Updated: Water Deal for Proposed Coal Plant Postponed

Updated 2:30 p.m. 

In a victory for environmental groups, the LCRA board decided to delay the decision on whether to grant a large water contract to the proposed White Stallion coal plant. The board heard testimony all morning, much of it from people living in the Colorado River basin who cited concerns about water availability and air pollution, and urged further study of the proposed 40-year contract. White Stallion's chief operating officer, Randy Bird, testified that the water contract was one of two pieces critical to getting more permanent financing for the plant. (The other piece is the air permit, which also recently encountered a hitch.) The board will consider the issue again on Aug. 10. The decision to delay was unanimous, although one board member was out of town.

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A day after choosing a new general manager, the board of the Lower Colorado River Authority, the major water supplier for Central Texas, is meeting today to decide whether to grant a water contract to a proposed coal plant near Bay City.

Officials at the White Stallion Energy Center, the proposed $2.5 billion coal plant, could pay the LCRA $55 million to build a new reservoir to supply it — without, White Stallion officials say, harming the Highland Lakes, the reservoirs up the Colorado River whose levels have been dropping in the recent drought.

"The process we went through here was to try and have as little if any impact to other customers in the river," said Randy Bird, chief operating officer for White Stallion. "We've worked with LCRA for a year on this part of the process, and what we've tried to do is establish the fact that we don't want to take any water out of the Highland Lakes."

Coal-fired power plants, like nuclear or natural gas-fired power plants, need vast amounts of water for cooling down their systems.

Environmentalists oppose the LCRA contract, which has also sparked concern from other users of the LCRA's water, including rice farmers, and people who live near the Highland Lakes. A report released on Monday by the Sierra Club found that a water contract of the size of White Stallion "would affect water storage in Lakes Buchanan and Travis, especially during droughts."

"Entering into a big contract like this, to us, doesn't make sense," said Jennifer Walker, a water resources specialist with the Lone Star Chapter of the Sierra Club.

White Stallion hopes to break ground in late summer or early fall, and part of the plant would then be ready to provide electricity starting in June 2015, Bird said. The plant still needs additional permits, however, including a wastewater permit from the Texas Commission on Environmental Quality and a permit from the Army Corps of Engineers.

The TCEQ granted White Stallion a crucial air permit in December, but a Travis County judge recently ordered further review of the permit. 

Bird said he is studying the implications of the ruling. "We're still deciding what to do with that ruling," he said, adding that White Stallion retains its construction authority.