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First of all: Is $340,000,000 for 200 megawatts of power a good price? Not according to charts on what a typical natural gas powered plant should cost. While Brownsville's cost averages out to $1.7 million per megawatt, the national average is $917,000 per megawatt. That would be the equivalent of paying $6.09 per gallon for gas when H.E.B. has it for $3.29 per gallon. That's the deal Tony Martinez and his cronies are cooking up for you.(They are likely other hidden costs that will drive our actual cost even higher.)
Does Brownsville need that much power? Not according to Fitch, a highly respected bond rating company. Fitch sees Brownsville's power needs at 459 MW. (Incidentally, Fitch sees this as a very bad financial deal, lowering P.U.B.'s bond rating from A+ to Poor on the basis of this deal going through.) Keep in mind that Brownsville already has an interest in two other power plants, Edinburg and Okla-Union.
One thing to remember is that these power plants have a finite shelf life, likely not over 30 years.
We are preparing a detailed Public Information Request for the City of Brownsville. I will post the actual request on the blog.
Below is one of our earlier articles on the Tenaska deal.
If It is Such A Good Deal, Why Is the Tenaska Brownsville Generating Station Funded by Ratepayers?
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| Tenaska 885 MW Power Plant, Fluvanna County, VA |
Although well-connected politically, not all communities buy Tenaska's sales pitch. Tenaska fought for five years to build the Taylorville Energy Center in Illinois, telling locals that their energy needs were underserved and needed Tenaska's coal-burning operation. When opposition mounted, Tenaska changed their plans to a natural gas-powered plant, but that proposal didn't sell either.
On January 28, 2013, Brownsville's Public Utilities Board signed an agreement with Tenaska for the construction of an 800 MW, gas-powered power plant to be built on 270 acres along the so-called industrial corridor near FM 511. This is the same industrial corridor the Greater Brownsville Incentives Corporation agreed to pay McCaffrey & Associates $454,000 for a development plan. Payment for the plan was split between theGBIC, Port of Brownsville and P.U.B. In December 2013 United Brownsville sponsored a BiNed 2014 Conference at UTB's Gran Salon where UB operatives networked with officials from Matamoros, Harlingen and the port.
The signed agreement between Tenaska and BPUB calls for PUB to control one fourth of the power produced, 200 MW, at a cost of $327 million, financed by city-issued revenue bonds. Those bonds will be repayed over 20 years by the ratepayers paying increased rates for electricity. Of course, the power plant still has another 600 MW of power to sell to surrounding communities. The City of Brownsville will be responsible for piping the natural gas into the plant.
How does the deal sound so far? According to Brownsville Herald reporter Steve Clark,Fitch, a highly respected bond rating company, is not impressed. Clark reported in a March 11, 2014 article that Fitch's bond rating for P.U.B., now an A+, would likely plummet to "negative," based on projected impact of the Tenaska deal:
"In its report, Fitch said it “recognizes BPUB’s proactive strategy to ensure an adequate power supply to meet projected (electricity) load growth,” though the power plant project would boost total available power resources to “well in excess of projected total requirements,” or 459 megawatts.
BPUB’s planned purchase of the 25 percent ownership interest in the plant, if the deal goes through, would more than double current leverage (how much the utility is borrowing) and as a result “diminish future financial metrics according to the board’s latest financial projects,” Fitch reported.
The ratings firm said BPUB’s pending decision to buy 25 percent ownership in the proposed power plant would add an estimated $362 million to the overall size of the utility’s multi-year capital improvement program, which in 2012 had been estimated at a little under $200 million a year.
Fitch noted that the additional capital expense would be funded entirely with long-term debt, which the agency believes would weaken BPUB’s financial situation enough to lower its bond rating."
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| IBC Bank President & United Brownsville Tri-Chair Fred Rusteberg |
Whether dealing with SpaceX or Tenaska, Brownsville's civic leaders have not shown themselves to be good negotiators with desperation replacing sound judgement. Who pays for their miscalculations? Brownsville's hardworking, but generally impoverished, ratepayers and taxpayers.
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| Carlos Marin, Ambiotec Engineering & United Brownsville |
As for the United Brownsville operatives, higher utility rates for the public or wasted tax dollars are not a concern as long as they can cash in on the lucrative development of the industrial corridor.
