very limited, and those are the authority to appoint PUB members … and the removal of one PUB member every 12 months.”

Otherwise, BPUB “shall appoint and employ all officers” including the general manager, Flores said, noting that Lubbock in comparison is authorized by its charter to appoint and remove the city-owned utility’s general manager.

Denton’s charter goes even further, empowering the city commission to actually serve as the utility board, he said.

Considering how much work it would take to prepare for this charter election and finalize proposed changes, holding it in May “would be pushing it,” Flores said.

“I listed maybe two or three parts of the charter that would need to be amended, just because those clauses are vague and just really don’t make sense,” he said. “They might have in 1975, but not today. I would say if you want to do things thoroughly then maybe shoot for November of 2023.”

Mendez noted that a charter review committee is already in place and said he thinks it’s a case of “the sooner the better” in holding the election, though it’s also crucial to address everything in the charter that needs amending, since any changes would be locked in for two years from the date of the election.

Flores said he would bring “a better timeline and recommendations … and possibly an action item” regarding an election to the commission’s next meeting, on Nov. 1.

“You can start the process and see how far you get, and if you wait till November, you wait till November,” he said.

Another option would be a special election sometime between May and November, though extra costs would be incurred under that scenario.

“I would like to see it happen in May and as soon as possible,” said Commissioner Jessica Tetreau.

As for the $29 million sitting in the Tenaska equity account, Mendez, who serves as the ex-officio member of BPUB’s seven-member board, said that what to do with the money, and how reimbursing it to BPUB customers would affect their average monthly bills, was a topic of discussion at the board’s Oct. 17 meeting.

“I’m anticipating we’re going to take action on that at our next PUB meeting,” he said.

Commissioner John Cowen noted that the city of Brownsville also received extra revenue from the Tenaska rate hikes and said that money should also be returned to ratepayers.

Since 2006, BPUB has been required to transfer 10 percent of its gross revenues to the city once per quarter, minus what the city owes for utility services.

According to the Tenaska audit, conducted by accounting firm Carr, Riggs & Ingram, BPUB transfers accounted for nearly 10 percent of the city’s budget in 2017 after all the Tenaska rate hikes were in place.

“There is a component that the city of Brownsville received from the rate increases as well during that time, and I think if (BPUB) decides to give that money back to the ratepayers, the city should do its part,” Cowen said. “It’s the ratepayers’ money, so we need to figure out how to do that. I know it gets complicated, but I’m sure it’s possible.”


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