08/04/07

English (US)   It Was a Billion Dollars  -  Categories: Utilities  -  Douglas @ 10:08:46 pm

Garland is responsible for 47% of the debt owed by the Texas Munipal Power Association (TMPA), which is owned by Garland, Denton, Greenville, and Bryan. The coal-fired plant near Bryan provides the majority of our electric power. Modifications to the plant accumulated debt of almost $2 billion by 2001. Garland's portion, because we take 47% of the power, was almost $1 billion. By the end of the year, our portion will have been paid down to $579,035,959.

 

The debt keeps rising over $2 million annually through 2008. Afterward, it remains relatively level, dropping some. Assuming no new major infrastructure changes to the Gibbons Creek Plant and no new debt, the debt will be paid by 2018. The table below is a few years old but should still be accurate.

 

There is no benefit or reason to paying the debt early. The interest remains fixed under the terms of the financing, so paying it off early would mean losing money. Dollars are constantly depreciating because of inflation so it's better to pay tomorrow with dollars that aren't worth as much as today's. Meanwhile, those dollars can be put to work or invested for a return.

 

Garland's portion of the debt is paid by GP&L ratepayers and is backed by the assets of the city.

 

The coincidence of the TMPA debt being paid by 2018 and the sales tax rebate incentives to the Town Center expectedly expiring the at same time makes 2018 a time to look forward to.

 

These are earlier posts on TMPA and GP&L: Chronology of TMPA & Garland and Council Chooses GP&L Will Not Opt-In to Deregulation.

 

OUTSTANDING TMPA DEBT
Year
Principal
Interest
Annual Total
Garland's Portion (47%)
Annual Increase
2002
58,540,000.00
38,598,125.00
97,138,125.00
45,654,918.75
  
2003
59,689,555.60
42,052,071.90
101,741,627.50
47,818,564.93
2,163,646.18
2004
51,339,943.20
55,001,756.80
106,341,700.00
49,980,599.00
2,162,034.08
2005
57,156,603.75
53,779,756.25
110,936,360.00
52,140,089.20
2,159,490.20
2006
63,477,512.25
52,055,227.75
115,532,740.00
54,300,387.80
2,160,298.60
2007
70,157,046.25
49,983,723.75
120,140,770.00
56,466,161.90
2,165,774.10
2008
77,635,854.40
47,105,743.10
124,741,597.50
58,628,550.83
2,162,388.93
2009
79,916,318.75
44,081,448.75
123,997,767.50
58,278,950.73
-349,600.10
2010
81,633,277.10
40,880,347.90
122,513,625.00
57,581,403.75
-697,546.97
2011
85,081,709.60
37,441,377.90
122,523,087.50
57,585,851.13
4,447.38
2012
88,953,704.80
33,852,995.20
122,806,700.00
57,719,149.00
133,297.88
2013
48,491,069.40
74,264,055.60
122,755,125.00
57,694,908.75
-24,240.25
2014
39,668,931.10
83,084,568.90
122,753,500.00
57,694,145.00
-763.75
2015
32,186,232.00
91,113,768.00
123,300,000.00
57,951,000.00
256,855.00
2016
30,294,810.00
93,005,190.00
123,300,000.00
57,951,000.00
0.00
2017
28,514,358.00
94,785,642.00
123,300,000.00
57,951,000.00
0.00
2018
0.00
0.00
0.00
0.00
  
Total
$952,736,926.20
$931,085,798.80
$1,883,822,725.00
$885,396,680.75
  
Hat tip to JS.

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2 comments

Comments:

Comment from: Les Cook [Visitor]
Doug, I appreciate your posting the TMPA information. However, your statments are misleading. The TMPA total debt did reach over $1.7 billion at its peak. However, about one half billion was borrow for the investment in Comanche Peak Nuclear plant. That money $565 million was repaid to TMPA, but not all used to repaid the bonded debt incurred. TMPA debt also used to invest in the Gibbons Creek Lignite mine. The mine was closed, but much of the incurred cost remains in debt and is recorded as Deferred Cost (Asset) on TMPA books. A smaller portion of the TMPA bonded debt was used for the TMPA Transmission Asset Investment. This investment is the only one that is in good shape debt wise, thanks to the State Legislature. The SB-7 provision that recognized the TMPA excessive debt problem made provisions to speed up the debt payment on the Transmission wires and ERCOT allow an annual transmission rate of over $30 million to clean up this problem. Prior Mayors and Council recognized the TMPA debt problem and Mayor Spence helped pass the Charter Amendment to set up the "Charter GP&L Mitigation Fund". Most of the current TMPA Debt is for the Other TMPA Asset - Deferred Costs or Incurred Cost deferred to be recovered in future rates". The market value of TMPA's Gibbons Creek Coal Plant and the Book Value remain a problem for GP&L ratepayers. The last public offer proposal (that I know of) for GP&L's total Electric Investment including TMPA was from TXU in about 1996 and they suggested Garland would need to pay about $400 million to transfer the GP&L responsibility. Incomplete and inaccurate information continues to be a big problem for getting good GP&L policy and can only be fixed by the Elected GP&L Regulators.
Permalink 08/13/07 @ 10:38
Comment from: Les Cook [Visitor]
Doug, I am attaching some information from TMPA's history that should help Garland Citizens realize that their portion of TMPA bonded debt did not go from the $1 billion to the curent $579 million by payments of debt principal funded with GP&L rates. First the TMPA bonded debt reached a high of $1.743 Billion in 1987 per TMPA financials. Second TXU paid back to TMPA $546 million on Comanche Peak Investment and much of this was included in the bonded debt number. Attachment: I couldn't cut & paste the $546 million number, but it is on your site.
Permalink 08/14/07 @ 11:14

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