Texas Coal Plant Scales Back Operations

Luminant, a major Texas power-generation company, plans to shut two of three units at one of its 1970s-era coal plants during the winter and spring, the company told the Texas grid operator this week. That removes about 1,200 megawatts, or more than 1 percent of capacity, from the already strained Texas power grid.

“The sole reason is persistently low power prices,” said Allan Koenig, a spokesman for Luminant. The two units, from the Monticello coal plant in Titus County in East Texas, have been operating well below capacity, he said, producing only about a quarter of the power they are capable of for much of the year. The units will come back online in time for the peak demand next summer, Koenig said.

Environmentalists were quick to point out that the two units were the same ones Luminant had argued would be forced to shut down if a federal environmental rule known as the cross-state air pollution rule had taken effect. Luminant had joined state officials in arguing vociferously against the rule, and a federal court threw it out last week, to the frustration of environmentalists.

Energy Future Holdings, the parent company of Luminant, was “really just blowing smoke about how [the cross-state rule] would bankrupt them,” said Tom “Smitty” Smith, of the environmental group Public Citizen Texas, in a statement. “There may be no market for old coal in the winter in Texas because we have so much low-cost wind."

Luminant had previously said that the cross-state rule's requirements "will seriously jeopardize the ability of the state's electric grid to supply power to Texas businesses and consumers."

But Koenig said that the closures announced this week had nothing to do with the cross-state rule. If the rule had taken effect, the company had planned to idle Monticello's two units year-round (no other coal plants would have been idled, according to Luminant's plan).

“This is a seasonal [closure],” Koenig said. Luminant’s filing says that it plans to close the two units for at least six months and no more than seven months, starting Dec. 1.

Prices have fallen because of abundant discoveries of natural gas in Texas and other states. The low prices have caused utilities around the nation to rely more heavily on natural gas, and less on coal. 

The closures at Monticello will not result in job losses, Koenig said, nor will activity be slowed at the lignite mine on the site of the plant. Monticello’s third and final unit will continue to operate year-round.

Robbie Searcy, a spokeswoman for the Texas grid operator, ERCOT, said that her agency would monitor the impact of the closures on the grid.

Winter and spring, when Luminant plans to close the two units, are traditionally times when power demand on the grid is much lower than during the summer, when air-conditioning use skyrockets. Most of the concerns about electric grid strains pertain to the summer. Winter can also cause problems, though. The grid last experienced rolling blackouts in February 2011, when a deep freeze hobbled about a quarter of the state’s power plants.

Al Armendariz, who until recently headed the Environmental Protection Agency's regional office in Dallas and now works for the Sierra Club's Beyond Coal campaign in Texas, echoed Smitty's view. "It's time for Luminant to replace their old plants with clean sources of power, and to stop blaming environmental safeguards for their internal financial mess," he said in a statement, referring to the significant debts of Luminant's parent company.

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