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Posts Tagged ‘Luminant’

Remember sitting at home during February 2 of 2011 as the temperatures dropped and the power kept getting turned off. As millions of Texas sat in the cold and dark Luminant, Texas largest power generator, wasn’t able to get its power plants running along with other generators.

Luminant Energy Company, LLC’s, recently was fined $750,000 as part of a settlement agreement with the Public Utility Commission of Texas stemming from the alleged failure of several Luminant power generating units on February 2, 2011 (when record low temperatures caused a spike in power demand and rolling blackouts were implemented throughout the state).

That February other generation companies saw the cold front coming and got their plants up hot and running keeping this cold snap from being an even bigger disaster than it was.

In ERCOT the state’s power grid operator generation companies are under an obligation to run their power plants and a $750,000 fine in an almost $30 billion dollar market is not much of a fine at all.

Now things are looking dark, gloomy and a bit chilly for EFH Luminants parent company. In November 2013, Energy Future Holdings (EFH) made a decision not to file for bankruptcy saying they believe the company can reach a deal with creditors next spring to avoid a contentious court fight. But with a looming balloon debt payment of $3.8 billion next fall, and a subsidiary of EFH, things are stacking up against the beleaguered Dallas based company.

Electric Reliability Council of Texas (ERCOT) member and Sierra Club Conservation Director, Cyrus Reed weighed in on this development in a statement, saying, “Hopefully, this rather modest fine will send a message to Luminant and other coal and gas generators that when they are paid money by ERCOT to be available in times of emergency — such as the freeze of February 2011 — they must be available. This means utility companies like Luminant must properly maintain their generating units so that breakdowns and emergencies don’t take place when people need electricity the most, such as times of extreme temperatures.”

David Power, Deputy Director of the Texas office of Public Citizen and also an ERCOT member said, “As ERCOT and the PUC consider further changes to ancillary services and potentially to the wholesale energy market, they must make sure that those paid for performance can realistically perform, or face stiff penalties. Texas doesn’t need new, expensive power plants to meet our needs and power our economy, but we do need responsible utilities following the letter of the law and taking responsibility for its assets. What did perform well in both in February and August 2011 was demand response, a method of reducing electricity demand, by large and small industrial and commercial entities.  As Texas considers changes to our market we should prioritize resources like demand response that we can depend on.”

For it’s part, a representative of Luminant said in an email to FierceEnergy that “with this settlement, Luminant resolves all alleged violations of ERCOT protocols and PUC rules from the cold weather event in 2011.The agreement represents an amicable settlement of disputed issues in which Luminant admits no violations.”The email continues, “The severe unprecedented cold in February, 2011 was a trying yet learning experience for ERCOT, the PUC, state lawmakers, electric generators and transmission and distribution companies. Some 225 generation resources in ERCOT, more than 40 percent of the total generation, experienced a trip, failed start or derate. Since 2011, Luminant has joined other generators, electric transmission firms and state agencies to take measures to better prepare for future extreme weather.”

But trouble just seems to keep cropping up:

A prior and unrelated Department of Justice Clean Air Act complaint that was recently unsealed alleged that Luminant made major modifications to Units 1, 2, and 3 at their Martin Lake coal plant in 2005, 2006, 2007, 2008, and 2009 and continues to operate the plant without installing pollution controls for sulfur dioxide and nitrogen oxides. The complaint also alleges that Luminant has improperly withheld information from the government requested by EPA under Section 114(a) of the Clean Air Act.

According to the claims, Luminant made “major modifications” at its Big Brown and Martin Lake coal plants that increased sulfur dioxide and nitrogen oxide emissions without updating air pollution permits or installing pollution safeguards. The Clean Air Act requires plants to obtain permits and install modern pollution controls before making modifications that will increase emissions.

In regard to the DOJ lawsuit, Luminant made this statement via email to FierceEnergy: “There’s no change in our position.  We firmly believe that we have complied with all requirements of the Clean Air Act for the Big Brown and Martin Lake Power Plants and our other generation facilities and look forward to proving this in court.”

The company contends that the complaint has not been unsealed, but appears to be playing a game of semantics, saying, “The DOJ simply filed a version of its complaint with information that we agree can be public.”

This prime example of Texas business just leaves us out in the cold.

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Neighbors for Neighbors (NFN), an organization of residents near Luminant Mining’s Three Oaks Mine, filed late Monday for a contested case hearing on an EFH subsidiary’s request to renew the mining operation in Lee and Bastrop counties.

In its filing, NFN asks the Texas Railroad Commission, the agency that administers mining law in Texas, to require Luminant Mining to post cash or an outside bond to cover the estimated  $60 million cost of cleaning up the strip mine. The group points out since EFH, the parent company of Luminant Mining, is expected to file for bankruptcy by the end of this year, there may not be funds to cover the cost of cleanup.  Click here to see a copy of the filing.

