District Court Judge Scott Jenkins granted LCRA’s Motion for Partial Summary Judgment in its ongoing dispute with Central Texas Electric Cooperative (CTEC) about the termination of a long-standing wholesale power agreement.
CTEC terminated its Wholesale Power Agreement (WPA) with the Lower Colorado River Authority (LCRA) in September, citing multiple grounds. The summary judgment order addressed only a specific question about a single clause, and will ultimately be challengeable on appeal if necessary. Separate grounds for the termination remain before the Court and are supported by substantial evidence.
“This is a complicated case, and we anticipated ups and downs,” said CTEC’s General Manager, Bob Loth. “This ruling doesn’t really address the big picture of what we are trying to accomplish. We have multiple paths to a favorable outcome in this case, and this ruling only addressed one of them.”
In 1987, CTEC and LCRA entered into the WPA wherein LCRA promised to deliver, and CTEC promised to buy, CTEC’s full power supply through June 25, 2016. In 2011, LCRA wholesale electric customers made the decision whether or not to renew the WPA through 2041, as required by the WPA. CTEC decided to purchase power on the wholesale energy market and declined to sign the extension.
Those parties that did sign the extension are able to obtain a significant portion of their electricity on the ERCOT market, while CTEC is not. CTEC felt that terminating the contract was necessary given the circumstances.
According to Loth, “CTEC is confident that, after a full trial, the Courts will find that CTEC’s termination of the Wholesale Power Agreement was justified and will uphold our efforts to deliver reliable electric service at the lowest possible rates.”