State committee questions review of Texas Energy Fund applications
AUSTIN, Texas - The job for members of a joint Texas House and Senate committee is to monitor a special loan program called the Texas Energy Fund.
The program was created to spur the construction of new natural gas power plants in Texas. The 72 applications that came in were screened by a contractor with the Public Utility Commission of Texas (PUCT) and a big problem with that review was the main topic on Tuesday.
State Sen. Charles Schwertner (R-Georgetown), who co-chairs the joint committee with state Rep. Davis Spiller (R-Jacksboro), set a hard tone at the beginning of the hearing.
"Recent information about the TEF application screening process revealed problems with the administration of the program," said Sen Schwertner.
Seventeen applicants made the initial cut for the special loan program. Among them was a proposal from two companies, NextEra and Aegle Power. The team-up would push nearly 1300 gigawatts of electricity into the Texas power grid.
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However, on Tuesday morning, Mitchell Ross, a VP with NextEra, told committee members there was never a deal, and they never should have been on the list.
"The May 28th letter that was submitted with Aegle’s TEF application is a fraudulent letter that no one at NextEra reviewed, approved or signed," said Ross.
According to documents from the PUC, Aegle Power indicated they had a signed equity commitment from NextEra to proceed with the project.
"The statements made in that letter were, a number of the statements were false, that any commitment had been made or that members of NextEra’s, quote unquote board had reviewed the opportunity. That was categorically false," said Ross.
In September, the PUC took the partnership off the list after being notified by NextEra and after it was disclosed that Aegle's CEO Kathleen Smith had been convicted of fraud in 2017.
Committee members like state Rep. Todd Hunter (R-Corpus Christi) made it clear the proposal should never have made the initial list of 17. He pressed Ross on how he described the unauthorized use of the company name.
Officials with NextEra notified federal prosecutors about the unauthorized use of their name, and the state Attorney General's Office indicated there's also a state investigation.
Representatives from Deloitte, the company hired by the PUC to review loan applicants, also testified. They admitted a mistake was made, but they told the committee no final loan approvals have been made yet, and said they still deserve to be paid for the work they're doing.
The Committee was told that Deloitte has multiple consulting contracts with different state agencies totaling about $250 million. The work for the PUC is a four-year contract and, according to company officials, is worth about $74 million.