Luminant to fight EPA ruling forcing power plant closures
15 Sep 2011
Houston, Texas – The largest power generator in Texas Luminant said it needs to close facilities to comply with the Environmental Protection Agency’s Cross-State Air Pollution Rule. The regulation requires power generators in Texas to deliver large-scale emissions reductions by 1 Jan 2012.
However, the Energy Future Holdings Corp. subsidiary has also filed a legal challenge “in an effort to protect facilities and employees, and to minimise the harm this rule will cause to electric reliability in Texas,” said a 13 Sept company statement. The planned closures, it noted, will cost 500 jobs.
Luminant has spent the last two months identifying all possible options to meet the requirements of this new rule, and is launching a significant investment program to reduce emissions across our facilities,” said David Campbell, its chief executive officer.
“However, meeting this unrealistic deadline also forces us to take steps that will idle facilities and result in the loss of jobs,” said Campbell. “We have hundreds of employees who have spent their entire professional careers at Luminant and its predecessor companies.
“At every step of this process, we have tried to minimise these impacts, and it truly saddens me that we are being compelled to take the actions we’ve announced today. We have filed suit to try to avoid these consequences.”
The company’s legal action is part of a broader effort, supported by a large and bipartisan contingent of political and community leaders, to achieve these goals without harming critically important Texas jobs and electric reliability.
Luminant, like several other affected companies and governmental entities, believes the rule’s mandates for Texas are unlawful. A year ago, the EPA’s proposed rule did not include Texas in the annual SO2 and NOx reductions programmes.
“Now, one year later, the CSAPR imposes a 47% SO2 reduction and substantial NOx reductions by Texas sources beginning in January 2012. And notably, the rule requires a 64% reduction of SO2 emissions to Luminant’s fossil fuel generating units,” the company said.
Luminant’s suit in the US Court of Appeals for the District of Columbia Circuit seeks to invalidate the CSAPR as to Texas. It also wants a judicial stay of this rule because of “the immediate and irreparable harm that it will inflict.”
To ensure compliance in this extremely compressed time frame, production and operational changes will have to be made at two of the company’s large power plant and mining complexes.
Under the Electric Reliability Council of Texas’s protocol, these decisions must be communicated to the Council by 3 Oct so they can adequately prepare for 2012.
At the Monticello Power Plant and supporting Thermo and Winfield mines in Northeast Texas, the following steps will be necessary:
• Monticello Units 1 and 2 will be idled. These units have a capacity of approximately 1,200MW.
• Monticello Unit 3 will cease using Texas lignite for fuel and begin to operate on 100 percent Powder River Basin coal.
• Thermo and Winfield mines will cease mining Texas lignite with the idling of Monticello units 1 and 2 and the fuel switching at Monticello Unit 3, but Luminant will continue reclamation activities at these sites.
At Big Brown Power Plant and its supporting mine in Freestone County, the following steps will be necessary:
• Big Brown units 1 and 2 will cease using Texas lignite for fuel and begin to operate on 100 percent Powder River Basin coal.
• The Big Brown/Turlington Mine will cease mining Texas lignite, but Luminant will continue reclamation activities there.
In addition to these job losses at Luminant, the closures will mean that the counties and communities around the company’s affected operations will see decreased tax contributions, indirect employment, support of local small businesses and other economic activity.
Investment Programme
At Monticello Unit 3 and two of Luminant’s other coal generating facilities, the Martin Lake Power Plant in Rusk County and the Sandow 4 Power Plant in Milam County, the company will immediately begin a substantial investment program to upgrade the capabilities of existing environmental control equipment, install new environmental control equipment and implement programs to reduce emissions.
The company expects to invest approximately $280 million by the end of 2012 and estimates that it will spend more than $1.5 billion before the end of the decade in environmental control equipment to comply with regulatory requirements. Unfortunately, said Luminant, the rule’s 2012 deadline will not allow for the permitting, construction and installation of new equipment in time to avoid the announced closures.
