Luminant, a subsidiary of Vistra Energy, announced Friday it will close two coal-fueled power plants in Central Texas: its two-unit Sandow Power Plant in Milam County and its two-unit Big Brown Power Plant in Freestone County, according to a press release from the company.
In total, approximately 2,300 MW of nameplate power will be taken offline in early 2018 as a result of the closures, the release stated.
According to Luminant, sustained low wholesale power prices, an oversupplied renewable generation market, and low natural gas prices, along with other factors, contributed to the decision.
“This announcement is a difficult one to make," Vistra Energy President and CEO Curt Morgan said. "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.”
Three Oaks Mine, which supports the Sandow plant and is located primarily in Bastrop County, will also close.
Luminant estimates approximately 450 employees will be impacted by the Sandow plant and Three Oaks Mine closures.
The Big Brown site made "tremendous operational adjustments" to remain viable given the challenging market conditions, the company said. However, despite the efforts, the company stated the economics of operating Big Brown do not make it a sustainable option moving forward.
Turlington Mine, which supplies Big Brown, was already scheduled to wind down operations by the end of 2017, and reclamation work will continue there, the company said in the release. Luminant estimates nearly 200 employees will be impacted by the Big Brown closure.
The company said eligible and affected employees will be offered severance benefits and outplacement assistance.
Vistra said it expects to record one-time charges of approximately $70 to 90 million in the fourth quarter of 2017 related to the expected retirements, including employee-related severance costs and non-cash charges for writing off materials inventory and a contract intangible asset associated with Big Brown.