FOR IMMEDIATE RELEASE
May 25, 2013
General Counsel & Press Secretary
AUSTIN — Today Senator Eddie Lucio, Jr. (D-Brownsville) announces final passage of a bill intended to ensure that the Brownsville Public Utilities Board (BPUB) is statutorily able to fulfill its agreement with energy company Tenaska to build a power generating facility in Brownsville. The bill was signed by Governor Rick Perry last week.
BPUB announced it entered into a development and purchase agreement with Tenaska in January, after receiving approval from the City of Brownsville to establish a natural gas utility system pursuant to the City's local charter. Under the agreement with Tenaska, BPUB's new system must transport natural gas to the power generating facility. Additionally, BPUB must purchase 200 megawatts of electricity from the new facility.
Senate Bill 795 by Senator Lucio ensures that both of these agreement provisions are met by making conforming changes to state law. First, the bill eliminates a conflict between state law and the organization of BPUB. The Texas Government Code currently provides that a five-member utility board manage a natural gas system. The City's local charter, however, provides that the seven-member BPUB manage the city's natural gas system. BPUB's membership is comprised of six individuals appointed by the City Commission, plus the Mayor. Without a change in state law, the City would need to create a new board to manage its natural gas system.
Senate Bill 795 provides authority for BPUB to manage the natural gas system. Specifically, the bill provides that a seven-member board may manage such utilities, provided they are located in a county with a population of at least 375,000 on an international border that also borders the Gulf of Mexico. Brownsville, which had a population of around 400,000 after the last Census, is the only Texas city fitting that description.
Senate Bill 795 also clarifies that BPUB may enter into agreements to purchase electricity, including the 200 megawatt purchase from Tenaska. This change in state law is necessary because, while the City's charter clearly vests all the power to manage utilities with BPUB, it does not explicitly grant BPUB authority to enter into power purchase agreements. Senate Bill 795 makes this power explicit in state law.
Senate Bill 795 was a legislative priority for the City of Brownsville. According to a study by the Brownsville Economic Development Council, the new power generating facility could add more than $16 billion to the local economy over its lifetime.
"I'm proud to support this legislation, and to promote the creation of a new power generating facility in Brownsville," Senator Lucio said. "The Valley's ability to produce its own local, clean energy will help modernize our energy infrastructure, create jobs, and increase property tax revenue. This project will be a major economic engine in our area."