LCRA CONTINUES TO EXPLORE
REPLACING FERGUSON POWER PLANT

LCRA continues to study the feasibility of replacing its aging Thomas C. Ferguson Power Plant near Marble Falls with a new, more efficient power plant.

Currently, staff is preparing a request for proposals to solicit prices from potential engineering, procurement, construction contractors to build the new plant. Under an engineering, procurement, construction contract, LCRA would hire a single contractor to design the new power plant, procure all necessary equipment and materials, and build the power plant to LCRA's specifications. This type of contract streamlines the design and construction processes and reduces LCRA's risks of cost and schedule overruns. LCRA expects to issue the request for proposals in late October.

"Our initial analysis shows that it makes good business sense to replace Ferguson," said Michael McCluskey, manager of LCRA Generation Resource Development. "But this project is not a done deal. The proposals will provide us with firm costs that will help us decide whether to proceed."

Preliminary evaluations indicate that replacing the 36-year-old Ferguson unit will help LCRA better manage wholesale power costs over the long-term because a new, combined-cycle generation facility will be about 35 to 40 percent more efficient. That means it will use 35 to 40 percent less natural gas to produce the same amount of electricity as the existing plant. The new facility also would be a more reliable power source and would have improved environmental controls.

LCRA began the year-long evaluation in April 2010. About 70 residents, elected officials and media representatives attended open houses hosted by LCRA in May and June to inform the public about the possibility of replacing Ferguson.

"We are on track to take a recommendation to the LCRA Board of Directors in spring 2011," said McCluskey. "If the Board decides to proceed with the project, we will work closely with the surrounding communities to coordinate construction activities and minimize impacts to area residents to the extent possible."

Frequently asked questions
Here are answers to three frequently asked questions about the Ferguson Replacement Study. For more questions and answers, visit the project Web page.

Q: Will this project require new transmission lines or towers?
A: Based on initial studies, LCRA expects that Ferguson's existing transmission infrastructure is adequate to support a new, combined-cycle unit at the same site. ERCOT may determine that existing transmission facilities need to be upgraded to support the new power plant; however, this would not require new transmission pathways.

Q: Will this project relieve the need for CREZ transmission lines in the Hill Country area?
A: No, replacing Ferguson with a more efficient power plant will not relieve the need for new transmission, such as CREZ lines, to bring power from other new and future generation resources to the Hill Country area.

Q: Would the new power plant be louder or quieter than Ferguson
A: As part of the project specifications, LCRA will require the contractor to build a power plant that will not exceed current operational sound levels of the Ferguson facility. However, a new, combined-cycle power plant likely will operate more often than Ferguson does today.

In the coming weeks, LCRA will update the frequently asked questions posted on the project's website to include answers to questions staff received at the open houses. In the meantime, more detailed information about the project is available online.