It was already a rocky year for the Brownsville Public Utilities Board, swamped as it was with customers complaints over soaring energy bills that were less the fault of the utility and more the result of excessively high natural gas prices related to Winter Storm Uri in 2021.
Anyway, on Oct. 5, 2022, came the release of the results of an independent forensic-analysis report looking into BPUB’s failed Tenaska Brownsville Generating Station, an 800-megawatt, $500 million power plant deal that the utility inked with Nebraska-based Tenaska Inc. in 2013. The 69-page audit report concluded that BPUB management continued hyping the project as viable long after it was clear the numbers didn’t actually work and it would never happen.
In the wake of the audit’s revelations, BPUB Executive Director and General Manager John Bruciak was placed on administrative, where he remains. Other management team members departed the organization.
What made the news of the audit harder to swallow for ratepayers was the fact that BPUB had conducted a series of five rate hikes between 2013 and 2017 in order to pay for its share of building the Tenaska plant, which was 25 percent.
As management continued to promote the project to its board and the Brownsville City Commission, right-of-way acquisition efforts for an associated natural gas pipeline to feed the plant went on as well, which meant that BPUB kept buying land for a pipeline even after it became obvious the power plant would never be built.
According to the audit report, BPUB could have saved the city “millions of dollars in legal expenses had it been prudent and objective when assessing the viability of the project.”
“In short, Management neglected their responsibility to make sure the Board was well informed before making key decisions on spending tens of millions of dollar,” wrote the auditors.
BPUB Director of Finance Mike Perez said about $54 million of the money raised through Tenaska rate hikes was already returned to customers through a program that subsidized ratepayers’ share of Fuel and Purchase Energy charges on their bills. The program was phased out starting June 1 when that particular pot of money ran dry, and customers immediately noticed higher energy bills because the subsidy was over.
Now city and BPUB officials are in the process of figuring out how to return another $40 million in rate-hike-generated funds to customers, with the caveat that individual rebates will be small due to the sheer number of BPUB customers. This process and other responses to the fallout from the BPUB revelations will likely continue well into 2023.
