LCRA and Utilities Fight Over Contracts

River authority could lose half of its electric revenues

LCRA GM Becky Motal throws down the gauntlet.
LCRA GM Becky Motal throws down the gauntlet. (Photo by Jana Birchum)

This summer, the Lower Colorado River Authority has seen the costly departure of some of its wholesale electric power customers complicated by a dispute over the way it treated seven of those utilities on their way out the door.

The story goes back to a decision by 10 of those utilities not to extend their contracts past their 2016 expirations. With that news came an internal memo written by LCRA General Manager Becky Motal that read, in part, "electric revenues, which make up approximately 72 percent of LCRA's overall revenue, could drop by as much as 50 percent when the current electric contracts expire in 2016."

By June of this year, seven of the soon-to-be-former LCRA wholesale electric customers were ready to leave more quickly. Collectively, they suggested that, in the wake of their departure announcements, they had been punished by LCRA with (according to a letter from one of the parties involved) "punitive rates." Pricing, argued the seven rogue outfits, had become less fair when compared to the utilities that had agreed to continue their relationships with LCRA – under agreements renewed through 2041. As such, the departing utilities – the Fayette Electric Cooper­at­ive, Central Texas Elec­tric Cooperat­ive, and San Bernard Electric Cooperat­ive, as well as organizations in George­town, Boerne, Seguin, and Kerrville – declared that LCRA had breached their respective contracts, and declared their intent to sever their relationships this year.

LCRA sought a temporary injunction against the utilities that would have prevented their departure, but withdrew that request on Aug. 27. When asked about the situation, LCRA spokeswoman Clara Tuma referred me to an Aug. 30 release penned by Motal. Under the tsk-tsk headline "LCRA Power Customers Should Honor Their Contracts," Motal wrote that "despite various court actions and the pronouncements that followed, the heart of the matter is pretty simple."

She wrote that LCRA had "significant financial investments" in its contracts with the 10 departing utilities, and had expected them "to be followed for their duration." Motal explained that withdrawing the request for a temporary injunction reflected a decision "to pursue a permanent solution, not a temporary one" and that though "several other matters of venue and jurisdiction with some customers are being decided ... the basic question of breach of contract is still pending." She also touched on the rate dispute: "Every­one should know that LCRA has adopted the same rates for all 43 wholesale power customers," she wrote.

City of Georgetown spokesman Keith Hutch­inson stuck to his guns. "Since we notified them that we were not going to renew [our contract], we feel like we were treated unfairly," he said, adding that Georgetown Utility Systems "will be seeking other power suppliers" as of Sept. 13. Seguin Mayor Betty Ann Matthies expressed similar sentiments, telling the Seguin Gazette that the departing utilities "do not currently have the same opportunity [as other customers] to take advantage of favorable pricing in the wholesale power market."

Late Friday, the Statesman reported that a district judge ruled that the LCRA could sue the city of Georgetown over the matter. It doesn't appear either side is ready to walk away quietly.

Got something to say on the subject? Send a letter to the editor.

A note to readers: Bold and uncensored, The Austin Chronicle has been Austin’s independent news source for over 40 years, expressing the community’s political and environmental concerns and supporting its active cultural scene. Now more than ever, we need your support to continue supplying Austin with independent, free press. If real news is important to you, please consider making a donation of $5, $10 or whatever you can afford, to help keep our journalism on stands.

Support the Chronicle  

More Lower Colorado River Authority
LCRA Wins One
LCRA Wins One
A judge has ruled that LCRA didn't breach its contract with wholesale rates

Mike Kanin, Feb. 1, 2013

Clear as Smoke: LCRA May Face Lawsuit Over Fayette Emissions
Clear as Smoke: LCRA May Face Lawsuit Over Fayette Emissions
Environmental groups threaten lawsuit over emissions at Fayette

Nora Ankrum, June 29, 2012

More by Mike Kanin
Council-Staff Tension Spills Over in Budget Talks
Council-Staff Tension Spills Over in Budget Talks
Spelman and Martinez drill staffers over cost projections and turnover

Aug. 30, 2013

Gómez Pushes Road Plan Near Racetrack
Gómez Pushes Road Plan Near Racetrack
Commissioner says she's concerned about access and safety issues in her precinct

Aug. 30, 2013


Lower Colorado River Authority, LCRA, Becky Motal, rates, rate increase, electric rates, utilities, Georgetown

One click gets you all the newsletters listed below

Breaking news, arts coverage, and daily events

Keep up with happenings around town

Kevin Curtin's bimonthly cannabis musings

Austin's queerest news and events

Eric Goodman's Austin FC column, other soccer news

Information is power. Support the free press, so we can support Austin.   Support the Chronicle