Coal Plant Closures

Despite recent efforts by federal officials to modify national energy policies so as to bolster coal and nuclear generating facilities, Vistra Energy late last week announced that it plans to shut down two of its coal-fired power plants early next year. 

The two units, both located in Texas, are the Sandow Power Plant and the Big Brown Power Plant, each of which is operated by Vistra subsidiary Luminant. According to a statement from Luminant, its coal-fueled generation assets simply can no longer compete in an energy market now dominated by low-cost natural gas. 

The company also cited increasingly abundant availability of renewable energy as contributing to its determination that it could not continue to operate the facilities in a costeffective manner. Luminant stated that although it had engaged in a number of cost-cutting and efficiency improvement measures, ongoing low prices in the wholesale markets had rendered the facilities uneconomic and nonsustainable. The company estimated that the closures will result in the loss of about 650 jobs between the two plants.

Retirement of the facilities likewise will eliminate approximately 2,300 megawatts of capacity from the markets overseen by the Electric Reliability Council of Texas (ERCOT). And given the amount of lost generation at stake, Luminant cannot proceed with the planned shutdowns until ERCOT completes an assessment of the impact the closures could have on service reliability within the state. Luminant related that it expects to close the Sandow plant on January 11, 2018, and to cease operations at the Big Brown unit a month later, on February 12, 2018.