“Does a company have to go bankrupt and walk away from its mines in order for regulators to step in?” asked NFN president Travis Brown. “It would be the height of irresponsibility for Texas to allow a company going bankrupt to say, ‘Trust us, we’re good for it.’ We want Luminant Mining to post real bonds to assure that the mining restoration gets done.”

Russel Bostic, a local rancher and NFN member, said “I live next to the mine, and the company has condemned and is planning to use my land. My family wants our land to be restored to its original condition so we can return.”

Lignite coal mined at Three Oaks is used to supply Luminant’s two coal-fired power plants near Rockdale.

Under federal and state law, mining companies are required to restore mined areas to their original condition.  Those companies must also set aside money so resources will be available for the restoration, even if the company abandons the mine.  The law was created because many U.S. mines were abandoned when companies went bankrupt, leading to contamination of surface water and groundwater.

In Texas, Luminant Mining is responsible for the operation and cleanup of eleven active strip mines. If EFH goes bankrupt and sufficient cash has not been set aside for cleanup, taxpayers could end up with the estimated $1.01 billion cost of cleaning up all the mines.

Instead of requiring that $1.01 billion be set aside in cash or a real bond, the Railroad Commission allowed Luminant to “self-bond,” which means the company is relying on a “guarantee” that their own assets will cover the bonds without having real cash bonds set aside that the state can readily access.  In recent years, EFH has shifted to third party guarantee of the bonds, but the third party is another subsidiary of EFH, so still them.

In its current request for a mining permit for Three Oaks, Luminant Mining is again asking to post a self-bond for cleanup.

Brown said, “The company recently said in a community meeting at the mine that they intend to pledge assets for the cleanup bond. They said they need to operate the mines and coal plants to generate revenues to pay the new debt.  But nowhere in their most recent 8K [financial statement to SEC] do they make that commitment.”

Brown added, “This is especially disturbing since the company also says – in the same 8K – that they expect the price of gas to go up and coal to stay low. That’s the same poor business plan that has led to this bankruptcy.”

Michele Gangnes, an NFN member and a bond attorney, said “The law is clear, and Texas regulators should take immediate action to demand a cash bond so taxpayers and the environment are protected.”

Gangnes added, “In many states, Luminant Mining would be required to put up a cash bond before allowing the Tree oaks mine to expand. But EFH has been playing a shell-game, and state regulators have allowed it. We are asking the Railroad Commission to guarantee that EFH has to set cash aside or post a third-party bond specifically for cleanup of the mines in this bankruptcy deal.”

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Instead of taking action to clean Texas air, as requested by the Dallas County Medical Society, Texas Commission on Environmental Quality (TCEQ) Chairman Bryan Shaw and Commissioner Toby Baker voted today to deny the petition for rulemaking and further postpone needed air quality improvements for East Texas and the Dallas-Fort Worth areas.

The DFW area has struggled with unhealthy levels of ground-level ozone pollution – caused emissions from vehicles and power plants mixing in the sunlight - for decades.  While improvements in air quality have been made, they have lagged behind tightening air quality standards set by EPA to protect public health.  Asthma rates – particularly among children – have continued to rise, as well as hospitalizations due to asthma.

Martin_Lake

In addition to contributing to ozone problems in East Texas & the DFW area, Luminant’s Martin Lake coal plant emits more toxic mercury than any other power plant in the nation, ranks 5th in carbon dioxide emissions & is responsible for $328,565,000 in health impacts from fine particle emissions.

Meanwhile, Luminant continues to operate three coal-fired power plants with a total of eight generating units in East Texas that were build in the 1970′s.  These outdated facilities emit nitrogen oxides (NOx) – which is one of the two ingredients in ozone creation – at twice the rate of new coal plants in Texas.  The rule changes recommended by the Dallas County Medical Society would have required those old coal plants to meet the same standards as new coal plants by 2018 – giving the plant owners more than ample time to make the upgrades or arrange to retire the facilities.

Instead of focusing on whether or not reducing NOx emissions from those old coal plants in East Texas would lead to reductions in ground-level ozone in the DFW area, the Commissioners persisted in questioning the science that shows that exposure to ground-level ozone results in increased and worsened incidents of asthma.  Never mind that the research has been vetted by the EPA and reaffirmed by health organizations including the American Lung Association.  The mindset at TCEQ, as at many of our agencies and with far too many of our elected officials, is that Texas knows best and industry must be protected at all costs.

We appreciate the more than 1,400 Public Citizen supporters who signed our petition in support of reducing emissions and protecting public health.  All of those comments were submitted into the record and I read a few of them allowed at today’s hearing.

