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Historic transmission investment supports grid reliability and resilience

AUSTIN, Texas — Texas has led the nation in population growth and job creation for years. The Lower Colorado River Authority, the backbone of a large swath of Texas energy and water infrastructure, just approved its largest investment plan to date to help Texas keep pace with its continued growth.

On Wednesday, LCRA’s Board of Directors approved a $656 million operating budget and $1.8 billion in capital investments for FY 2027. The $1.8 billion in capital investments is funded primarily through LCRA’s own revenues and debt, consistent with the organization’s operations since 1934, which have relied on no state appropriations.

LCRA manages the lower Colorado River and six Highland Lakes, provides wholesale electricity to Central Texas cooperatives and small towns, and operates one of the state’s largest transmission networks.

The business plan projects that power demand across ERCOT will grow significantly through 2031. Water needs are rising alongside power demand. LCRA’s plan is built for where Texas is going.

What’s in the plan

• Power: LCRA’s new Timmerman Power Plant in Caldwell County is helping meet the increasing need for reliable, dispatchable power in Texas. The plant’s first unit began providing power to the state’s grid in 2025, and a second unit came online last month. LCRA also continues to build and improve transmission facilities. LCRA TSC expects to invest about $8.6 billion in transmission over the next five years as the state continues to grow.

• Water: LCRA added to the region’s water supply last year with the new Arbuckle Reservoir in Wharton County and is exploring building another reservoir in the lower basin to increase water supplies. LCRA’s Water business plans to invest $153 million over the next five years to develop new water supply projects and tens of millions in dam rehabilitation projects over the same period to help ensure the continued safe and effective operation of LCRA dams.

• Broadband: Over the next five years, LCRA is helping connect communities across Texas to critically needed broadband services by making strategic investments to upgrade and expand its fiber network and radio system. LCRA is working with the Kerrville Public Utility Board to build telecommunication infrastructure for a flood warning system in Kerr County, where construction has begun.

Texas added millions of residents this decade. LCRA’s FY 2027 Business and Capital Plan is its operational answer to that reality: delivering more power, more water and more connectivity.

On January 18, 2023, the Board of Directors of the LCRA Transmission Services Corporation (the “Corporation”) and the Board of Directors of the Lower Colorado River Authority (“LCRA”) adopted resolutions delegating the authority to an authorized representative of LCRA to approve the issuance of one or more series of bonds as Transmission Contract Debt (as defined below) in a maximum aggregate principal amount not to exceed $950 million for the purposes of (i) refunding certain outstanding Transmission Contract Debt, (ii) funding a debt service reserve fund for any such bonds and/or (iii) paying costs of issuance for any such bonds. Pursuant to such authority, on March 2, 2023, LCRA issued its Transmission Contract Refunding Revenue Bonds (LCRA Transmission Services Corporation Project), Series 2023 in the aggregate principal amount of $365,045,000.

LCRA currently contemplates utilizing such remaining authority to price a series of fixed rate bonds (the “Proposed Bonds”) in a principal amount of approximately $481.5 million* as early as May 8, 2023* through a negotiated sale to a syndicate of underwriters led by J.P. Morgan Securities LLC as senior manager.

The Proposed Bonds as Transmission Contract Debt would be secured by a lien on and pledge of certain Installment Payments (as defined below) payable to LCRA from the Corporation pursuant to an amended and restated Transmission Contract Revenue Debt Installment Payment Agreement, dated as of March 1, 2003 as supplemented by a Transmission Contract Revenue Debt Installment Payment Agreement Supplement Relating to the Proposed Bonds, currently anticipated to be dated as of May 1, 2023.

The size, timing, and structure of the potential transaction for the Proposed Bonds is subject to market conditions. LCRA reserves the right to change the timing and size of the sale or not to issue the Proposed Bonds.

Capitalized terms used in this notice and not otherwise defined herein shall have the meanings ascribed to them in the Official Statement, dated February 15, 2023, relating to the Lower Colorado River Authority Transmission Contract Refunding Revenue Bonds (LCRA Transmission Services Corporation Project), Series 2023 issued by LCRA on behalf of the Corporation.

On January 18, 2023, the Board of Directors of the LCRA Transmission Services Corporation (the “Corporation”) and the Board of Directors of the Lower Colorado River Authority (“LCRA”) adopted resolutions delegating the authority to an authorized representative of LCRA to approve the issuance of one or more series of bonds as Transmission Contract Debt (as defined below) in a maximum aggregate principal amount not to exceed $950 million for the purposes of (i) refunding certain outstanding Transmission Contract Debt, (ii) funding a debt service reserve fund for any such bonds and/or (iii) paying costs of issuance for any such bonds.

LCRA currently contemplates utilizing such authority to price a series of fixed rate bonds (the “Proposed Bonds”) in a principal amount of approximately $270 million* in February 2023* through a negotiated sale to a syndicate of underwriters led by RBC Capital Markets, LLC as senior manager.

The Proposed Bonds as Transmission Contract Debt would be secured by a lien on and pledge of certain Installment Payments (as defined below) payable to LCRA from the Corporation pursuant to an amended and restated Transmission Contract Revenue Debt Installment Payment Agreement, dated as of March 1, 2003 as supplemented by a Transmission Contract Revenue Debt Installment Payment Agreement Supplement Relating to the Proposed Bonds, currently anticipated to be dated as of March 1, 2023.

The size, timing, and structure of the potential transaction for the Proposed Bonds is subject to market conditions. LCRA reserves the right to change the timing and size of the sale or not to issue the Proposed Bonds.

Capitalized terms used in this notice and not otherwise defined herein shall have the meanings ascribed to them in the Official Statement, dated September 29, 2022, relating to the Lower Colorado River Authority Transmission Contract Refunding Revenue Bonds (LCRA Transmission Services Corporation Project), Series 2022A issued by LCRA on behalf of the Corporation.