This comparison chart presented at last week’s public information session shows how San Marcos electric rates stack up against other local customers. Photo by Andy Sevilla. BY ANDY SEVILLA
After an initial public discussion at a March city council meeting that drew criticism from angry residents and a subsequent informational session geared to address concerns, the San Marcos City Council is expected to pass a 25-year energy contract with the Lower Colorado River Authority (LCRA) Tuesday night.
San Marcos residents were in uproar about the lack of available contract details, in addition to the intentions of the city an the LCRA to not make the contract public. The agreement between San Marcos and LCRA will be released only if the Texas Attorney General’s office orders disclosure.
San Marcos Director of Public Services Tom Taggart said last week at a public informational session that keeping the details of the contract confidential is vital to keeping LCRA a viable competitor in the marketplace. Taggart said privately owned businesses need not release details of contracts, and the Texas Legislature put forth provisions extending that same leverage to the publicly-owned LCRA in 1999.
Taggart said providing confidentiality “levels the playing field.”
Dan Kuehn, Executive Manager of Wholesale Power Services for LCRA, said releasing contractual information would “undermine competitive strategies,” thereby presenting unfair advantage to privately-owned energy retailers.
Though contract language is confidential, Taggart said, LCRA has provided San Marcos with low rates and in comparison to other cities, Taggart said San Marcos fares well, adding that he’s “very convinced” other retailers cannot provide electricity at a lower cost.
“We don’t believe we can get a better deal anywhere else,” Taggart said.
In 1999, the Texas Legislature allowed municipalities to deregulate and allow energy retailers to compete for business. But, in 2001, the San Marcos City Council passed a resolution aimed at staying regulated and in business with LCRA, according to City Attorney Michael Cosentino.
“The universal experience we’ve seen in Texas is that it’ll cost you more money (if you deregulate),” Taggart said. “ … That’s why this is something that city hasn’t sought. It just doesn’t make financial business sense for our citizens.”
Cost comparison statistics illustrate San Marcos receiving better energy rates than San Antonio, Seguin, Weimar, College Station, and Georgetown. San Marcos electric utility rates also are lower than those provided by electric co-operatives such as Bandera, Central Texas, Fayette, Bluebonnet, San Bernard and Pedernales. However, San Marcians pay higher rates than Greenville, Kerrville, New Braunfels, Fredericksburg, and (barely) Austin.
Greenville, Austin, San Antonio and College Station are not LCRA customers.
“We’re in a much better position, in comparison to other cities, to attract businesses that use power, because of our lower rates,” Taggart said.
The statistics prove that LCRA provides San Marcos with the lowest cost, Taggart said, but the city will not shy away from discussions with other retailers.
Among the provisions in the contract between San Marcos and LCRA:
* San Marcos is allowed to purchase up to 35 percent of its power from other sources, which is an increase from the existing 10 percent,
* Future renewable resources and environmental stewardship are emphasized,
* The city is allowed to purchase power from alternative or renewable power sources,
* Peak demand reduction and conservation programs are incentivized, and
* Smart grid technology and distributed generation are supported.
LCRA would financially reward San Marcos for savings from efficiency and rebate programs, and any LCRA acquisition of facilities within San Marcos would not result in loss of property tax revenue for the city. LCRA also has agreed to not purchase the Hays Energy Power Plant, and language is included for any future generation sites.
The power agreement in place is set to expire on June 25, 2016. A five-year lead time for the extension or denial of extension is required in the contract to allow adequate resource planning time for future LCRA generation facilities.
The 25-year extension, if passed by council, would require that LCRA deliver electricity to San Marcos through 2041.
LCRA has provided electric service to the City of San Marcos since 1939. The city purchased the electric distribution system from LCRA in 1986 and assumed full operational duties in 1991.
LCRA has a total of 43 customers, including San Marcos. LCRA’s power generation portfolio includes two traditional natural gas-fired power plants, one coal-fired plant, a combined-cycle gas-fired plant, six hydroelectric dams and long-term purchase contracts from three West Texas wind farms.Email | Print