We will continue to fight for healthy air as TCEQ moves forward with developing a updated State Implementation Plan (SIP) to bring the DFW area into attainment with ground-level ozone air quality standards.  That process will be ongoing in 2014, so stay tuned.

 

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Today the Dallas County Medical Society filed a petition with the Texas Commission on Environmental Quality asking the agency to adopt rules to reduce the pollution from three old coal-fired power plants that contribute disproportionately to high ozone levels in Dallas-Fort Worth and East Texas.

“Evidence is overwhelming that our high ozone levels are causing increasing numbers of area children to develop asthma, and are contributing to the many asthma attacks, chronic lung disease exacerbations, and heart attacks we see every day in our emergency rooms, clinics and hospitals,” said Robert Haley, MD, a Dallas internist and epidemiologist. “A large body of medical research shows that more people of all ages develop respiratory illnesses and die prematurely in cities with high ozone levels, and we have among the highest ozone levels in the country.”

To address this issue, DCMS and the Texas Medical Association sponsored a study by Daniel Cohan, PhD, an environmental engineering scientist at Rice University, to review all the scientific information about ozone pollution in North Texas and identify ways to reduce ozone levels without compromising the state’s energy grid or jobs. Click here for study. 2013 white paper august 1 2013

“The Cohan Report identified these three very old coal-fired power plants south and east of Dallas, built in the 1970s, that have never been required to meet current emission limits and which contribute disproportionately to ozone levels in the Dallas-Fort Worth area,” according to Cynthia Sherry, MD, DCMS president. “With the impending bankruptcy of the plants’ owner, Energy Future Holdings, the plants likely will change hands.” The petition asks that the TCEQ require these plants to meet the same low emission levels for ozone-forming gasses that are required of the company’s two newer lignite-fired power plants. “This is the time to require that the plants lower their emissions to protect the health of North Texans,” Dr. Sherry said.

The three power plants are Big Brown near Fairfield, Martin Lake near Longview, and Monticello near Mount Pleasant.

“Because of their age, these three plants emit large amounts of pollution for a relatively small amount of electricity produced,” said   Cohan, the report’s author. “Today’s technologies offer economically more attractive alternatives that would be far less polluting.”

According to the report, a combination of natural gas, geothermal, coastal wind, and solar production could replace the energy production capacity — and the East Texas jobs — of the three old coal plants at equivalent prices to Texas ratepayers. East Texas, where the three coal plants operate, has uniquely amenable geologic characteristics that make geothermal power generation unusually attractive.

Energy Future Holdings, an investment group that purchased the power plants from TXU, is facing bankruptcy because the drop in energy prices from the boom in natural gas production has reduced the profitability of coal. It also faces new requirements to control mercury emissions, and the Environmental Protection Agency is formulating additional requirements for controls on CO2 emissions.

“The financial press is predicting bankruptcy or restructuring of Energy Future Holdings,” according to Tom “Smitty” Smith of Public Citizen’s Texas office.  “The petition by the physicians and environmental groups will put the company or new owners on notice that they can’t keep running these old, polluting plants without investing in new pollution controls. Concerned citizens can add their names to the petition by visiting PETITION WEB SITE.”

The petition can be found at http://www.ipetitions.com/petition/tceq-please-clean-up-northeast-texas/

To comment on the petition, go to  http://www10.tceq.state.tx.us/epic/efilings/ . To submit comments, use Docket No. 2013-1612-RUL, which was assigned to this Petition for Rulemaking (Dallas County Medical Society Petition: EPA-Compliant Pollution Control on Old Coal Plants).

The scientific report can be found at www.dallas-cms.org/news/coalplants.pdf.

“Bad air day: Report details power plant dangers,” Texas Medicine, June 2013, pp. 45-49, accessed at: http://www.texmed.org/Template.aspx?id=23977

 

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NPR’s State Impact reported this morning that Energy Future Holdings (formerly TXU) has “self-bonded” approximately $1 billion for future mining restoration in Texas in lieu of real cash bonds. Click here to hear the entire story.

In the transcript of the story it discusses the main concerns of Public Citizen and Sierra Club who have been investigating this issue for the past six months.

At the heart of the two groups’ (Public Citizen and Sierra Club) concern is what’s called “self-bonding.” Under federal law, mining companies must post bonds as a form of insurance to cover the cost of reclamation in case the companies run into financial trouble. Instead of using an outside company to provide the bonds, mining operators in Texas are allowed to self-bond. Some coal states don’t accept self-bonding.

Texas has approved Luminant Mining’s self-bonding. The self-bond’s “third party guarantor” is a sister company, Luminant Generation. It’s the power plant company that burns the coal from Luminant Mining.

