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CTEC Expected LCRA's Action in Breach of Contract Dispute
Cooperative Disappointed LCRA Did Not Offer to Negotiate a Cure
Wednesday, July 25, 2012 • Posted July 25, 2012

July 20, 2012, FREDERICKSBURG, TX – Central Texas Electric Cooperative (CTEC) acknowledged LCRA’s legal maneuvers made Wednesday regarding a dispute over the Wholesale Power Agreement (WPA). LCRA filed a petition in State Court in Travis County on July 18, without any offer to resolve the issue with CTEC and the other LCRA customers that delivered a Notice of Breach of contract to LCRA recently.

“While LCRA’s actions are disappointing, they were expected,” said CTEC General Manager and CEO Bob Loth. “CTEC stands by its claim. We are not in the habit of filing lawsuits and we haven’t in this case. Although LCRA’s actions are not a surprise, we are disappointed that once again LCRA has refused to negotiate, mitigate, or cure this breach, and rather has opted to initiate a lawsuit. We will now look to the courts for progress that we have not seen after repeated attempts to engage LCRA on this issue.”

LCRA has claimed that there has been no breach of contract or discrimination between wholesale customers. CTEC and six other LCRA customers take the position that the Wholesale Power Agreement, signed in 1987, guarantees uniform rates and pricing alternatives for all wholesale customers for the duration of the contract.

Last year, CTEC declined to extend the WPA through 2041, choosing instead to secure competitive power contracts on the open wholesale market after the WPA expires in 2016. Since this decision, LCRA has knowingly offered flexible pricing options to those customers that chose to sign the contract extension, but has not provided this access to those systems that did not extend the power contract beyond 2016.

For months, CTEC has been trying to come to the best possible out-of-court agreement for its members, but LCRA has refused to offer meaningful solutions.

“We would like to see this resolved out of Court” said Loth, “but LCRA has decided to go straight to the courthouse. We are confident that the facts are on our side and that we will ultimately prevail.”

The hearing on the temporary restraining order is scheduled be held at 10:00 am on July 24, 2012 before the Honorable Judge Jenkins at the Travis County Courthouse. The seven LCRA customers filing the Breach on June 28 include CTEC, Fayette Electric Co-op, City of Boerne, Kerrville Public Utilities Board, City of Seguin, City of Georgetown, and San Bernard Electric Co-op.

For more information on this story, please contact Bob Loth at 830.997.2126.

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