Company to retire Texas coal-fired plants, cites market conditions

Citing poor market returns, Luminant on Oct. 13 announced plans to retire two coal-fired power plants in Texas totaling nearly 2,300 megawatts, a week after saying it would retire an 1,880-MW coal-fired plant.

The generating stations are the 1,137-MW Sandow plant in Milam County, the 1,150-MW Big Brown plant in Freestone County and the 1,880-MW Monticello plant in Titus County.

“Luminant decided to retire these units given they are projected to be uneconomic based on current market conditions and given the significant environmental costs associated with operating such units,” Vistra, Luminant’s parent company, said in a Securities and Exchange Commission filing.

Sustained low wholesale power prices, an oversupplied renewable generation market and low natural gas prices, along with other factors, have contributed to this decision, the company said in a press release.

The Irving,Texas-based company had been studying the future of the plants for about a year.

Luminant has filed, or will file, notices with the Electric Reliability Council of Texas that will trigger a review to see if the planned retirements will affect grid reliability, according to Vistra.

If ERCOT approves Luminant’s plans, the company expects to shut down Sandow and Monticello in January and retire Big Brown in February. If the grid operator finds any of the plants are needed to maintain grid reliability, ERCOT would enter into a reliability-must-run contract with Luminant to keep the plant operating.

Under the plan, Luminant’s coal-fired capacity will be cut in half from 8,017 MW to 3,850 MW. Last year, the coal plants accounted for 59 percent of the company’s 77,574 gigawatt hours in total production. Luminant also owns nearly 7,500 MW in natural gas-fired generation and 2,300 MW in nuclear capacity.

Meanwhile, Talen Energy notified ERCOT in late September that the company intends to shutter its natural gas-fired 330-MW Barney Davis unit 1 near Corpus Christi, Texas.

The city of Garland also intends to retire 118-MW of natural gas-fired generation, according to the grid operator.

ERCOT expects to finish the reliability reviews for the plants by the end of the year.

ERCOT has about 81,860 MW of available capacity, including about 67,290 MW of thermal and hydroelectric resources, according to a May report by the grid operator.