BROWNSVILLE, Texas (ValleyCentral) — Brownsville city commissioners released an audit report Wednesday that addressed a failed proposal to build a multi-million generating plant station for the city.
In 2011, Tenaska, a Nebraska-based energy company, presented a plan to develop a site to build and operate a electric generating facility with the Brownsville Public Utilities Board.
Tenaska Brownsville Generating Station proposed to focus on electricity production, economic impact and environmental effects.
The plant station intended to “boost the local economy”, “provide hundreds of construction jobs” and produce electricity for “approximately 400,000 Texas homes,” according to a Tenaska fact sheet.
BPUB agreed to own a percentage of the 800-megawatt natural gas power plant.
BPUB was to cover $30 million, entitling the utility to 200 megawatts of the plant’s output. Tenaska would cover the rest of the plant’s construction costs, keeping the remaining 600 megawatts.
Utility rates were raised and collected over several years to raise funds for BPUB’s ownership share.
The city initiated the audit report in Dec. 2021 to “address transparency, conflicts of interest, and other ethical and legal issues across the city, its respective boards, and BPUB,” the news release stated. “The city commission remains committed to further resolving the specific issues and concerns listed in the Tenaska Audit Reports.”
What were the findings?
Carr, Riggs & Ingram, LLC, was hired to conduct the forensic audit “for the purpose of investigating the activities of the Brownsville Public Utility Board… leading up to and occurring subsequent to the formulation of an agreement with Tanaska… to build and operate” the power plant and a related pipeline, the audit stated. The audit investigated whether there was evidence of any “improper activities” and to provide an accounting of “all funds set aside for and expended in connection with the Project.”
“Sources that worked with the board told us that most Board members were unfamiliar with the level of technical information involved in many of the major decisions,” the audit stated. “When experts and engineers came in to the meetings with long presentations and big numbers it was easy to get overwhelmed.”
The audit indicated that a “contrived capacity shortage” in 2011 contributed to local officials’ decision to pursue the project.
In the audit’s conclusion, it stated: “Perhaps more so than any other factor, the driving force behind the 2011 IRP and the subsequent pursuit of the Tenaska Project was the widely publicized impending capacity shortage described in the IRP and frequently vocalized by BPUB and Mayor [Tony] Martinez. Yet, the 2011 IRP merely parroted an outdated and overstated forecast at Management’s direction. Further, Management directed B&V to add an additional capacity reserve margin of 13.75%, falsely claiming to its Board and the COB that it was an ERCOT requirement.”
The audit concluded that the Tenaska Project was presented to city commissioners “as if it was an emergency, using the artificial ‘imminent’ capacity shortage together with a narrative of failed business development efforts, which they claimed were linked to [a] lack of generating capacity — an intentional fabrication.”