Proposed BPUB rate adjustment sparks strong emotions from City Commission: Customer bills may increase

An explanation for a rate adjustment to Brownsville Public Utilities Board’s electricity and wastewater services left a city commissioner on the verge of tears during last Tuesday’s Brownsville City Commission meeting.

After recommendation from the BPUB, the Brownsville City Commission approved a roll back and adjustment to the electric base rates for the utility’s customers during the item’s first hearing. 

The BPUB is recommending a 22% rate increase due to an increase in fuel prices.

Victor Flores, Brownsville city attorney, said the second hearing, which will confirm the commission’s decision, will be held during the May 3 meeting.

“I find it disingenuous that here we are trying to roll back the rates,” said Brownsville District 1 City Commissioner Nurith Galonsky Pizana during the meeting. “This is me talking real honest. We’re rolling back the rates pre-Tenaska, but we just took $10 million from the ratepayers, which were savings that PUB was able to earn because they were able to sell for the benefit of the city. 

“Yes, it’s the benefit of the city, but that’s also a win that could have been passed onto the customers. It could have been taken off their bill. So, it’s a double-edged sword.”

Miguel Perez, chief financial officer for BPUB, presented the rate adjustment to the commission and said that in 2013, the utility charged an average bill of $102. In the same year, the board decided to make that price its target.

“We subsidized the fuel rate to maintain that $102, but … everything that was pushed from that 22% was all pushed back to the customer because we artificially reduced the fuel charge,” Perez said.

This means that every dollar that was charged for the 22% was given back to the customer. 

Due to an increase in the price of fuel, BPUB can no longer maintain its average bill of $102 for its customers, Perez said.

However, if the proposed rate adjustment is approved, the fuel rates will change, and over the next two years, BPUB will go back to the original rates that were in effect on Oct. 1, 2013.

Now that BPUB is no longer subsidizing the fuel cost, customers will see an increase in their bill. The average monthly bill for residential customers is projected to be $113.03 for 2022 and $113.52 in 2023, according to the agenda packet.

“I remember sitting in the [UTB/TSC] Cueto Building with the PUB … when you all presented to us the first time and it dragged on for a long time,” said District 2 Commissioner Jessica Tetreau. “It took a while. … I had so many questions. … These rate increases were going to increase and it was like ‘Why?’ 

“I had so many questions and I would be told, you know, ‘This is a good thing for Brownsville. We need this power consumption, and nothing will ever come if we don’t have it, and you don’t understand.’ So, explain it to me. It was just one of those things, like, ‘You don’t understand,’ but nobody would explain it. … I remember being so embarrassed. Somebody just please explain it to me. And that’s when I had this feeling, like, ‘If they won’t explain it, something is wrong.’ You just want me to pass it, but you won’t tell me why.”

At that point, Galonsky Pizana interjected to ask if Tetreau had voted on said items and wanted to clarify that the decisions made with BPUB were done before her appointment to the board. 

The two went back and forth, but ultimately Tetreau regained the floor to give her opinion on what the commission should consider in regard to the rate adjustment. 

“All I ask [of] the commission is that … you really, really, really do the right thing by the ratepayers,” Tetreau said. “Yes, we did subsidize the fuel and I feel like that does make up a lot for it. … But all I ask [of] you is that you really, really advocate for these ratepayers that have been through so much and just do the right thing by them and make sure that they are compensated for what they’ve been through. … All I’m trying to ask is for fairness and to be fair and to be honest and to be open and to be transparent and I feel like the ratepayers deserve that as well.”

District 3 Commissioner Roy De los Santos said that while he understands Tetreau’s point of view, “doing right by the taxpayers isn’t always about lowering their bill.”

De los Santos said it is also about what the city is delivering and if it is setting itself up to be able to deliver even through the toughest times.

“It’s not easy to tell to a customer,” said John Bruciak, general manager and CEO of the Brownsville Public Utilities Board. “And that’s kind of a rollout we need to do now because we didn’t know what the commission was going to do. But now, we gotta roll out to the customers and explain that ‘you’re gonna get a reduction in your bill, but your bill may go up because we’re now gonna set the fuel at the real cost.’”

The three components of a customer bill are the customer service charge, the energy charge, which are the base rates and in which the 22% rate increase is included based on an average user rate of 1,000 kilowatts per hour), and the fuel charge, Perez explained to The Rider.

All electric utilities are allowed to recover fuel costs and the revenue that was generated from the 22% rate increase was given back to customers through the reduction or subsidization of the fuel charge.

“The rates currently are at about $8,” Perez said. “ … A year and a half ago, those prices were $2. That’s a significant increase and so we’re gonna have to increase that fuel charge in the coming month.”

All utilities are allowed to recover that fuel cost and BPUB has subsidized that fuel cost ever since the last rate increase in 2016, he said.

De los Santos said he would have preferred if the item was presented to the commission after BPUB completed the Tenaska audit.

Tenaska is a private, independent energy company whose project with BPUB did not come to fruition, Perez said in an interview with The Rider. 

“It would set the public’s mind at ease,” De los Santos said about the audit. “All questions can be answered at that point and, as I understand it, we are looking at a possible delay in that now. So, I’m not comfortable moving forward with the rate adjustment at this point until I see that audit.” 

Mayor Trey Mendez replied that he did not understand how the audit would change anything because it is “mutually exclusive.”

“Personally, I can’t not lower it knowing that the consumer is still going to continue to pay something that they shouldn’t be paying,” Mendez said.

All commissioners except for De los Santos voted to approve the rate adjustment. The second hearing for this item is scheduled for the May 3 city commission meeting.