Question

Answer

What is happening?

LP&L and Xcel Energy have reached a mutually beneficial agreement that will allow LP&L to purchase Xcel Energy’s electricity distribution system within the city and to serve all of Xcel Energy’s Lubbock retail electric customers.

Why is it happening?

Since 1942 Lubbock has been served by both companies, resulting in duplication of electric power services, lines, poles and substations. Both companies have determined this to be an inefficient and intrusive way to provide electricity to the community.

When is it happening?

The announcement to enter the agreement was made November 4, 2009. It should be finalized by October 2010.

Does it affect all electric customers in Lubbock?

No, it only affects the Xcel Energy customers within the city limits of Lubbock. A map is available on www.lpandl.com The Big Move For Lubbock.

Did anyone advise LP&L prior to entering the agreement?

Yes, three of the largest consulting firms in the country consulted with LP&L. RBC Capital Markets assisted us with financial matters, R.W. Beck assisted with operational matters and Vinson & Elkins assisted with financial matters.

What is the City of Lubbock’s position?

Mayor Tom Martin said "It’s natural for LP&L to pick-up the Xcel retail electric service, since the City of Lubbock already provides utility service to all the properties in Lubbock.

How much is it going to cost LP&L?

The agreement is valued at 87 million dollars.

How will LP&L pay for it?

LP&L will be funding the purchase of Xcel’s Lubbock distribution system through electric service revenue bonds. Due to LP&L’s good bond ratings, entities will purchase the bonds in exchange for interest. LP&L will only have to pay the interest on the bonds and we will pay this interest using revenues, not an increase in electric rates.

Will it affect my electric bill if I am already an LP&L electric customer?

No, you will continue to have one of the lowest electric bills in the state.

Will it affect my electric bill if I am an Xcel Energy electric customer?

Yes, LP&L electric rates are lower than Xcel, so when the agreement is finalized your electric bill will be lower. LP&L will be contacting you with details when the agreement is finalized.

If I am an Xcel Energy customer and I have questions, who do I contact?

Xcel Energy customers should contact Xcel Energy with questions until the agreement is finalized and you receive information for LP&L.