It is enough to make any one sick.... How on earth does the mayor, the city commission and PUB Board ignore the fact that we do not need it and are over paying to finance someone else's private project for profit. Aside from the cost to built, plus the $40 million to acquire ROW and build the pipeline, the water PUB is pledging to operate the plant is weakening our ability to meet PUB customer needs at low cost. Thank you for the report and keep it up.
ReplyDeleteJust got my pub bill this month$385 no Fucking mames never seen it this high. man were getting fucked by pub
DeleteI agree with Mr. Ahumada. This is an outrage. The citizens of Brownsville are getting raped without the courtesy of using vaseline. This assholes are lining their pockets without so much as a whimper from the idiots that got them elected. This includes those that choose to NOT exercise their right to vote! This has to stop.
ReplyDeleteTony Martinez and all his United Brownsville buddies know this is not a good deal for the rate-payer....the citizens of Brownsville! They know it but the deal promises "Lil Oscar Garcia a good job....and likely Bruciak from PUB and maybe even Eduardo Campriano's family. This deal promises big bucks for those in power.....and high cost electricity in the future for the citizens. Do Tony Martinez and his cronies care....no. The "Lawyer's First Rule of Success and Survivial" is "Get all you can up front for yourself and your friends".
ReplyDeleteAs mayor of Brownsville, Tony Martinez has proven to be the puppet for United Brownsville,,,,especially Julieta Garcia, Fred Rusteberg and Carlos Marin. Tony Martinez doesn't care about Brownsville....he cares about himself and his "budz".
This is why Brownsville (PRI city) will NEVER change, it's in the genes:
ReplyDeleteOn this subject, Jesus Silva-Herzog Mรกrquez (one of Mexico's top intellectuals) wrote an article for the newspaper Reforma ("Conversation His Way "), released today, which said that
"the President sees corruption as a minor annoyance, a cultural habit. It’s a world phenomenon. It’s human nature, he insisted. Then he gave us his deep and firm conviction: corruption is a cultural phenomenon. Corruption 'is a cultural matter'."
He noted that
"to locate corruption in the space of custom is to abdicate combating it institutionally; it is to rely on the intervention of the centuries, to excuse abuses with anthropological rationales. The presidential confession is extremely worrisome. To continue thinking at this point in time that corruption is a matter of 'cultural order' means that corruption exists because 'that's how we are. Cheating is in our historical nature'."
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ReplyDeleteThe nepotism standard is circumvented by the "good old boy system" or better known in our culture the "compadre" system, which should be scrutinized and challenged through a complaint, because citizens are asked to pay for the insider deals and job creations for the select few under the caste system. A complaint should also be filed on the Nylon Building deal, because there is no way anyone can justify paying 70% above Cameron County Appraisal Assessment Value. Seventy percent is kinda hard to ignore and either, or, the Appraisal District has it sooooo wrong that it fails to asses the rest of the downtown properties by 70% or the mineral rights that are under the building justify paying 70% above market value for a building we have no use for. These same people accused me of theft over an incident that was obviously political in nature to destroy me financially and politically, with the hope they could lock me up for 30 years. These people are evil, first and foremost the Chief Carlos Garcia who was doing their bidding.
I have said all along the Tenaska deal is not in our best interest when we already have sufficient stock in two power plants that supplies the 54,000 homes PUB has a monopoly over. Regulation protects PUB and we have no business partnering with Tenaska to build a power plant they want at a cost of 46% above what is should cost and it should cost us less, since we supply the water for coolant and need less megawatts for growth when you take into account the generation we already own with the two plants operating. One megawatt can service 625 homes, 200 megawatt can service 125,000 homes and we are servicing approximately 54,000 homes with the existing megawatts purchased through stock in the Edinburg and Oklaunion plants. Mathematically it makes no sense, none whatsoever to invest in a power plant that is premature for the present homes we have to service and premature for anticipated growth when the life expectancy of a plant is 30 years, at which time it will have to be refurbished or is obsolete due to current technology of the time. . . . .
