Community enraged by report findings

PUB Forensic Examination: First in a Series

At the start of Monday’s Brownsville Public Utilities Board meeting, members of the community expressed feelings of anger and heartbreak over the findings of the Carr, Riggs & Ingram LLC Forensic Examination Report on the Tenaska Project that never came to fruition.

On Nov. 1, 2021, the City of Brownsville engaged CRI to investigate BPUB’s activities leading up to and after an agreement with Tenaska Inc., an international power development company, to build a local natural gas-fired generating station, according to the report.

Protesters gathered outside the BPUB Annex on Robinhood Drive while the public meeting took place inside. Brownsville resident Susan Ruvalcaba spoke during public comment and called for John Bruciak, BPUB general manager and chief executive officer, and any other current members of the management team mentioned in the report, to be put on unpaid administrative leave.

As of today, an online petition by ratepayers to have Bruciak fired has garnered 521 signatures.

Bruciak was present at the meeting but made no comment at any point about the report.

“This board has a job to protect and serve,” Ruvalcaba said. “This is your obligation, not your choice. Today you must step in without hesitation and do what is right by the citizens of Brownsville.”

Keila Taboada, also a Brownsville resident, said many people are angry after learning what the report says.

“I think it’s time you guys take action in reducing [utilities] rates that were raised for us,” Taboada said about rate increases that were implemented to fund the project. “Because, clearly, they went to nowhere, just to enrich other people.”

She said there are people in Brownsville that cannot afford their bills, and they continue to fall behind.

“All of you have family members here,” Taboada said. “You have friends that live here. You should want to see the whole community strive.”

The CRI Forensic Examination Report states that the “driving force” behind the interest in building a generating station was a “widely publicized impending capacity shortage” described in a 2011 Integrated Resource Plan developed by engineering firm Black and Veatch (B&V) for BPUB to aid in “long-term planning by evaluating supply and demand for energy services.”

However, information from the Black and Veatch Integrated Resource Plan has been repeatedly proven wrong or unlikely, such as the projection that gas prices from Henry Hub, a distribution hub on the natural gas pipeline in Erath, Louisiana, would increase year after year and double by 2035, according to the CRI report.

Ruvalcaba also described the Tenaska Project as an “elaborate plan to steal money from the citizens of Brownsville.”

One objective of the investigation was to identify “whether any irregularities or illegal acts” took place in furtherance of or in relation to the project, according to the report.

In late summer of 2011, BPUB management reached out to Tenaska to express interest in building a local 800 megawatt natural gas-fired generating station to meet demands for the Brownsville area.

Of the 800 MW capacity, Brownsville would have been entitled to 200 MW and Tenaska would have to find subscribers for the remaining power.

At the time, BPUB management was Bruciak; Fernando Saenz, former assistant general manager and chief operating officer; Leandro Garcia, former chief financial officer; and Marylin Gilbert, former director of Energy Services and Energy Risk Manager. Gilbert left BPUB in 2014 and returned in 2022 as the current assistant general manager and chief operating officer.

In October 2011, BPUB and Tenaska formed a non-disclosure agreement to facilitate discussions. On Jan. 25, 2013, definitive agreements were finalized and a commercial operational date was set for June 2016.

However, Tenaska’s inability to find subscribers despite at least six deadline extensions led to the termination of the project, but the city did not receive formal notice of this until August 2020, according to the CRI report.

“One of the things that … had been shown to us by our former mayor, [Tony Martinez], and by the city commission and [BPUB] at that time was that we were going to get this great entity called Tenaska and it was going to come and bring all this economic development to our area,” Brownsville resident Erasmo Castro said during the public comment. “Unfortunately for us, we learned that Tenaska … was not going to happen.”

Castro also spoke about how utility rates have increased 36% due to the Tenaska Project. He noted the number of security officers in the room and said he believes the meeting’s “increased level of security” was due to the realization that the people in the community are “very upset.”

Near the end of the meeting, the board went into executive session, during which it met with legal counsel for advice on matters, including the CRI Forensic Examination Report.

Upon return, the board announced it will conduct an expedited review of the report, according to local news reports.

At 11:45 a.m. Tuesday, BPUB issued the following statement:

“It is clearly important that we respond to the audit in a measured, factual, and deliberate manner that takes into account what is best for the community, the City, and Brownsville PUB.

“We must do this quickly and in such a way that we capture the narrative of the audit with our collective objectives in mind with the aim of minimizing negative external impacts to our ability to function effectively in the future.

“We do caution that even after the brief time we were given to read and digest this extensive report, there are some potential factual issues. This is important because in order to determine how to proceed with what’s best for our community, we need a common base of agreed facts.

“We feel it prudent to allow those listed in the report a specified period of time to respond to the opinions and allegations specified in the audit.

“We will conduct an expedited review of the audit, either internally or with the possible help of outside professionals, to help us sort through the facts and present an accurate foundation for moving forward.

“We understand and we feel the tremendous concern conveyed to Brownsville Public Utilities Board by the public. So, once we have taken the above steps, we aim to engage with the City to address in an expedited fashion the mistakes that were made, the root causes, and make whatever structural and/or personnel changes that are needed to ensure the Brownsville Public Utilities ship returns quickly without delay to its core mission and the major challenges we and the entire utility industry are facing.”