City changes water, electric utilities

Water merger, wholesale power contract lawsuit under way

The City of Georgetown's utility systems saw several changes in 2012, with more under way for 2013, including an agreement with the Chisholm Trail Special Utility District to merge with the city's water utility and a legal battle with the Lower Colorado River Authority over wholesale electric power agreements.

Water consolidation

City officials are continuing to finalize a definitive agreement with the Chisholm Trail SUD to define the consolidation with the city's water utility and create a local government corporation, or LGC, to manage the utility.

City Council approved a memorandum of understanding Oct. 23 that outlined the terms of the agreement.

"We expect to have that agreement come back to City Council in late January or the first part of February," said Jim Briggs, Georgetown general manager of utilities. "Once the agreement is signed, the rest of 2013 would be spent filing documents with the Texas Commission on Environmental Quality."

Under the LGC, the city would operate the entire system, but the Chisholm Trail customers and Georgetown's customers would be financially separated because of the different levels of services and costs related to each customer base.

"It's going along as scheduled," Briggs said. "Operationally, the change will be slow and incremental because of some initial organizational and procedural things that need to be done."

Power struggle

Since June, the city has been in the middle of a dispute with LCRA over its wholesale power contract.

The city and seven other electric utilities notified LCRA on Aug. 13 and Aug. 15 that they would terminate their agreements after sending breach of contract notices alleging LCRA charged higher rates to electric utility customers that did not extend wholesale power agreements. City Council gave notice to LCRA in June 2011 that it would not extend its agreement with LCRA past 2016.

In September, a judge ruled LCRA could seek legal recourse and denied a request to move the case from Travis County to Williamson County.

"We are pleased to see that the judge ruled in our favor, and we look forward to having this matter resolved," LCRA General Manager Becky Motal said in a September statement. "I've said it before and I'll say it again: We believe these contracts are valid and should be enforced."

Briggs said the city has appealed the judge's ruling; however, he said he was not sure when a ruling by the appellate court would be handed down.

"Because we are a municipality, we should be exempt from carrying this issue," Briggs said.

Since terminating the contacts, the Georgetown Utility System has been purchasing wholesale power from several sources, including JP Morgan Commodities and American Electric Power, Briggs said.

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