Just how to go about returning $29 million in Tenaska equity funds to Brownsville Public Utilities Board ratepayers was a top subject of a BPUB special meeting on Oct. 24.
The funds were generated by rate hikes between 2014 and 2016 to pay for BPUB’s share of a failed $500 million power plant project. The $29 million was set aside in a capital improvement fund to cover debt-service payments during the construction phase, according to Mike Perez, BPUB’s director of finance.
The consensus among the board members present was that the money should be returned, and quickly, though no decision was made on the method of reimbursement. Perez said the easiest way would be through the type of bill-reduction program BPUB operated from April 2016 to June 1 of this year. The program used $54 million in Tenaska rate-hike revenue to subsidize ratepayers’ bills by covering a percentage of the fuel and purchase energy (FPE) charges customers pay as part of their bill.
Lowering the FPE rate means “everybody shares equally based on their usage,” Perez said. The program effectively returned a sizable portion of the Tenaska rate hikes to customers since 2016, not including the $29 million now the subject of discussion.
“That’s how it was collected and that’s the easiest way to give it back to the customers going forward,” he said. “Having to go back since day one trying to figure out how much that individual consumed over this period and give him a credit, that’ll be much much harder.”
BPUB Vice Chairman Patricio Sampayo said it’s important to hear “feedback and criticism” from customers regarding options for returning the money, and floated the idea of public workshops or town hall meetings.
“Before we start putting proposals on the table I think what we’re hearing from the community is that we need to listen to them first,” he said.
Sampayo said BPUB might also look to what other cities have done, noting that San Antonio municipally owned utility CPS recently reimbursed its customers $50 million.
“I think it’s very important that we move very quickly on this,” said BPUB board member Arthur “Art” Rendon. “I don’t want to drag this thing out for months and months. I know it is complicated.”
Board member Jude Benavides said “we have a mandate” from the public to return the funds and that it’s necessary to find a way to do it fairly, equitably and responsibly.
“Whatever we need to do, we need to do it quickly,” he said.
Brownsville Mayor Trey Mendez, who serves as BPUB’s ex-officio board member, said he’d like to see as much return on the $29 million as possible and suggested setting aside a portion of the money to those most acutely affected by higher utility bills, such as low-income families and the elderly.
“I agree with setting aside some of that money for low-income families,” Sampayo said. “San Antonio set aside 15 percent. I think we can do better.”
Mendez said he’s not in favor of returning to the type of bill-reduction program that subsidizes FPE charges.
“I don’t like the subsidy on fuel because I think that creates more issues and more confusion as far as what the actual fuel rate is that’s being charged, he said. “I think a straight-up credit per month is probably best rather than subsidizing fuel rates, because it’s going to get confusing again. And there will be that shock once it goes back to market rate.”
A major reason customers’ electric bills are so high now is because the cost of fuel — in this case the natural gas that fuels power plants — is near record highs, and it’s affecting ratepayers nationwide. Benavides said customers’ bills need to clearly stipulate “what amount is being returned and the reason it’s being returned, regardless of what method.”
Mendez said the city commission, at a special meeting earlier in the day, approved the first reading of an agenda item to temporarily suspend late fees and disconnections for nonpayment for BPUB customers until Feb. 28, 2023. The item received a second reading and was approved by the commission at subsequent special meeting on Oct. 25.
Also at the Oct. 24 BPUB meeting, Mendez reported that the city commission, in its meeting earlier in the day, had named two of its members to a city/BPUB committee proposed to allow the two entities to better coordinate planning and policy issues. Mendez will also sit on the new committee. BPUB board members approved creation of the committee at its Oct. 24 meeting as one of two items on the agenda, but did not name board members to it.
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