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ReplyDeleteBesides all that is known and the financial advisors, the bond rating Fitch are against this project, the mayor is pushing hard when it is obvious he sought the position not to serve the city, but only a select few and himself, should give anyone major concern that our city and PUB is being hocked to the max and money is being spent extravagantly depleting capital improvement funds and reserves to feed his ego and his co-conspirators.
We are more in need of a water desalinization plant at the Port to meet future growth than the Tenaska plant, which makes more sense financially to deal with anticipated drought and growth conditions.This whole network with Carlos Marin and the Mayor should be investigated and indicted if influence peddling, nepotism, and failure to protect taxpayers interests can be proven. The fiduciary duty Luis Saenz harps about should not be ignored, I do not care if they are connected to the Bishop, Pope, and the Federal Judge Hanen. The indifference we are experiencing by law enforcement clearly shows the double standard that is applied in this community. The process should be fair, transparent and accountability applied where and if needed. No excuses or trying to justify ignorance, because this does not wash.
If I could, I would move away, but after two trials that cost me $200,000, the closing of my business that cost me another $200,000+, I am financially ruined which is what they sought to do over politics. These allegations against the elite are far above the low standard applied to me. Here you have irrefutable facts on the real estate deals and Tenaska costing at a minimum 46% more to build than it should, plus any other costs unknown and jobs that will go to a select few. DA do your freaking job. Get off your pedestal with your mustache to investigate by calling for an independent inquiry into the shenanigans that have become blatant against citizens. We do not want an investigation that looks the other way, like what happened with the District Clerks office, your relative was fixing cases to go to certain Judges or when her son Joey was caught steal over $150,000 from a Day Care facility, or when two nephews, one being a jailer hits a pedestrian and flees the scene and is still working as a jailer, or the many other cases where statiscally jurors were selected to favor an out come, as hapend in my case, but backfired, and worst of all you pursuing me to ruin me knowing you had no case. No one associated with the phantom check that no one knows how it got to me was prosecute, nor Pete Gonzales that destroyed the check log tha would have proven I did not pick up the check, especially when I never set foot in his office prior to that incident, then you have a rogue police chief who I stood up against over a dog and made him back down that was using his official capacity as police chief to pursue a personal vendetta-None were investigated or indicted when they clearly paved the way to create a perception that i some how stole a check that was in the possession of Pete Gonzales. You sir, being born in Matamaoros brought with you the corrupt ways to deal with people who you oppose. You perhaps a wet back at one time, want to pretend you are a full Amercian when you come from the Mesquital area and became our police chief only to do evil. .
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ReplyDeleteI think, It is safe to say that I was very much a engaged mayor when it came to PUB water and electrical needs, but more so in looking to future generation, which took me to go an inspect Wind Farms, coal generated plants and gas. I also took the time to travel as a far as Florida to inspect water desalination plants and looked into aqua filter alternatives, but mostly the weir project that could have been built if it were not by eht heavy interference by Carlos Cascos who did all he could to undermine the project. Having said this and knowing our present and future needs, a plant to meet Tenaskas needs is not in our best interest, but they will benefit enormously by getting PUB to upfront costs and guarantee funding to minimize Tenanska;s risk and .help them favorable secured funding. Will Tenaska supply the Port of Brownsville or PUB. Will electric generation we produce be subject to a fee by Tenaska to connect to our grid to distribute, which is 1 to 2 cents per kilowatt. Will the maintenance and operation of the plant be within our sole control? Will Tenaska pay for their share of the water PUB supplies to cool the turbines? Will Liability issues be covered solely by PUB? . Project O&M (operating and maintenance) be subject to absolute control to Tenaska. Will orders for materials be made through PUB to benefit government lower costs and later billed to Tenaska at a savings? A plant this size needs 30+ acres to build and Tenaska is using 270 acres, who paid for the land acquisition. Is PUB paying exorbitant amounts for ROW to avoid condemnation proceedings.and building the gas pipeline to the tune of $40 million, when gas is being located within our region and could be used.
Most of all, the deregulation of Energy in Mexico will cause major investment buy exploration companies and energy providers, which can only mean a plus for Brownsville. I foresee agreements that can be made with Mexico to supply some of the excess they will have, as their peak hours differ from ours and the energy not use burns out of inot sold. This is something I pushsed for 25 years ago and Mexico was willing,but instead PUB sold the same concept and right to A&EP or CPL who has a line from our Military Substation to Mexico's CFE net and it can be down to help us keep cost down.
