LP&L, Xcel Energy sign 2 year power contract - KCBD NewsChannel 11 Lubbock

LP&L, Xcel Energy sign 2 year power contract

Information provided by Lubbock Power & Light

LUBBOCK (March 23, 2017) – Lubbock Power & Light (LP&L) and Southwestern Public Service (SPS), a wholly owned subsidiary of Xcel Energy, are pleased to announce the signing of a purchased power contract providing 400 megawatts of capacity and energy scheduling beginning on June 1, 2019 and extending through May 31, 2021.

The announcement comes after months of negotiations and more than a year of comprehensive research by LP&L management as they work to secure a seamless transition beyond the expiration of the current total requirements contract with SPS on May 31, 2019. 

"In September 2015, LP&L announced its intention to seek integration to the ERCOT market beyond the expiration of the total requirements contract with SPS in 2019, and since that time we have worked diligently to chart a course of seamless transition for our customers," said David McCalla, LP&L Director of Electric Utilities.  "The signing of the transition contract today with SPS is an important step in securing affordable and reliable power for our customers as we work toward achieving our long-term power supply goals."

Since June 1, 2004, LP&L has been a total requirements customer of SPS, meaning that 100 percent of the power provided to LP&L customers has been purchased from SPS through the West Texas Municipal Power Agency.  As approved by regulators, SPS’s contract with LP&L to provide total requirements wholesale service will expire on June 1, 2019.  To replace the total requirements service, LP&L will acquire capacity and energy supply through a 170-megawatt partial-requirements wholesale contract signed with SPS in 2010; a 100-megawatt wind contract through its membership with West Texas Municipal Power Agency; 114 megawatts of LP&L-owned generating plants; and the 400-megawatt transition contract signed today with SPS. 

"Lubbock is an important part of our regional economy and we want to ensure LP&L implements the most appropriate long-term solution.  We understand the long lead-times involved with electric utility planning and operations and the two-year transition agreement will give more time for LP&L to evaluate and implement its future resource options," said David Hudson, president – Xcel Energy New Mexico, Texas.

Lubbock is currently participating in a regulatory approval process with the Public Utility Commission of Texas in order to join the Electric Reliability Council of Texas (ERCOT).  If approved, Lubbock will transfer approximately 70 percent of its load to the ERCOT market.  A series of studies are currently underway as ERCOT, the Southwest Power Pool (SPP) and Lubbock seek to quantify the effects this potential move might have on stakeholders in both power markets.  

"Today marks an important milestone as the City of Lubbock works to secure power for our citizens for generations to come," said Dan Pope, Mayor of Lubbock.  "The long hours put in by LP&L leadership and the collaborative work by the Electric Utility Board and the Lubbock City Council have culminated in what we believe is a strong path forward.  We thank our partners at SPS for their work on this agreement and we are pleased to announce a stable and cost-effective source of power for LP&L customers while we work to join the majority of Texas as participants in the ERCOT market."

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