BROWNSVILLE, Texas (ValleyCentral) — The Brownsville Public Utilities Board met publicly Monday for the first time since the release of a forensic review of BPUB’s failed attempt to build multimillion dollar power plant.
The audience at the meeting erupted in cheers and applause in response to a resident’s public comments, calling upon the board to take action against Brownsville Public Utilities Board general manager and CEO John Bruciak and other officials.
The meeting was streamed by ValleyCentral live on Monday.
Brownsville city commissioners released the candid review Oct. 5, detailing how the utility board in 2011 raised customers’ electric rates to fund a $118 million plan to develop and operate an electric-generating facility, through a deal presented as being a partnership between BPUB and Tenaska, a Nebraska-based energy company.
Consumers saw their electric rates increased by 41.5% over four years to fund the deal. The forensic review alleged the Tenaska Project was presented to city commissioners “as if it was an emergency,” arguing the plant was necessary to prevent a capacity shortage that would hurt the local economy.
The report called this “an intentional fabrication.”
“By the time BPUB made the decision to begin the process of exiting the agreement in December 2017 nearly $30M had been spent on the overall Project and Tenaska had not found a single additional subscriber for the Project,” the review stated. “BPUB knew in February 2015 that the most promising prospective subscriber put any plans of subscribing on hold.”
According to the audit report, construction of the project would not start until Tenaska found subscribers for the plant’s capacity not purchased and reserved by BPUB under the deal. BPUB and Tenaska agreed at least six times to extend the agreement deadlines, in hopes Tenaska would secure necessary subscribers to move the project forward. “Eventually the lack of subscribers led to the final termination of the project,” the report stated.
Immediate anger following the review
The day following the report’s release, residents started a petition calling for BPUB to fire general manager and CEO John Bruciak. The online petition had 478 signatures as of Monday’s meeting.
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.”
On Monday, BPUB’s board did not immediately respond to public comments, which is in accordance to public meeting rules. The board continued to its agenda, which scheduled an executive session to allow the board to discuss the matter privately with its legal counsel.
According to the agenda, BPUB’s executive session allowed board members to discuss the following item, among other items, behind closed doors:
- “Meeting with Board’s legal counsel for advice about contemplated and pending court and administrative litigation and on matters in which the duty of the attorney under the Texas Disciplinary Rules of Professional Conduct conflicts with Chapter 551 (Sec. 551.071). Including among other matters the CRI Forensic Audit Report.”
What were the review’s findings?
Carr, Riggs & Ingram, LLC, was hired to conduct the forensic review “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 report stated.
The forensic review 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 review 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 its conclusion, the review 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 review indicates Bruciak was asked about why the plan was presented in a way that suggested ERCOT would require a 13.75 capacity reserve.
The forensic review stated on page 21: “In our interview with Mr. Bruciak thirty minutes later, we again asked about an ERCOT 13.75% capacity reserve margin requirement for LSEs. He stated that he understood that it was a ‘requirement that ERCOT [had].’ He continued that BPUB was ‘carrying it not because we wanted to but we were because [of a] condition of ERCOT that they wanted you to carry [a reserve margin].’ However, CRI has determined that the statements made by both Mr. Bruciak and Ms. Gilbert appear to have been intentionally false.”
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.”
A ValleyCentral livestream of Monday’s meeting is available here on Facebook.