Texas coal plant expected to close within 2 years

Source: Edward Klump, E&E News reporter • Posted: Wednesday, September 26, 2018

The coal-fired Oklaunion power plant near the border of Texas and Oklahoma is slated to close by around the end of September 2020, echoing state and national trends.

Ownership with a majority stake in the 650-megawatt plant voted to close it because “the cost of the power produced by Oklaunion is no longer competitive” in Texas’ main power region, according to American Electric Power Co. (AEP). The plant opened in 1986 and is located in Wilbarger County, Texas.

“AEP will be working with employees affected by the closure to address the personal impacts,” the company said in a statement. “Approximately 80 employees work at Oklaunion today. We also will be contacting local officials to discuss the plant closure and impacts.”

The planned exit would add to the list of coal-fired generation departing the region managed by the Electric Reliability Council of Texas. ERCOT is wrapping up a summer season that saw it avoid major problems despite the exit of significant coal-fired generation tied to Vistra Energy Corp. this year.

But more change is expected. For example, two coal-fueled units at CPS Energy’s Deely plant are slated to stop producing power by the end of this year.

Some power plants that use coal and nuclear energy remain a point of contention nationally. Low-priced natural gas and a rise in renewable energy are among the factors affecting power generators. And the Trump administration has explored options that could help keep struggling units on the grid.

Word of the decision to close Oklaunion started trickling out last week. A news release from the Sierra Club yesterday called the move “welcome news to Texans and Oklahomans alike who currently breathe air polluted by this plant.” It noted that some power from the plant goes to Oklahoma and the Southwest Power Pool.

Chrissy Mann, a representative of the Sierra Club’s Beyond Coal campaign, said in a statement that wind generation in Texas and Oklahoma is having an effect, describing it as cleaner and cheaper than power from fossil fuels. Johnson Bridgwater, director of the Oklahoma chapter of the Sierra Club, said Oklaunion “contributes significantly to hazy skies in national parks and wilderness areas across the region.”

The Oklaunion plant’s ownership includes roughly 55 percent for AEP Texas and smaller stakes for Public Service Company of Oklahoma (PSO), the Oklahoma Municipal Power Authority (OMPA) and the Brownsville Public Utilities Board.

“It was OMPA’s preference that the plant be kept operational; however, the majority’s decision was to cease operations,” OMPA said in a statement.

AEP also said PSO would “update its generation plan to reliably and cost-effectively replace the power it currently receives from Oklaunion.”

Leslie Sopko, an ERCOT spokeswoman, said in a statement yesterday that ERCOT hadn’t received a notice of suspension of operations, or NSO, for the retirement of the Oklaunion plant. But she said AEP had advised ERCOT of a plan to close the plant by September 2020. Sopko said ERCOT would do a local transmission reliability study once it receives an NSO and determine whether the unit is needed.

Texas-based Vistra created headlines last year when it announced plans to take coal-fueled units at three plant sites offline in its home state. The combined capacity of retiring or closing units at the Monticello, Big Brown and Sandow locations in Texas topped 4,000 MW, based on numbers provided last year. Coal-fueled units at those three sites left the grid in the early part of 2018.

Through August, coal accounted for roughly 24 percent of the power used in the ERCOT region during 2018. That trailed only natural gas among fuel types. ERCOT recently prepared documentssaying its region had sufficient generation to meet demand during summer 2018 despite new peak demand levels.

In its recent statement, AEP said, “As with other plant closures in recent years, the owners will work with state and federal agencies to ensure that” the Oklaunion plant “is decommissioned in compliance with all regulatory requirements.”