Contract Between Texas Tech, LP&L Made Public

The contract between Texas Tech University and LP&L, outlining how Texas Tech will be charged for electricity usage, has been made public.
By Monica Yantosh

LUBBOCK, TX -- The contract between Texas Tech University and LP&L, which outlines how Texas Tech will be charged for electricity, has been made public.

KLBK obtained a copy of this contract through an open records request to Texas Tech.  In an email Wednesday, Jim Jrunjes, the Chief Financial Officer for the Texas Tech University System, explained why the contract was originally kept private. "Texas Tech never had a problem with the contract being made public. In 2004, LP&L was a competitive environment and wanted the competitive issues in the contract to be kept private," Brunjes wrote.

The contract was written back in 2004, and has been discussed recently because it was up for renewal. In it, the energy charge is listed at 1.4 centers per kilowatt hour.

Texas Tech had the option of being going with a 20% discount on LP&L's base rate, according to state law. Instead, this contract was written.

According to Lubbock attorney and Electric Utility Board member Charles Dunn, this contract, instead, gives Texas Tech other benefits that go along with having such a low electricity rate.

"When you count the benefits in there that they wouldn't get from LP&L with this power contract, then they are actually paying less," Dunn said. "So it's a win-win sitaution, it's a good contract."

"It allows Texas Tech to get a very low rate, but at the same time it provides extra benefits to LP&L that we wouldn't get if Texas Tech made us go to the state discounted rate," Dunn said.

One benefit is Texas Tech being able to use the steam off of the Brandon Power station free of charge. Another is that if Texas Tech were to ever choose a different electric provider, they could use the LP&L power lines on campus for a fee of $350,000 a year.

There were questions raised during an EUB meeting at the end of 2013 about whether or not Texas Tech is being overcharged for electricity. If that were the case, Texas Tech has the ability to perform an audit and ask for a refund.

Brunjes, in an email Wednesday, said in regards to being asked if there were concerns Texas Tech was over paying, that "the contract ensures that Texas Tech will pay the lowest rate that LP&L charges its largest customers. The contract allows us to audit their charges and, if need be, receive the lower rate."

Dunn said that he believes this is actually a very good deal that Texas Tech put together in 2004.  Dunn, however, was not a member of the EUB at the time the contract was written. "In my opinion, as a lawyer, not as an EUB member, but as a lawyer, my opinion is Texas Tech negotiated a better contract for their end of it than the city of Lubbock got, yeah, that's just my opinion," Dunn said.

This contract was renewed by the EUB.
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