STAFF AND SUBMITTED REPORTS
The city of San Marcos plans to invest an estimated $18 million to buy 3.52 percent of a natural gas- and steam-powered electric power generation plant being built by the Lower Colorado River Authority.
On Tuesday, the San Marcos City Council approved a letter of intent to participate as a minority partner in LCRA’s new Thomas C. Ferguson power plant, which is expected to cost $520 to $540 million to build on Lake LBJ near Marble Falls. The new Ferguson plant will replace a 37-year-old unit of the same name. It is expected to be online by mid-2014.
“Our approval of the Letter of Intent authorizes City Manager Jim Nuse to negotiate with the LCRA on a participation agreement that will define the terms of our partnership,” Mayor Daniel Guerrero said. “The final pact will be brought back to the City Council for approval later this year.”
A 30-year contract committing the city-owned San Marcos Electric Utility to purchase wholesale power from LCRA also gives the city the option to buy in to new generation facilities up to the percentage of capacity San Marcos homes and businesses will use.
“Participating in this project will help us maintain stable and competitively priced power costs over the long term, benefiting our customers,” said Tom Taggart, whose position as Public Services Executive Director puts him in charge of the city’s electric, water/wastewater and drainage utilities.
The new Ferguson plant will be replaced at its current location at Horseshoe Bay on Lake LBJ. The plant will be a combined cycle plant which uses a gas turbine system and a steam-cycle system to generate electricity. A combined cycle power plant uses about 35 percent less fuel than a traditional natural gas-fired plant.
LCRA serves 55 counties in Central Texas, providing wholesale power to cities, electric cooperatives and other wholesale customers.
LCRA has supplied electric power to San Marcos since the 1930s, with LCRA also operating the system until 1986 when voters approved the city’s purchase of the local retail distribution system. The city is also contractually entitled to buy up to 35 percent of its power from sources other than LCRA. In March, the city council approved a contract to start buying power from Florida-based NextEra Energy Inc., which owns wind farms and natural gas-fueled generation plans in west and east Texas.
If the Ferguson plant participation agreement is approved, this will be the city’s first entry into a power generation project. The LCRA has contracted with Fluor Corporation for the Ferguson plant replacement project and broke ground in April 2012. The old plant on the site will be decommissioned after the new plant is completed.
Built in 1974, the plant was named for Thomas C. Ferguson, one of the original board members of the LCRA.