For nearly a decade, Brownsville residents paid higher utility rates under a plan built around a new natural-gas power plant that was supposed to secure the city’s energy future.
The proposed Tenaska Brownsville Generating Station was advertised as an 800-megawatt power plant on approximately 270 acres north of the city. The Brownsville Public Utilities Board would own one-quarter of the plant, giving the municipal utility 200 megawatts of generating capacity. Tenaska would find other purchasers for the remaining power, construct the facility and operate it.
The plant was never built.
A later accounting verified that BPUB collected $114,809,414 through rate increases designated for the Tenaska project. The city received more than $11.4 million through its automatic transfer from BPUB revenues. Millions more were spent on lawyers, engineers, consultants, land and easements for a pipeline that would never serve the promised generating station.
The project’s failure was costly. The manner in which it was prolonged was considerably more disturbing.
The forensic examination commissioned by the City of Brownsville concluded that BPUB management, with the knowledge and occasional involvement of former Mayor Tony Martinez, appeared to have intentionally misrepresented or falsified essential information to obtain approval for the project and preserve the rate increases associated with it.
Investigators found that BPUB officials knew by 2017 that the plant was effectively dead, but the public was not formally told until 2020. The utility continued acquiring property rights after the project’s collapse had become clear internally. Consultants operated under conflicts of interest. Millions of dollars in professional fees continued to flow. At one point, an attorney advised officials to let the matter remain quiet because disclosing the project’s condition could interfere with unfinished eminent-domain proceedings.
The examination did not find evidence that the vendors receiving BPUB payments had submitted fraudulent invoices. It did not determine that every dollar collected disappeared. Much of the money was eventually returned through refunds or used to suppress later utility bills.
The scandal documented in the city’s own records concerns the conduct of the public institutions controlling that money. Brownsville residents were charged under a project that officials privately understood was failing, while the city financially benefited from the increased utility revenue and landowners continued facing condemnation proceedings for infrastructure tied to a plant that would never exist.
A Power Shortage Built on Questionable Assumptions
BPUB began seriously exploring the Tenaska project around 2011. The utility argued that Brownsville faced an approaching shortage of dependable electricity and needed new generation to serve a growing population.
That need was presented as urgent.
The proposed solution was an 800-megawatt combined-cycle natural-gas plant developed with Tenaska. BPUB would purchase 200 megawatts of capacity and a corresponding ownership stake. Tenaska was responsible for finding customers willing to subscribe to the remaining 600 megawatts before construction could proceed.
The difficulty was immediate. Tenaska never secured enough outside customers to make the plant economically viable.
According to the city’s forensic report, the original power forecast used to support the project relied on assumptions that overstated Brownsville’s need for additional generation. BPUB incorporated a reserve margin of 13.75 percent into its projections and presented that margin as an ERCOT requirement, even though investigators found it was not mandatory for BPUB in the manner represented.
Investigators also found that the utility relied on an older demand forecast even after later information indicated that electricity demand was not growing as quickly as previously predicted.
Other energy proposals were available. A competitive request for proposals produced alternatives that could have provided power with less long-term financial exposure and greater flexibility. The forensic examination found that those alternatives were not fairly incorporated into the analysis presented to policymakers.
Black & Veatch, the engineering firm BPUB hired to evaluate the project and recommend whether it should proceed, later received additional work connected to the same project. It was also identified as an independent engineer by Tenaska and maintained separate business relationships with the private developer.
The forensic investigators described this arrangement as a significant conflict. The firm advising Brownsville about whether the project made economic sense stood to obtain more work if Brownsville moved forward.
The Rate Increases Arrived Before the Power Plant
In December 2012, the Brownsville City Commission approved a series of utility-rate increases that would be imposed in stages between 2013 and 2016.
The increases were promoted as necessary to finance BPUB’s share of the Tenaska plant and support broader utility-system needs. Brownsville residents began paying more even though construction had not started and Tenaska had not found customers for three-quarters of the proposed plant’s output.
The formal agreements were signed in January 2013. Construction remained dependent on Tenaska finding other subscribers.
That never happened.
Rather than terminate the arrangement when the commercial foundation failed to materialize, officials repeatedly extended project deadlines. The forensic examination identified at least six extensions.
The increased rates continued.
An independent accounting commissioned by BPUB after the scandal became public verified that $114,809,414 had been collected through the Tenaska-designated portion of the rate increases by Nov. 30, 2022.
Because Brownsville receives a percentage of BPUB’s gross revenues, $11,480,941 was transferred from those collections to the city government. BPUB retained a net amount of approximately $103.3 million.
