Energy and Environment Reporting for Texas

Luminant Coal Units Get Permission to Mothball This Winter

In what will be welcome news to environmental groups, on Tuesday the Texas grid gave the green light to Luminant to idle two units at their Monticello coal power plant and lignite mine in Northeast Texas for the winter.

Photo by SAUL LOEB/AFP/Getty Images

Smoke stacks at American Electric Power's (AEP) Mountaineer coal power plant in New Haven, West Virginia, October 30, 2009.

Earlier this fall, the Electric Reliability Council of Texas (ERCOT), which runs the grid, announced they would review Luminant’s request to idle the units from December until June. Luminant wants to mothball them over the winter because they say they aren’t making enough money to keep them running.

The company had threatened to shut the same coal units down last year because of an impending Environmental Protection Agency rule. When that rule was remanded, Luminant said they would mothball the units  — which are nearly forty years old — for half the year because they aren’t profitable.

“With power prices very low, those two units are not economical to run during these low demand seasons,” Allan Koenig, vice president of communications for Energy Future Holdings, the parent company for Luminant, told us earlier this month. Energy Future Holdings is currently in a financial bind — a recent Bloomberg News analysis declared the company “technically insolvent.” The last seven quarters have seen consecutive losses for the company. 

Energy Future Holdings owns Luminant, which generates power; TXU Energy, a retail electric provider; and Oncor, which operates some transmission lines in Texas.

ERCOT had considered this month whether it would need to keep the plant running in order to maintain power flows for transmission reliability (but not to meet demand), and in Tuesday’s decision determined it wouldn’t be necessary. The coal units may “mothball” beginning December 1 for “a period not less than six months and not greater than 7 months,” according to ERCOT.

Luminant plans to bring the coal units back online in June in time for summer demand (and the potential for more profits).

Update: In a statement this afternoon, acting director of the Sierra Club in Texas Cyrus Reed says ERCOT made the “right call.” “Now, we all must work to grow new resources like solar, coastal wind and energy storage, as well as demand response so we can responsibly phase out Texas’s largest, oldest, and dirtiest coal plants, which continue to harm human health, dirty our air and waste our water resources,” Reed says.

Earlier: Why the Texas Grid May Need to Keep a Coal Plant Running This Winter


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