The environmentalists say they’re worried that those power plant assets might also be claimed by other creditors, jeopardizing the funds Texas might recover to pay for reclamation.

Luminant’s parent company, Energy Future Holdings, has explained in annual reports to the United States Securities and Exchange Commission that the company faces creditworthiness requirements for different regulators in Texas, among them the Railroad Commission. For years,  the reports said that “we believe we will have adequate liquidity to satisfy such requirements” or “we believe we would have adequate liquidity capacity and/or financing capacity to satisfy such requirements.”

But then, in a 2012 report, that line disappeared.

“It was the smoking gun,” said Public Citizen’s Smitty Smith.

On page 100 of EFH’s 2008 10K filing, page 100 of EFH’s 2009 10K filing, page 98 of EFH’s 2010 10K filing, and page 93 of EFH’s 2011 10K filing, the following appears

The RRC has rules in place to assure that parties can meet their mining reclamation obligations, including through self-bonding when appropriate. If Luminant Generation Company LLC (a subsidiary of TCEH) does not continue to meet the self-bonding requirements as applied by the RRC, TCEH may be required to post cash, letter of credit or other tangible assets as collateral support in an amount currently estimated to be approximately $xxx (from a low of $600 million in 2008 to a high of 990 million in 2011) million. The actual amount (if required) could vary depending upon numerous factors, including the amount of Luminant Generation Company LLC’s self-bond accepted by the RRC and the level of mining reclamation obligations. . . .

In the event that any or all of the additional collateral requirements discussed above are triggered, we believe we would have adequate liquidity and/or financing capacity to satisfy such requirements.

On page 85 of EFH’s 2012 10K filing, only

The RRC has rules in place to assure that parties can meet their mining reclamation obligations, including through self-bonding when appropriate. If Luminant Generation Company LLC (a subsidiary of TCEH) does not continue to meet the self-bonding requirements as applied by the RRC, TCEH may be required to post cash, letter of credit or other tangible assets as collateral support in an amount currently estimated to be approximately $850 million to $1.1 billion. The actual amount (if required) could vary depending upon numerous factors, including the amount of Luminant Generation Company LLC’s self-bond accepted by the RRC and the level of mining reclamation obligations. . . .

appears, the followup statement, found in the previous 4 years 10K filings is conspicuously missing.

In the event that any or all of the additional collateral requirements discussed above are triggered, we believe we would have adequate liquidity and/or financing capacity to satisfy such requirements.

NPR’s story goes on to say “a media liaison for Energy Future Holdings, Allan Koenig, would not comment specifically about the line that disappeared.”  But that was followed up by an email from the company saying, “We fully satisfy the bonding requirements of the Railroad Commission of Texas for our coal mines, which means that our reclamation obligations are guaranteed.”

Well, yes they do satisfy the bonding requirements allowed by the RRC and their obligations are guaranteed by Luminant Generation, but it is all the same company and still at risk if the assets of the company, should a reorganization occur, be found insufficient to meet the bond amount currently estimated at $850 million to $1.1 billion.  EFH is telling the Railroad Commission ‘Trust us, we’re good for it’ even though the company debt is rated as junk status by the financial ratings agencies like Standard and Poor’s. What EFH is doing is like a family getting a second mortgage on a house and losing their jobs.  How can Texas regulators have any confidence that the assets of Luminant Generation will be protected from the bankruptcy process and available to cover future mining reclamation costs?

In a memo from the Railroad Commission (RRC) to Luminant Mining Company regarding Docket No C12-0006-SC-46-E, on the Oak Hill Mine application for replacement bond, it appears Luminant reassured the RRC that in their 2012 3rd quarter filing EFH’s liquidity amount (at that time) was $3.8B and that amount would be sufficient to cover all obligations including Luminant Minings reclamation needs.  However, we don’t know that this will still be the case 3 to 12 months from now should EFH file for bankruptcy.

We believe the RRC and Texas would be best served by requiring a more secure form of bonding for reclamation needs.

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Back in March, the Dallas Observer reported about the chance that Energy Future Holdings (EFH – formerly TXU) the state’s largest power generator, was verging on bankruptcy,  Our question then was – are Texas ratepayers going to have to pay for EHF’s bad bet?

Before and since then, there has been a lot of talk about how the EPA is threatening our ability to keep the lights on in Texas.  It was just last fall that Dallas based Luminant claimed that it would be taking 2 coal-fired generating units at the Monticello plant offline due to the cost of complying with newly proposed EPA regulations.

Now, with EPA’s Cross-State Air Pollution Rule off the table, Luminant is going to take the Monticello plant offline for the winter season anyway.  The reality of the energy market in Texas and across the U.S. is that coal isn’t the cheapest option anymore.

