For years people receiving services from Brownsville’s Public Utilities Board have questioned why their rates were so high and climbing. Granted, high fuel costs and general inflation had driven everybody’s light bills up, but those factors seemed only to compound the heavy price Brownsville-area residents and businesses were paying.
Last month we learned that BPUB had agreed to impose incremental rate increases to fund a power plant that never was built, and continued to impose those increases well after officials knew that it never would.
Unfortunately, residents couldn’t do a thing about it — unlike most people living in the rest of Texas.
BPUB is a city-owned utility, and people receiving its services are stuck with it. The utility, and the city, enjoy monopoly status, and residents can’t switch to another power company even if they want to.
However, city officials can’t escape their complicity in this matter. BPUB is an arm of the city and the mayor is an ex-officio member of the board. He and other city officials surely have faced questions from residents asking about their high utility bills. If they responded to those questions as they should have, they should have known about the power plant.
And if they had any curiosity, they should have asked what happened to those plans, as the plant doesn’t exist.
This was exactly the rationale behind state officials’ agreement to deregulate the energy industry beginning in 1995, beginning with the wholesale energy market. Beginning in 2002, Texans could choose their electricity company, and reports indicate that 85% of state households and businesses did so.
Not in Brownsville, however, as municipal utilities were exempted from deregulation.
Results of a forensic audit of the project released Oct. 5 show that the city and BPUB entered into a funding agreement with Tenaska Energy in 2011 to build a $500 million, 800-megawatt gas-fired power plant. Brownsville was to own 25% of the energy produced by the plant. From 2013 to 2016, BPUB imposed five rate increases to raise the money for the project.
Auditors found, however, that Tenaska couldn’t find anyone interested in buying the other 75% of the energy production, and that by 2012 — before the first rate increase — BPUB was “fully aware” that the project likely would fail.
The project clearly was dead by 2015, before the last of the rate increases.
As of 2002, state law enables cities with municipal utilities to allow residents to choose other energy companies if they wish.
Don’t expect that to happen in Brownsville, however, where BPUB is perhaps the city’s biggest cash cow. In 2006 the city, under then-Mayor Eddie Treviño Jr., ordered the utility to begin transferring 10% of its gross revenues to the city. While the transfers might fund more city services, it deprives BPUB of revenue that can offset expenses and keep rates lower.
However, residents who don’t believe city officials will be chastened by the Tenaska revelations can still call for the freedom to leave BPUB if they wish. After all, in the absence of better voter participation, pressure at the pocketbook usually is the most effective way to pressure officials into remaining honest.
