Increased rates for Brownsville PUB customers continued after failed project, audit shows
In just one year, the average bill for a Brownsville Public Utilities Board customer jumped nearly $40.
The increase wasn’t due to the rate per kilowatt hour, but instead the Fuel and Purchase Energy charge, or FPEC.
According to the Brownsville PUB’s YouTube page, the “fuel and energy charge will change month to month based on market conditions.”
In May, Brownsville PUB explained on its website that it was lowering rates by 22 percent and that those FPEC charges would return to "market rates", canceling the fuel stabilization program that used funds generated from increased rates for the failed Tenaska project.
But, according to the audit released Wednesday, some of those increased rates should have never been collected.
The audit shows that between 2015 and 2017, well after CEO John Bruciak and the management team knew the project had failed, BPUB claimed that it could be penalized by Tenaska for not having funds in place for the project.
The auditors concluded that “this was a manipulation, as BPUB had not only accumulated surplus funds due to the delay in construction, but also that Tenaska had never shown progress.”
The audit goes on to state that the likelihood that BPUB would be called on its obligation was low.
The FPEC rate that BPUB said would reflect market conditions starting in June of this year — something they'd have no control over — was kept low while the utility board stashed away money from increased electric rates.
According to the report, Bruciak and the management team at BPUB concocted a plan to mask increased energy charges on customer bills, artificially lowered the FPEC charge to an unrealistic figure, then used that as leverage to keep Brownsville's commissioners from lowering the Tenaska rates back to normal.
When BPUB said the increases were coming back in May, they claimed the Tenaska funds covered the rate stabilization.
According to the audit of the $118 million in revenue from the increased electric rates, $83 million was set aside and $54 million of that was allegedly for the rate stabilization fund.
Brownsville PUB released the following statement:
"We take the report very seriously and are reviewing it in detail. BPUB will join the city of Brownsville's efforts in addressing the audit's findings."
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