Council to vote on LP&L marketing contract with Texas Tech

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Updated: 12/10/2013 5:51 am
It's an "I'll scratch your back, you scratch mine" kind of arrangement.

As part of LP&L's purchase power agreement with Texas Tech over the next six years, the utility has agreed to spend significant marketing dollars with the university. The Electric Utility Board has blessed this, but not every member was on board and now the deal goes to council for approval on Thursday.

The question is being asked, "Why does LP&L need to advertise if Texas Tech can't get its power from anywhere else?" EUB member, Charles Dunn, is one just one person asking that very question.

"They would have to build their own lines or else rent ours. That's really not practical," he said.

Matt Rose, who handles communications for LP&L said this is not really advertising.

"Commonly this has been termed as an advertising agreement," he explained. "But more correctly it's really a marketing and educational agreement."

He said LP&L would be promoting three important messages to customers: conservation, energy efficiency, and promoting Project Helping Hands, which helps low income customers.

"We think that being able to openly communicate through all of these different avenues are going to help us spread that message and get everybody ready for this upcoming summer," Rose said.

"When we pay money, we have to get that back from the rate payers," Dunn said. "So, I don't believe this is something we need to be doing. It doesn't make good business sense."

Tech administrators can make the argument that the university is paying a rate that is more expensive than what the state regulates. Without the marketing addendum, Tech could fall back to the regulation default rate and LP&L would lose money. Dunn thinks LP&L has more to lose advertising with Tech.

"That doesn't justify the $825,000 expenditure that Tech wants us to make for athletics in turn for approving this contract," he said.

Rose said spending the ratepayer dollars benefits everyone.

"There is a very real worth to what LP&L would be receiving from this marketing contract with Texas Tech University and both sides will see a very real value," Rose said.

If the purchase power agreement is approved, Tech will pay the same rate it has been paying for the past ten years.

Mayor Glen Robertson doesn't see the point for this marketing expense. The mayor said he plans to vote against the contract and those pushing for its passage are going to have a difficult time explaining themselves.

"This is a tough situation for the people voting for it because it's an addendum to a contract. They've got some valid reasons for wanting to vote for this contract that tie into the purchase power agreement," he said. "But there's a confidentiality clause that restricts them from being able to justify their vote. It's easy for me to sit up on the dias and vote against this. It's going to be difficult for those who feel like they need to pass it."

If the Council passes the agreement Thursday, it then heads to the Tech Board of Regents for approval.
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