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Section A: General News


LCRA stands by power contract




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October 3, 2012 | 1,017 views | Post a comment

The Lower Colorado River Authority (LCRA) continues to stand by its wholesale power agreements with customers and said it would aggressively defend them in court.

On Sept. 26, the LCRA received a notice of breach from the Guadalupe Valley Electric Cooperative (GVEC), which alleges the River Authority broke its contract with GVEC by offering a lower price to some other long-term customers. In the letter, the Cooperative said it would give notice of termination of the contract and assert other possible claims against the River Authority in 30 days if the so-called breach is not cured. The LCRA will respond to the notice and reaffirm its position that no breach has occurred. GVEC has no right to unilaterally terminate the contract. The LCRA charges the same rate to all its customers and will defend the contract in court, if necessary.

The notice from GVEC follows similar notices from seven other LCRA wholesale power customers in June. Those customers are the cities of Boerne, Seguin, and Georgetown, the Kerrville Public Utility Board, Central Texas Electric Cooperative, Fayette Electric Cooperative, and San Bernard Electric Cooperative.

LCRA has asked a judge to rule that the contracts should be honored. Those disputes are now pending in state district courts.

Last year, 33 utilities extended their long-term power contracts with the River Authority until 2041. However, 10 wholesale power customers -- including the eight who contend breach of contract -- did not take the opportunity to renew their contracts beyond June 2016. In the renewed contracts, the long-term customers were granted the option to purchase a portion of their load from other power providers.

The customers who are making this claim did not take that opportunity.
 

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