Posted: Fri, 9 Sep 2011 09:49 AM - 15,173 Readers

By: Taylor Short

The proposed contract requests the use of 25,400 acre-feet—about 8.3 billion gallons—of water from the Highland Lakes annually, though LCRA officials canceled the Aug. 10 vote on the contract after changes were made that could not be recommended, LCRA General Manager Becky Motal said.

While LCRA Spokeswoman Clara Tuma reiterated that a decision on the project is “postponed indefinitely,” project COO Randy Bird said White Stallion will continue to be built.

The proposed plant, located on 1,200 acres in Bay City, would use coal from the Illinois Basin to produce low-cost power to generate electricity for about 650,000 homes. The project would take about four years to build at a cost of about $2.5 billion.

White Stallion developers originally asked the LCRA for 25,400 acre-feet of water—more than 8.2 billion gallons each year. The company would pay $250,000 annually in water use and reservation fees in addition to the up-front payment of $55 million, to be paid within one year of the signed contract.

Attorneys for White Stallion requested changes to the contract Aug. 1, which would give the company more time to pay the $55 million and reduces the water reservation fees.

“The requested changes delivered to us [Aug. 1] would substantially change the earlier proposal,” Motal said in a statement. “Staff cannot recommend these changes to the board.”

White Stallion must close on the construction financing before being able to pay the up-front costs, Bird said, and attorneys for both entities are planning to meet soon.

Several entities have come out against the project, including business organizations and local politicians.

State Sen. Troy Fraser, R-Horseshoe Bay, argued that with current drought conditions, no water should be released now.

“I am not opposed to building White Stallion, but I am opposed to the release of any water from the Highland Lakes that would be needed to satisfy this new contract,” he said in a letter to LCRA Chairman Timothy Timmerman.

President Laura Mitchell and Chairman Steve Zbranek of the Lake Travis Chamber of Commerce opposed the project with a resolution warning against the volume of water requested and pollutants from burning coal at the plant.

Travis County, the chamber and several other cities and entities that depend on the lakes are set to release a study this month of the lakes’ influence on local businesses and real estate. The chamber’s resolution states that elevated levels in Lake Travis stimulate more jobs and revenue for the region than new power plants.

Travis County Commissioner Karen Huber, citing the study, said the project organizers should consider this economic impact before moving forward.

“That’s what took us so long to get through this contract,” Bird said. “The $55 million is for downriver reservoirs, so the only water that we will take is rain that has fallen below the dams.”

Bird said once a water contract is completed, the next move is to sell the electricity during a time when the state is in need of more, cheaper power.

“We’re in discussions with several utilities that are very interested in keeping their power rates low,” he said. “We’re going to have very competitively priced power coming out of this plant.”