LCRA files suit to uphold wholesale power contract with City of Georgetown

The petition was filed in Travis County District Court in response to a breach of contract notice issued to LCRA on June 28 by seven utilities, including the City of Georgetown, Fayette Electric Cooperative Inc., Central Texas Electric Cooperative, the City of Seguin, Kerrville Public Utility Board, the City of Boerne and San Bernard Electric Cooperative Inc.

Georgetown City Council authorized the notice, alleging the authority charged higher rates to electric utility 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.

Representatives from LCRA deny the breach of contract claim.

“LCRA has honored these contracts since 1974 and intends to continue honoring them until they expire in 2016. We are asking these seven customers to do the same,” LCRA General Manager Becky Motal said in a statement. “There is no breach, and we are confident a judge will agree with us. If these customers are allowed to end their contracts four years early, rates for the other customers likely will go up. There’s no joy in heading to the courthouse to resolve these differences, but these seven customers have left us with few options. We have a responsibility to protect the interests of everyone we serve.”

According to the notice, LCRA has 30 days to fix the breach, Assistant City Manager Jim Briggs said in an interview June 29. If the contract resolution cannot be reached, Briggs said City Council, in executive session, could discuss further measures up to and including termination of the contract.

"This filing serves as our response," Motal said in a statement.

According to a news release from LCRA, the suit asks a judge to review the contracts and rule that LCRA continues to adhere to their terms. The suit also seeks a temporary restraining order to keep the seven utility customers from ending the contracts until the court rules on breach of contract issue.