Now comes the Dallas Observer with a new article questioning EHF’s Luminant generation division’s claim that EPA regulations are going to be the cause of plant closures.

Brantley Hargrove writes:

Does Texas’ biggest electricity generator, Dallas-based Luminant, just have one hell of a poker face, or should we not read too much into Friday’s announcement that it will idle two units at its Monticello plant for six months? If you’ll recall, the company threatened to idle the units last summer, a time when record demand almost forced rolling blackouts. It claimed that an EPA rule designed to reduce the amount of harmful air pollution wafting across state lines was going to force the company to remove 1,200 megawatts from the grid, enough to power more than a million homes.

Texas politicos were quick to pile onto the agency’s “job-killing” regulations, which they said threatened the very integrity of the grid. “As expected, the only results of this rule will be putting Texans out of work and creating hardships for them and their families, while putting the reliability of Texas’ grid in jeopardy,” Gov. Rick Perry scolded from the presidential campaign trail.

“The rule will impose great costs on coal-fired power plants, causing some to shut down or curtail operations, threatening the state’s electrical capacity reserve margins needed to avoid power disruptions during times of peak demand,” Texas Commission on Environmental Quality director Bryan Shaw warned. “Such a scenario could lead to blackouts, which create serious health risks for Texans dependent on reliable energy.”

To hear them tell it, Texas was given a brief reprieve when a federal appeals court stayed the rule pending oral arguments. And when it tossed the Cross-State Air Pollution Rule altogether last month, the court’s decision was heralded as a decisive coup for Luminant and Texas electric reliability.

“EPA’s illegal micro-managing of state air-quality plans was so specific that immediately after the rule-making it was clear that coal-powered energy production at Texas-based plants operated by Luminant, a big utility, would have to be cut,” a Wall Street Journaleditorial opined. “Tuesday’s ruling means Luminant will be able to keep 1,300 megawatts of power online in Texas, which needs more electricity because unlike other parts of the U.S. in the Obama era it is growing.”

But no sooner had Texas Attorney General Greg Abbott crowed over his “defeat” of the “EPA overlords” than Luminant announced it would idle those two Monticello units anyway. Awkward. For between six or seven months, starting in December, they will sit dormant. Luminant spokesperson Allan Koenig blames low power prices. Monticello has been running below capacity as it is, he says. They’ll be back online in time for next summer’s heat wave. In the meantime, somehow, Luminant won’t lay anybody off.

What Koenig says about the power market is true: The price of electricity fell along with the price of natural gas back in 2008. Ever since then, their bottom line has gotten pinched, along with everyone else’s.

But Luminant is a special case, troubled by a unique predicament, causing some to wonder whether we can lay everything at the feet of the cruel market. The real problem came (as we examined in a March cover story, “Blackout Blues”) when private equity firm Kohlberg Kravis Roberts saddled the former TXU with tens of billions of dollars in debt. The bull electricity market KKR was betting on went bearish, and the newly reconstituted Energy Future Holdings’ already daunting mountain of debt became insurmountable. Analysts think the company’s preparing for an impending bankruptcy.

So, the coal-fired plants KKR expected Luminant to ride into profitability are now cheaper to shut down, particularly when seasonal electricity demand is low. That makes sense. It made sense, too, that as the generator navigated treacherous financial straits, costly pollution controls on aging, depreciating coal-fired units wouldn’t be the wisest investment. It’s one big expense they can’t currently afford. Nor can it afford to lose money by running a coal-fired plant.

It all causes one to wonder, though: Now that the threat of regulation has, albeit momentarily, passed, and the units it threatened to shut down because of clean air rules have gone dark anyway, what was the point of all that brinksmanship? Was Luminant playing a high-stakes game of chicken to ward off regulations by threatening to idle a plant it was going to idle regardless of the outcome? Luminant’s Koenig says the shut down is “in no way related” to last year’s regulatory standoff. “Federal regulation is very, very different from low power prices,” Koenig says. “We can’t control either, but we can respond to regulation and low power prices. The argument to me, it’s absolutely apples and oranges.”

Yet others in the industry say it’s all about the market. Always has been.

“These regulations will not kill coal,” John Rowe, until recently the leader of one of the country’s largest generators, told an audience at an American Enterprise Institute conference. “In fact, modeling done on the impacts of these rules shows that up to 50 percent of retirements are due to the current economics of the plant due to natural gas and coal prices.”

If fingers need to get pointed anywhere, point them in that direction, and at LBO architects that left the company all but incapable of navigating these choppy Texas waters.

We are wondering the same and believe market factors are impacting the coal industry more than the EPA and the current administration.