Of that amount, $29 million was placed into a Tenaska Equity Fund. Another $74.3 million was placed into rate and fuel stabilization accounts that BPUB used to reduce or offset later customer bills.
The accounting firm performed agreed-upon procedures rather than a comprehensive financial audit. It relied partly on management’s representation that the customer-consumption data provided for review was complete. Within that limited assignment, the accountants verified the movement of the designated revenue through BPUB’s records.
The existence of the stabilization accounts means that the entire $114.8 million was not lost. It also means Brownsville ratepayers were compelled to provide BPUB with an enormous pool of money that the utility later repurposed when the project used to justify the charges failed.
By 2017, Officials Knew the Project Was Dying
The official narrative survived longer than the project itself.
By early April 2017, the forensic examination found, BPUB management and Mayor Martinez knew the project was “dead in the water.” Tenaska had been unable to find the additional power purchasers necessary to finance construction, market conditions had changed and the demand projections used to support the original agreement no longer held.
Instead of clearly presenting that conclusion to the public, investigators found that officials altered or misrepresented information in BPUB’s 2017 Integrated Resource Plan.
That plan was supposed to help the utility determine how much energy Brownsville would need and which combination of generation, market purchases and renewable resources could provide it.
The forensic report concluded that BPUB management manipulated the analysis to preserve the appearance that the Tenaska project remained necessary. Investigators found that management continued advocating for the plant despite evidence that less expensive and less risky alternatives were available.
The BPUB board was informed by November 2017 that the project was no longer expected to proceed. The board nevertheless did not formally notify the city government or Brownsville residents of the project’s demise until August 2020.
The board itself was not found to have intentionally misled the City Commission during the original 2012 and 2013 decisions. The forensic report drew a distinction between management’s conduct and the board’s initial understanding. It nevertheless found that board members later became aware of the project’s collapse and allowed the public silence to continue for nearly three years.
BPUB officially terminated its remaining Tenaska agreement on Feb. 4, 2020. The utility’s own public account of the project acknowledges that changing energy markets and lower-cost alternatives eliminated the original need for the plant. BPUB has also conceded that customers should have received clearer and timelier information.
That explanation addresses why the plant eventually became unnecessary. It does not explain why the public was kept in the dark after officials had already reached that conclusion privately.
“Just Let the Sleeping Dog Lie”
The most striking evidence in the forensic report concerned the gas pipeline and the land required to build it.
The proposed plant needed a new pipeline connecting Brownsville to natural-gas supplies. BPUB began acquiring easements and rights of way from landowners along the proposed route. When owners would not agree to sell, the municipal utility could use eminent domain.
Those proceedings continued after officials knew the generating station was no longer expected to be built.
A November 2018 internal email quoted in the forensic report showed a special attorney advising BPUB to “just let the sleeping dog lie.” The attorney warned that disclosing the project’s true condition could interfere with the utility’s unfinished right-of-way acquisitions.
The utility delayed terminating its last agreement connected to the plant until Feb. 4, 2020, nearly the latest date permitted under the contract. Investigators concluded that the delay was tied in part to BPUB’s desire to finish acquiring the land.
The forensic examination described continued right-of-way acquisitions after April 2017 as having occurred under false pretenses. Residents confronting the government’s condemnation power were not necessarily being told that the plant supposedly requiring their property was no longer considered viable internally.
A later City Auditor follow-up focused specifically on the right-of-way issue found that after November 2017, when BPUB would have known the project was not proceeding, the utility acquired easements involving 61 parcels owned by 36 separate entities through eminent-domain judgments valued at $1,317,596.
The follow-up also compared BPUB’s appraisals with property owners’ valuations. BPUB’s appraisals ranged from approximately 7.8 percent to 47.6 percent of the corresponding owner appraisals, averaging about 38.7 percent.
The auditor cautioned that the comparison did not automatically establish that BPUB undervalued the land. Some landowner appraisals included crops, drainage systems and other improvements, and owners in condemnation disputes frequently submit higher estimates than the acquiring government. The extreme disparities nevertheless warranted scrutiny because the acquisitions continued after the utility knew the plant’s central purpose had collapsed.
The later independent accounting traced approximately $3.4 million in total right-of-way costs across 124 parcels. Ninety parcels were acquired through eminent-domain proceedings, while 34 were obtained through direct purchases.
The accountants said they could not determine whether the value of those assets had been impaired and recommended that a licensed appraiser determine their current value. BPUB has argued that the acquired corridor remains a utility asset that could be used for other infrastructure.