Finally, in closing, I think I am one of the few who really understands both City and PUB issues and how they impact us, because if you look to the board-they tend to be brown nosers who prefer to go along than to ask questions and stand up fo what is right. Unfortunately, I am not there and it is up to the citizens to care enough to write letters in opposition of the Tenaska deal, call for an investigation, and demand that the authorities start looking into the United Brownsville Group with the intent to hold them accountable for tort interference with city government, as their is no other way to hold them accountable. This is something of major concern, who are they to take over our government through their influence peddling when they are not elected and there is no way to hold them accountable. Citizens, you are hog tied to the powers that be for their benefit and not the over all good.
Before the superiority complex individuals criticize, I do not proof read my posts, due to my limited time. What is stated is with the intent to get the over all message out that something is wrong with the Tenaska deal and the reader can be indifferent or take the time to write a complaint to the Public Utility Commission by going to their website at www.puc.texas.gov. Just tell them that you think $1.7 million per megawatt is excessive for a plant we do not need. .
ReplyDeleteThe following was my complaint submitted to the PUC and encourage others to do the same.
ReplyDeleteTo Whom It May Concern:
As the former mayor of Brownsville, Texas, former PUB Board member, and concerned citizen, I file this complaint in opposition to the proposed Tenaska/PUB Power Plant to be built on 270 acres north of FM 511. PUB is purchasing all the ROW and building a gas pipeline from Edinburg, Texas to Brownsville at a cost of $40 million to upfront part of the cost to build the proposed Tenaska/PUB 800 megawatt plant. Brownsville’s cost share is estimated at $340 million, not including PUB furnishing all the water to the plant for coolant from our desalinization plant on FM 511, which will also have an adverse water supply impact on PUB customers to build this plant.
Brownsville’s share is to be 200 megawatts at an approximate cost of $1.7 million per megawatt, which is excessive in comparison to the national average to build a similar plant. Then if you take into account that 200 megawatts supplies 125,000 homes and add this to the generation portfolio PUB has through its share of Oklaunion and Edinburg plants, it will become an over kill portfolio to buy 200 megawatts we do not need. And, if you compare the existing rates, PUB is higher in some instances with Magic Valley and others, with Magic Valley providing annual dividends to its members or customers, while PUB does not and is municipally owned. Higher rates, building a plant tied to rate increases and the extreme cost per megawatt makes this project not feasible or in the best interest of the citizens of Browsnville.
This deal smells like an insider deal with the mayor pushing hard when we do not need the plant, as we already have stock in two plants, with one located in Edingburg and Oklaunion. Even the bond rating Fitch does not recommend Brownsville pursuing this project for various reasons.
De-regulation has protected PUB’s monopoly, but with this joint venture with Tenaska a private owned company, I think they are benefitting from the publicly owned PUB company and circumventing de-regulation that protects PUB customers. Already we have higher rates than what we should and this deal is not in the best interest of PUB customers. I oppose it and ask that the permit be not issued or pulled.
Pat Ahumada
53 Alan A Dale
Brownsville, Tx
Very well said Pat. I am glad you took the time to write your informative comentary. I have restored my confidence in you and I would vote for you for Mayor again if you were to decide to run again. We must not forget the suit filed by Alex Hinojosa Jr. CEO of Hino Electric Power Co. We have yet to hear of any new developments on this. He could be a good person to join forces with our community.
ReplyDeleteAnonymous 2:53 pm, thank you!! Alex is a friend of mine, but I lost his telephone number when my phone was stolen. I tried contacting him via the website, but got no response. I hear, Alex has been under the weather a bit and his son is in charge, but I am not sure. Yes, he would be a great source of information on this matter and should be sought for counsel. I urge others to write with a complaint to the PUC stating that we do not need or want this power plant, as it is costing us almost twice the national average cost for a similar plant. As far as mayor, I think my star has set, but hopefully we will get someone who is not afraid to stand up for what is right. Let's keep our fingers crossed and hope someone who cares about our city will run for mayor. This mayor has proven to be in it for all the wrong reasons... and the well being of our city is not one of the reasons. Thanks again..
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