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Planning for Texas’ energy future must include drought proofing our energy supply with energy efficiency and renewable energy, not propping up old dirty fossil fuel plants.  To that end, we applaud the Electric Reliability Council of Texas (ERCOT – the Texas electric grid operator) for calling Luminant’s bluff to shut down the aging Monticello coal fired plant in North Texas, and finding that we don’t need to pay a premium to run one of Texas dirtiest coal plants to keep the air conditioners running.

In October of this year, the EPA announced new regulations (called the Cross-State Air Pollution Rule or CSAPR) to reduce air pollution from industrial facilities like coal-fired power plants on downwind communities. Prior to the release of this new rule, TXU/Luminant, the largest power generating company in Texas, blamed the impending EPA regulations for job losses and subsequently announced it would be shutting down two of its coal units at Monticello.

Three Texas Luminant plants (Monticello, Martin Lake, and Big Brown) are some of the dirtiest coal plants in the country, and would be impacted by any new air pollution rules the federal government might impose.  But compared to other coal plants, these three plants alone are:

  • 46.8% of all Texas coal plant      emissions (19 existing coal plants)
  • 41.5% of all Texas coal plant SO2      emissions
  • 36.0% of all Texas coal plant PM-10      emissions
  • 30.6% of all Texas coal plant NOx      emissions
  • 71.7% of all Texas coal plant CO2      emissions

and by all
rights should clean up their act or shut down.  However, a report from TR Rose Associates shows in detail how Luminant’s shuttering of these coal plants is most likely due to poor financial management rather than regulation of their air quality emissions.

Right now in Texas, the drought and the expected heat wave next summer is far more of a problem than U.S. Environmental Protection Agency (EPA) rules for water intensive plants like coal and nuclear electric generation plants.  If we are to keep the lights on next summer, the Governor, the Texas Commission on Environmental Quality and the Public Utility Commission of Texas should develop a plan to use energy more wisely and efficiently during the summer and not worry about the shuttering of dirty old coal plants.

After receiving notice that Luminant, had filed a Notification of Suspension of Operations for Monticello Units 1 and 2, ERCOT – the grid operator – had to make a determination about whether it was okay for Luminant to retire the units rather than idle them so that ERCOT could call on them to run in a grid emergency.  This is what ERCOT calls a “Reliability Must Run” (RMR) status determination.  An RMR status for the old Monticello units would have meant that Luminant might have been getting paid a premium to run these units at full capacity next summer, with almost no limits placed upon the type or amount of emissions during that activity, the implications for Dallas/Ft Worth’s air quality would probably have been significant.

According to a release by ERCOT, “As required by Protocol Section 3.14.1(1), ERCOT has completed its analysis and determined that Monticello Units 1 and 2 are not needed to support ERCOT transmission System reliability (i.e., voltage support, stability or management of localized transmission constraints under first contingency criteria). ERCOT, in coordination with Oncor, has identified Pre-Contingency Action Plans (PCAPs) and Remedial Action Plans (RAPs) which will be used to ensure transmission security without the need for RMR Agreements associated with these Resources. . . Based upon this final determination, the Resources may cease or suspend operations according to the schedule in their Notice of Suspension of Operations.”

So to recap:

  • Luminant threatens to shut down its two old units at Monticello coal-fired generating plant and blames the new EPA Cross State Air Pollution Rules.
  • A report from TR Rose Associates shows Luminant’s shuttering of these coal plants is most likely due to poor financial management rather than regulation of their air quality emissions.
  • ERCOT determines that these Monticello units are NOT needed to maintain grid stability.

Luminant 0 : State of Texas 2

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Public Citizen, Sierra Club and SEED Coalition are calling on Luminant to come clean and retire, rather than idle, the old dirty coal plant, Monticello 1 and 2.

After receiving notice that Luminant Generation Company, LLC, has filed a Notification of Suspension of Operations for Monticello Units 1 and 2 with the Electric Reliability Council of Texas (ERCOT), these environmental groups called on Luminant to retire the units rather than idle them and be more forthcoming with long-term plans that will affect workers.  While Luminant and Texas have been in the headlines repeatedly for their opposition to the Cross State Air Pollution Rule, the rule would effectively help Dallas/Fort Worth meet the minimum public health air quality standards for the first time in years. Yet, if Luminant only idles the plants, then chooses to run them at full capacity next summer, the implications for Dallas/Ft Worth’s air quality remain unclear.

“Luminant has been frightening Texans with claims that power will become scarce if the company is not allowed to continue polluting unabated.  But other Texas utilities are cleaning up their act without difficulty, and this summer’s successful growth of coastal wind demonstrates there are multiple ways to meet Texas’ electricity needs.” said Jen Powis, representative of Sierra Club’s Beyond Coal Campaign.   “Indeed, the Public Utilities Commission and ERCOT both have multiple tools in their arsenal that can be used to ensure grid reliability as Texas moves beyond coal.”