That may preserve some public value. It does not erase the manner in which the land was obtained. Brownsville residents and rural property owners faced government condemnation for a project that officials privately understood was no longer moving forward.
The City Profited From the Rates It Approved
Brownsville’s government was not a detached regulator in the Tenaska arrangement.
The City Commission approved BPUB’s rates. The city also receives a transfer based on the municipal utility’s gross revenue. When utility revenues increase, the amount available for transfer to City Hall can also increase.
The forensic examination identified this structure as a conflict of interest.
By approving the Tenaska-related rate increases, the city simultaneously authorized a new financial burden on residents and expanded a revenue stream supporting the city budget. In 2017, BPUB’s transfer represented nearly 10 percent of the city’s operating budget.
The independent accounting later calculated that $11.48 million from the Tenaska-designated rate collections flowed to Brownsville through the city transfer.
The forensic report also described efforts to use BPUB money as leverage against reducing rates. Investigators found a draft communication offering as much as $7 million for a fire station in north Brownsville, conditioned on the Tenaska-related rates remaining in place. A city commissioner interviewed during the investigation did not remember receiving that offer, and auditors did not find evidence in the city’s financial reports that the proposed transfer occurred.
The episode remains significant even without evidence that the money changed hands. It shows BPUB officials discussing the use of utility resources to preserve political support for rates attached to a failing project.
Investigators also concluded that BPUB designed a bill-reduction program partly to conceal the effect of the elevated base rates. The utility lowered fuel charges and used reserve funds to suppress the total amount appearing on customer bills, allowing officials to argue that residents were receiving relief without formally eliminating the underlying rate structure.
When city leaders considered reducing the rates, BPUB warned that doing so would diminish the city transfer and could force fuel charges upward.
The arrangement left Brownsville residents trapped inside an accounting circle. Their base rates remained elevated, the city received revenue tied to those rates, and BPUB used money already collected from customers to hold down other portions of the same customers’ bills.
Millions Flowed to Lawyers, Engineers and Consultants
Although the plant never broke ground, the project generated a substantial professional-services economy.
The independent accountant verified approximately $30.25 million in project expenditures. About $9.27 million had already been written off, largely for engineering, legal and other preliminary costs. The remaining recorded assets consisted primarily of pipeline rights of way and related property interests.
The forensic examination identified more than $25 million paid to the project’s largest vendors and consultants.
Davidson, Troilo, Ream & Garza received approximately $4.66 million. Willbros Engineers received about $3.73 million. Ambiotec Group received approximately $3.69 million. Black & Veatch received more than $2.16 million. Tetra Tech received about $2.15 million. The Yzaguirre Group received approximately $1.98 million.
Other major recipients included law firms, engineering companies, environmental consultants and right-of-way specialists.
The investigators reviewed a sample of vendor invoices and found that the payments had been approved under BPUB’s purchasing procedures. They did not identify evidence of payment fraud by those vendors.
The more serious findings concerned the necessity of the work, the length of time the contracts continued and the conflicts surrounding certain advisers.
The Consultants Advising Brownsville Had Their Own Interests
Max Yzaguirre, a former BPUB general manager, was retained as a consultant at $35,000 per month. His agreement did not require detailed timesheets. His role was described broadly as serving as independent eyes and ears for the board.
During the period in which BPUB was paying him, Yzaguirre also performed work for Tenaska.
The forensic examination found that relationship created a conflict. A consultant expected to protect Brownsville’s interests was simultaneously connected to the private company seeking to complete the deal.
The report also examined Black & Veatch, which participated in evaluating whether the Tenaska project should proceed, received subsequent BPUB work connected to the project and maintained separate relationships with Tenaska.
Investigators concluded that the firm’s competing roles undermined the independence of the advice Brownsville received.
The legal spending raised additional questions.
The forensic report calculated approximately $9.2 million in project-related legal fees. The Davidson, Troilo firm received nearly $4.7 million. Attorney Eddie Treviño Jr., who later became Cameron County judge, received approximately $1.92 million between April 2013 and June 2018, with roughly $1.28 million identified as Tenaska-related.
Investigators said they could not determine why Treviño had been so heavily involved in the project. They also identified concerns arising from his elected county position and professional work involving BPUB.
The report did not conclude that Treviño committed fraud or that the legal invoices were fabricated. It documented a public project surrounded by overlapping political, legal and financial relationships that were inadequately explained to ratepayers.
The Money Can Be Traced More Easily Than the Responsibility
Once the forensic report became public in September 2022, BPUB began adopting reforms.
