Luminant Announces Capacity Idling due to Federal Rules

Luminant announced this morning that it will idle several plants due to the U.S. Environmental Protection Agency's Cross-State Air Pollution Rule.

Specifically, Luminant will idle Monticello Units 1 and 2. These units have a capacity of approximately 1,200 MW.

Luminant also said that it would switch to Powder River Basin coal, from Texas lignite, at Monticello Unit 3 and Big Brown units 1 and 2. The use of Powder River Basin coal will result in derates totaling 100 MW across the three units.

In total, Luminant's above actions will reduce its generating capacity by approximately 1,300 megawatts -- about 9 percent of the company’s total.

Luminant said that it will immediately begin a substantial investment program to upgrade the capabilities of existing environmental control equipment at Monticello Unit 3, the Martin Lake Power Plant, and the Sandow 4 Power Plant. 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.

However, Luminant said that the EPA's 2012 deadline will not allow for the permitting, construction and installation of new equipment in time to avoid the announced closures.