Luminant states that the rule unfairly targets their existing generation, yet a review of the 2009 self-reported emissions inventory maintained by the Texas Commission on Environmental Quality demonstrates that the three Luminant coal plants (Big Brown, Monticello, and Martin Lake) are the top 3 industrial polluters in Texas among nearly 2,000 industrial plants. They are exceptionally dirty plants:

  • Combined they emit 25.5% of state industrial air pollution
  • Combined they emit 33.8% of state industrial SO2 air pollution
  • Combined they emit 11.4% of state industrial PM10 air pollution
  • Combined they emit 10% of state industrial NOx air pollution
  • Combined they emit 37.6% of state industrial CO air pollution

Comparing Luminant’s three coal plants only to other coal plants, however, shows an even more problematic tale.  Luminant’s Big Brown, Monticello, and Martin Lake are:

  •  46.8% of all Texas coal plant emissions (19 existing coal plants)
  • 41.5% of all Texas coal plant SO2 emissions
  • 36.0% of all Texas coal plant PM10 emissions
  • 30.6% of all Texas coal plant NOx emissions
  • 71.7% of all Texas coal plant CO emissions

“We call on Luminant to move beyond posturing and sit down at the negotiating table with EPA in good faith to discuss responsible retirement plans for these plants, like CPS Energy in San Antonio is doing. This approach would be good for consumers, our health and the environment,” said Tom “Smitty” Smith of Public Citizen’s Texas office.

“In order to protect the health of Texans, Luminant must plan now to retire these old coal plants. Monticello has often been the worst emitter of toxic mercury pollution in the nation,” said Karen Hadden, Executive Director of the Sustainable Energy and Economic Development (SEED) Coalition. “We don’t believe Luminant’s plans to retrofit these plants are economically feasible given the company’s poor financial health. Their plans rely on multiple expensive changes, any of which could simply fail to materialize. Luminant should commit to retire Monticello Units 1 and 2, and work with ERCOT, EPA, and public interest groups to prioritize clean energy generation.”

Public Citizen, Sierra Club and SEED Coalition call on Luminant to cease the use of scare tactics, and commit to a plan to retire its Monticello Units 1 and 2, paving the way for clean energy in North Texas. All three groups also call on ERCOT and the PUC to move forward by implementing new rules for energy storage, distributed renewable energy like onsite solar, energy efficiency, demand response, and a restructuring of the Emergency Interruptible Load System to assure there are maximum options available next summer.

“The Legislature has already granted broad authority to ERCOT and PUC to expand our use of these tools,” noted Cyrus Reed, with Sierra Club. “Now it’s time for them to step up to the plate, begin implementing these measures, and using their time to create solutions rather than fight clean air protections.”

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Here’s some great news! With EPA tightening the standards for coal plant emissions, Energy Future Holdings, the parent company of Luminant (formerly TXU) and the major electric power provider for much of North and West Texas, is considering how to respond to new federal clean-air regulations.  Yesterday they announced they will mothball 3 coal plants in Northeast Texas.

In a filing with the U.S. Securities and Exchange Commission, the company said it was looking at all options including other shutdowns or slowdowns, as well as seasonal or temporary shutdowns, and the option of installing scrubbers to remove sulfur dioxide from plant emissions, or even switching fuels to fire the furnaces that generate the steam used to generate electric power.

This will significantly improve air quality and the health of people that live near the plants and downwind.  The company is concerned about the expense of controls that would be needed for these old and dirty plants.

CPS Energy in San Antonio is already planning to mothball and then retire Deely 1 & 2 coal plants for the same reasons.

Blue skies smiling at me,
Nothing but blue skies do I see

Ozone days, all of them gone
Nothing but blue skies from now on

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Data on Dangerous TXU-Luminant Pollution Underscores Need for Strengthened Environmental Safeguards

The Sierra Club released new reports indicating that three large, North East Texas coal-fired power plants owned by Luminant, formerly TXU, are single-handedly causing violations of federal air quality standards.  The three East Texas coal plants addressed in the reports — Big Brown, located in Freestone County, Monticello, located in Titus County, and Martin Lake, located in Rusk County, have a history of environmental problems.  The new reports indicate that sulfur dioxide emissions from the troubled coal plants are causing air pollution in nearby areas that exceeds the federal air quality standard for sulfur dioxide (SO2).  The reports come a week after the Environmental Protection Agency (EPA) issued a rule that requires coal-fired power plants in 28 states, including Texas, to cut dangerous SO2 emissions.