The board placed longtime general manager John Bruciak on administrative leave on Oct. 17, 2022. He later retired. BPUB rolled electric rates back by approximately 22 percent, commissioned the independent accounting review, moved board meetings to a later hour and announced plans to provide greater public access through livestreaming.
BPUB also cautioned that the forensic examination could contain factual errors and argued that people criticized in the document should have an opportunity to respond. The utility promised to review the findings and consider structural and personnel changes.
The city government issued its own official response to the forensic findings, saying the examination had exposed concerning errors, omissions and potential misrepresentations. City officials promised further action and additional public updates as information became available.
The most visible financial response came in 2023.
Brownsville approved the distribution of the $29 million Tenaska Equity Fund, along with accumulated interest. The total refund pool reached approximately $31.36 million.
Under the refund plan published by BPUB, approximately 62,794 residential customers and 8,208 commercial customers were eligible based on their electricity use between April 2013 and September 2016. Active accounts also received an additional fixed credit of $48.91, funded through allocations that BPUB and the city agreed to forgo.
BPUB also calculated that about $74.3 million from the Tenaska-designated collections had already been returned indirectly through lower bills between 2017 and 2022.
That money was part of a much larger stabilization program. The independent accounting found that BPUB used approximately $261.3 million from several sources to subsidize customer bills, including Tenaska collections, other BPUB surplus funds and revenue associated with the 2021 winter storm.
Residents therefore received substantial money back, both through direct refunds and earlier bill reductions. The repayments addressed the financial burden. They did not determine who was responsible for the conduct described in the forensic report.
A Referral With No Publicly Documented Ending
The forensic investigators recommended that their report be forwarded to the appropriate authorities for review.
That recommendation was unusually serious. The report did not merely describe bad forecasting or a failed business venture. It alleged intentional misrepresentation, manipulated planning documents, concealed information and continued land acquisition under false pretenses.
As of July 2026, a review of the city’s publicly posted auditor reports does not reveal a comprehensive follow-up explaining:
- Which law-enforcement or regulatory authorities received the forensic report.
- Whether any agency opened a civil or criminal investigation.
- Whether any claims were pursued against former officials, attorneys, consultants or contractors.
- Whether the city attempted to recover professional fees.
- Whether ethics complaints were filed or resolved.
- Whether the city received independent appraisals of the remaining easements.
- How the 124 acquired parcels are currently being used.
- Whether any official disciplinary action occurred beyond Bruciak’s leave and retirement.
The city has posted a limited follow-up examining the right-of-way acquisitions, but that report addressed a narrow assignment. It did not resolve the forensic examination’s broader allegations or explain what happened after the recommendation for referral.
The absence of a public report does not prove that no agency reviewed the matter. Investigations can occur without public announcements, and attorney-client restrictions may prevent the release of certain communications.
Brownsville officials nevertheless promised the public updates. More than three years after the forensic examination, the city’s posted record still lacks a final account of institutional consequences.
A Failed Project Is One Thing. Concealing Its Failure Is Another.
Energy projects fail. Demand forecasts change. Natural-gas prices shift. Renewable energy becomes less expensive. A proposal that appears rational in 2012 can become impractical five years later.
Brownsville’s failure was not simply choosing a project that market conditions eventually defeated.
The city’s own forensic investigators found that officials used distorted assumptions to advance the project, concealed contrary information, maintained rate increases after the plant had effectively collapsed and continued pursuing land while property owners remained unaware of the project’s internal condition.
Brownsville’s financial relationship with BPUB made the problem worse. The city approved utility rates while receiving a percentage of the resulting revenue. Consultants charged with evaluating the project maintained relationships with parties positioned to benefit from its continuation. Professional fees continued accumulating as the prospect of construction disappeared.
The refunds returned money. The rate rollback reduced the future burden. New accounting controls and more accessible meetings may make another failure harder to conceal.
Those remedies do not answer the central questions left by the forensic examination.
Who authorized the continued public silence after November 2017? Who approved condemnation proceedings after the plant was internally understood to be dead? Why did professional contracts remain active? Where was the forensic report referred? What did the reviewing authorities conclude? Did anyone face consequences proportionate to the findings?
Brownsville residents know the amount collected under the Tenaska rate increases: $114,809,414. They know the plant produced no electricity because it was never built. They know land was condemned, consultants were paid and the city collected more than $11 million through its revenue transfer.
What they still do not know is whether Brownsville’s government ever completed the final and most important part of the investigation: holding anyone accountable.