Lubbock-based corp sues local taxpayers - KCBD NewsChannel 11 Lubbock

Lubbock-based corp sues local taxpayers

LUBBOCK, TX (KCBD) -

A Lubbock-based corporation is, in a sense, suing everyone in Lubbock, Brownfield, Floydada and Tulia.  The company is not trying to get money but rather it wants a court ruling.

The High Plains Diversified Energy Corporation filed a lawsuit last week seeking a declaration by Judge Les Hatch that it can take on public debt.

Lubbock, Brownfield, Floydada and Tulia created the West Texas Municipal Power Agency more than 20 years ago.  Then, just in the past few years, WTMPA created the High Plains Diversified Energy Corporation.

HPDEC's job is to build or buy sources of power for the four cities.  To do that, it wants to the right to borrow up to $1.5 billion dollars in the form of municipal bonds; a favorable court ruling would confirm its right to do so.  

Does that mean taxpayers could be on the hook for up to $1.5 billion?  It depends on how the bonds are structured.  They could be backed by the full faith and credit of taxpayers or they could be backed by nothing more than the revenues of two power plants the HPDEC plans to buy. 

Court records indicate that HPDEC and a private company called Republic Power will buy two power plants in Odessa.  They will then try to upgrade and use existing electric transmission lines get power back to the four cities.  Prior statements by HPDEC indicate it would buy the power plants for a combined $520 million.   

The judge has set a May 9th hearing.  In theory any citizen of Lubbock, Brownfield, Floydada and Tulia can respond to the lawsuit.

 Copyright 2011 KCBD NewsChannel 11. All rights reserved.

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