The Lower Colorado River Authority has dropped its temporary injunction request in Travis County District Court that would have temporarily stopped seven electric wholesale customers, including the City of Georgetown, from terminating their power contracts.
"LCRA has said from the beginning that we have not breached our customer contracts and that we are fully prepared to continue honoring them until 2016,” LCRA General Manager Becky Motal said in a statement. “We stand by that today. The customers' declared intention to terminate the contracts has forced us to proceed directly to our own suits for wrongful termination, a customer breach. What we have been after in this legal dispute is our day in court. Today’s action doesn’t change that. Our commitment is to a permanent solution, not a temporary one. These contracts should be enforced.”
The city and the other electric utilities notified LCRA on Aug. 13 and Aug. 15 that they would be terminating their agreements.
In June, the city sent a breach of contract notice to LCRA alleging that the authority charged higher rates to electric utility to customers that did not extend wholesale power agreements, according to a news release from the city. City Council gave notice to LCRA in June 2011 that it would not extend its agreement with LCRA past 2016.
The notice gave LCRA 30 days to fix the breach, Assistant City Manager Jim Briggs said. LCRA officials responded with a lawsuit filed in Travis County District Court.
Although the court will no longer consider the temporary injunction request, the judge will be asked to determine if the court has jurisdiction over the case. If jurisdiction is determined, Briggs said the utilities would like to see the hearing moved out of Travis County.
Briggs said a ruling regarding the court's jurisdiction on the matter could be handed down by Aug. 29. An appeal by either side is expected depending on the final decision.
“I would expect this to go on for months, if not years,” he said. “This is a high-stakes poker game. This is not a simple small claim that we go and there is a decision and we are done. This will linger through the court system for a while.”
Georgetown City Council is expected to hear an update on the case at its Aug. 28 meeting in executive session, Briggs said.
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