White Stallion asks LCRA for more time on water contract; delays project
Aug. 3, 2011 at 3:03 a.m.
BAY CITY - A meeting to vote on whether White Stallion Energy Center would be granted a water contract by the Lower Colorado River Authority has been canceled.
On June 15, the LCRA board scheduled a special meeting for Aug. 10 to decide if the proposed coal plant would get its water contract.
This decision to cancel the board meeting came after attorneys for the proposed coal plant met on Monday with LCRA to request significant changes in the water contract.
"The requested changes delivered to us on Monday would substantially change the earlier proposal," said LCRA General Manager Becky Motal. "Staff cannot recommend these changes to the Board."
Discussion and possible action by the LCRA Board of Directors on a contract to provide water to a proposed new coal plant in Matagorda County will be postponed indefinitely, according to a news release from the LCRA.
In the proposed contract, White Stallion would have to pay the LCRA $55 million within one year of signing the water contract.
In the contract, the LCRA would provide 25,400 acre-feet of water a year to the plant.
"We were prepared to sign this contract in June, but now the market has changed and we are asking for more time to allow for our project financing to close before we can give the money," said Randy Bird, chief operating officer for White Stallion Energy Center.
Bird said they are being cautious, asking the board to consider some changes to the contract.
"We are just asking for more time, what if we pay the LCRA $55 million and it takes us longer than a year to close on the project," Bird asked.
Bird said they can't pay the $55 million until they close on the contract to begin construction.
In the June LCRA board meeting, Bird was asked by the board if White Stallion had the money available for the contract.
Bird answered they were prepared to pay, but not until they close financially on the project.
"We were prepared to pay if they voted on the contract for June 15, but if they delayed the vote, that may change," he said.
With the $55 million, LCRA intended to use that money on pumping plant improvements, an off-channel reservoir in the lower basin and a study to determine how to best configure future water supply enhancements.
White Stallion also agreed to pay the LCRA $250,000 per year from the date the plant starts up to the end of the contract. This money would be used for future water supply projects.
Bird said they planned on breaking ground at the end of the year, but with the re-negotiation of the water contract, that will be delayed.
"There will definitely be a delay depending on how fast we can negotiate the new contract," he said.
Bird said they will work with the LCRA until they can come back with a deal. They hope to be on the agenda for the next board meeting.