Luminant to close 2 Central Texas power plants, cut hundreds of jobs

Luminant's Big Brown power plant. (Photo by Chelsea Edwards)
Luminant's Big Brown power plant. (Photo by Chelsea Edwards)(KWTX)
Published: Oct. 13, 2017 at 11:00 AM CDT
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Luminant announced Friday that it plans to close two coal-fueled power plants in Central Texas, eliminating more than 600 jobs.

The two plants are victims of “an oversupplied renewable generation market, and low natural gas prices, along with other factors,” the company said in a press release.

The company plans to take its two-unit Big Brown Power Plant in Freestone County and its two-unit Sandow Power Plant in Milam County off line early next year.

The company is also closing its Three Oaks Mine in Bastrop County, which supports the Milam County plant.

The company estimates that the closing of the Sandow plant and the mine will affect about 450 employees, who will be offered severance benefits and outplacement assistance, Luminant said in a press release.

About 200 employees will be impacted by the closure of the Big Brown plant, and they too will be offered benefits and outplacement assistance, the company said.

“This announcement is a difficult one to make,” Curt Morgan, Vistra Energy’s president and chief executive officer, said in a press release.

“It is never easy to announce an action that has a significant impact on our people. Though the long-term economic viability of these plants has been in question for some time, our year-long analysis indicates this announcement is now necessary. These employees have kept both plants reliably powering Texas for decades, and we greatly appreciate their service.”

The Sandow plant is just outside of Rockdale, which weathered a similar blow in 2008 when Alcoa announced it was curtailing smelter operations and laying off more than 1,500 workers.

In a message to members Friday, Rockdale Chamber of Commerce President Rebecca Vasquez said “the potential devastation to our community requires immediate action.”

“Now is the time to come together and work towards a better Rockdale and a better Milam County,” she said.

“As we all know, the Alcoa closing in 2008 was devastating, yet we pulled through and survived.”

Alcoa, meanwhile, announced Friday that it and Luminant have terminated an electricity contract tied to Alcoa’s Rockdale operations.

The company has maintained only a skeleton operation since curtailing smelter operations.

“While the company sold surplus electricity since the smelter’s curtailment, Alcoa’s cost of power under the contract exceeded the related revenue, “ the company said in a press release Friday.

The termination of the power contract and related fuel and lease agreements was effective Oct. 1, Alcoa said.

Alcoa made a lump sum payment of $327.5 million on Oct. 10 and transferred about 2,200 acres of related land and assets to Luminant, the press release said.

Alcoa is reviewing remaining buildings and equipment associated with the smelter, casthouse and aluminum powder plant and a decision on their fate is expected by the end of the year, Alcoa said.

The company still owns more than 30,000 acres of land at the Rockdale site, Alcoa said.

“Reaching a resolution on the Rockdale power contract aligns with two of our strategic priorities – to reduce complexity and to drive returns,” said William Oplinger, executive vice president and chief financial officer.

(Sam DeLeon contributed to this story)