TRA pursues federal permit to generate hydropower at Lake Livingston

LIVINGSTON, Texas, July 18, 2001 — The Federal Energy Regulatory Commission has issued a Notice of Application by Trinity River Authority for a preliminary permit to generate hydropower at Lake Livingston Dam.

It is expected that the Commission will issue the actual preliminary permit to TRA by late September 2001.

TRA is investigating a hydropower development in cooperation with the East Texas Electric Cooperative (ETEC), a large regional generating and transmission entity. ETEC serves ten electric cooperatives in a large east Texas area and is acting on behalf of those entities.

Should it prove feasible, TRA anticipates developing a generating facility with a rated capacity of 50 megawatts. It is estimated that this facility will be capable of producing an average 178 million kilowatt-hours of power on an annual basis, enough power to support a population of approximately 25,000 people.

The ETEC membership includes Upshur Rural, Panola-Harrison, Bowie-Cass, Wood County, Rusk County, Deep East, Cherokee County, Houston County, Sam Houston and Jasper-Newton electric power cooperatives.

It is anticipated that TRA's request for a preliminary permit will take precedence over a competing permit application filed by Symbiotics, LLC, a private enterprise operating out of Rigby, Idaho.

Federal law allows parties other than the owner and operator of a potential hydropower source to apply for permits and develop hydropower projects. When the preliminary permit is issued to TRA, the site would be protected from development by other interests for a three-year period.

TRA had previously pursued a hydropower project at Lake Livingston in the 1970s and 1980s. A change in economic conditions, along with some federal rulings that might have compromised the original purpose of Lake Livingston as a water supply, caused TRA to surrender its hydropower license in February 1988.

Much of the work done during that period will be applicable to the current project. The preliminary permit will allow TRA and ETEC ample time to update the earlier work and prepare a formal license application to FERC.

The proposed project will promote the objectives of Senate Bill 7, a comprehensive electric industry restructuring law enacted by the Texas Legislature in 1999. In S.B. 7 the legislature declared its intent that 2,000 megawatts of new renewable generating capacity, including hydropower, be brought on-line in Texas by January 1, 2009.

To encourage the development of renewable energy sources, S.B. 7 establishes a renewable energy portfolio requirement for electric utilities participating in the State's retail competition program.

S.B. 7 also creates a renewable energy credit-trading program by which utilities lacking their own renewable generation can acquire credits to satisfy the portfolio standard. Hydropower generated at Lake Livingston is expected to be eligible for the credit-trading program.

TRA also anticipates using an "alternative" licensing process recently instituted by FERC. This will entail a high degree of pre-filing collaboration among the applicant, resource agencies, non-governmental stakeholders groups and the Commission staff.

This process should identify at an early stage any issues that could impair the feasibility of the hydropower project. It will also provide the best opportunity to resolve issues in a mutually satisfactory manner.

The estimated cost of all the required studies and planning is $5 million which will be funded by one or more of the East Texas electric cooperatives that are prospective purchasers of the power.

TRA plans to finance construction of the project through the sale of contract revenue bonds secured by a power sales contract with the cooperatives. The total cost of the project will not be known until the planning process is complete but is expected to exceed the $135 million that the earlier hydropower project would have cost. Design and construction of the project is expected to take 3.5 to 4 years to complete.

SOURCE: Trinity River Authority of Texas

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