Judge kills $1.5 billion Lubbock power deal

A judge rules that officials cannot go forward with a $1.5 billion deal in the name of local taxpayers in order to provide electricity to Lubbock and other cities starting in the year 2019.  The proposed deal was just as complicated as it was controversial.

Back in the 1980's Lubbock, Brownfield, Floydada and Tulia created the West Texas Municipal Power Agency, which has purchased wholesale electricity on behalf of Lubbock Power & Light along with the other three cities.  In 2008, WTMPA created the High Plains Diversified Energy Corporation and it was HPDEC that sought the high dollar power deal.

HPDEC filed a petition in State District Court, seeking a judge's approval to borrow more than $1.5 billion in the form of municipal bonds.  Once that news got out, Lubbock officials suddenly came out against the deal in full force.

Lubbock said in court records that local taxpayers might get stuck with the bill if anything went wrong with HPDEC's proposed purchase of two power plants in Odessa.

But Lubbock went a step further and said the WTMPA had no right to create HPDEC.  The judge on Tuesday afternoon agreed.  HPDEC can appeal but for the moment HPDEC does not legally exist and cannot take on debt in the name of local taxpayers.

While City Hall did get a victory in court, a larger problem exists long-term.  In the year 2019, Xcel Energy will, for the most part, stop selling power to the WTMPA.  That leaves Lubbock with a potentially massive shortfall of electric supply for its residents.

If the ruling stands, HPDEC is dead, but what will take its place by 2019 is yet to be decided.