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Lubbock muni to buy 400 MW from Southwestern Public Service

Southwestern Public Service has agreed to sell 400 MW to Lubbock Power & Light as part of the municipal utility’s planned shift from the Southwest Power Pool to the Electric Reliability Council of Texas.

SPS, an Xcel Energy utility subsidiary, will sell the energy and capacity to LP&L for two years starting on June 1, 2019, when an all requirements contract between the utilities expires, the municipal utility said Thursday.

LP&L, the third largest municipal utility in Texas, has a peak load of about 605 MW.

To replace the all requirements contract, LP&L will acquire capacity and energy supply through a 170-MW partial-requirements wholesale contract signed with SPS in 2010. The utility also has a 100-MW wind contract through its membership of the West Texas Municipal Power Agency. In addition, LP&L owns 114 MW of capacity.

The two-year “transition” contract with SPS is designed to give LP&L time to evaluate its resource options.

With the shift to ERCOT, expected in 2019, LP&L expects to avoid the need to invest $350 million to $700 million in new generation. The move, however, requires transmission upgrades.

The Texas Public Utility Commission is reviewing LP&L’s plan to shift about 70% of its load to ERCOT. A series of studies are underway as ERCOT, SPP and LP&L assess the impact such a move would have on stakeholders in both power markets, according to the utility.

Read full article at Platts