“TXU-Luminant’s coal plants have been a problem for public health and the environment for a long time now.  Big Brown, Monticello, and Martin Lake top the list of the nation’s worst polluters,” said Neil Carman, Sierra Club’s Clean Air Program Director.  “These reports reveal that the TXU-Luminant coal plants’ emissions of dangerous SO2 pollution are more than double the allowable amount of that pollutant.  

The new EPA safeguard is designed to protect public health by setting a maximum amount of SO2 considered to be safe for Americans to breathe. The reports by Khanh T. Tran of AMI Environmental, show that the three coal plants are each modeled to emit SO2 pollution at levels that are predicted to far exceed the federal standard – even without taking into account other background sources.

SO2 is linked to asthma, other respiratory illnesses, and heart disease.  SO2  is especially harmful to those with existing conditions, such as asthma, and is associated with increased emergency room visits, according to the EPA.

In 2010, TXU-Luminant’s three coal plants emitted the following tonnage of SO2 into the air:

Martin Lake                ~76,000 tons of SO2
Big Brown                    ~63,000 tons of SO2
Monticello                   ~58,000 tons of SO2

TOTAL in 2010      ~ 197,000 tons of SO2

Ilan Levin, attorney with Environmental Integrity Project, said “Despite lots of promises, TXU-Luminant continues to be the poster child for dirty coal-fired power plants.  The levels of dangerous contaminants being put into the air and water from just these three coal plants is staggering.”   

Highlights From the Reports:

  • Big Brown, Monticello, and Martin Lake are the top three emitters of sulfur dioxide emissions in Texas
  • Martin Lake coal plant was modeled to exceed safe limits by over 189%, and the area of exceedances is up to 10 miles away from the coal plant.
  • The report’s modeling shows that each coal plant is causing exceedances of sulfur dioxide air quality standards independently, without taking into account other sources of SO2 pollution.

TXU-LUMINANT OPTIONS

“A series of additional EPA environmental safeguards  are pending that will require  coal plants to install a series of retrofits to meet toughening clean air and water  standards. We estimate these retrofits  could cost  as much as $3.6 billlion for all three of the plants,” said Tom ‘Smitty’ Smith of Public Citizen’s Texas Office.  “TXU-Luminant should consider retiring these aging coal plants and replacing them with cleaner energy options such as energy efficiency and renewable energy including geothermal, wind, and solar power. TXU-Luminant has already made some clean energy steps, however they could create many more jobs by transitioning away from dirty coal toward clean energy.”

An earlier report released in March 2011 by the Sierra Club, The Case to Retire Big Brown, Monticello and Martin Lake Coal Plants details financial issues at the North East Texas TXU-Luminant coal plants which are the subject of today’s air modeling reports.  The financial report’s author Tom Sanzillo found, “The bottom line investment decision: should $3.6 billion, and possibly more be invested into plants that are nearing the end of their useful life (usually fifty years) in a regional economy that is not conducive to coal plants. Throughout the United States coal plants are being retired because the market in mid and late stage plants are no longer profitable.”

Neil Carman, Clean Air Program Director with the Sierra Club’s Lone Star Chapter summed it up this way, “TXU-Luminant should begin phasing out and retiring the dirtiest coal plants – these plants are public health hazards and that is not acceptable — nor financially viable.  TXU-Luminant would do much better to strongly transition to clean energy.”

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Luminant, operator of the two-unit Comanche Peak nuclear power plant 45 miles southwest of Fort Worth, shut down the facility’s Unit 1 reactor about 7 p.m. Thursday and they were still working earlier today to correct the problem that caused the shutdown.  No word yet as to when the unit would be back online. 

Luminant says they were  investigating the cause of this issue, but decided to to take the unit offline to ensure the continued safety of plant employees and plant reliability due to a problem related to an under-voltage relay, which ensures the appropriate amount of voltage is provided to a pump motor.

This outage comes on the heels of STP’s almost month long shutdown back in November of 2010.  See our earlier blog post about that outage.

EDITOR’S NOTE:  Comanche Peak’s Unit 1 was reported back on on Saturday, January 15th.  We were unable to find out what time the nuclear reactor was brought back on line that day, but know that the unit was off line for more than 24 hours.

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Citizen opposition to more nuclear reactors at Comanche Peak continues. On August 6th the Atomic Safety and Licensing Board (ASLB) Panel found that Luminant had failed to adequately analyze issues brought by concerned citizens in their Petition to Intervene in the proposed expansion at Comanche Peak Nuclear Power Plant.

“This is a major victory for those living near Comanche Peak and throughout Texas,” says Karen Hadden, Executive Director of Sustainable Energy and Economic Development (SEED) Coalition. “The ASLB Panel has recognized in their decision that Luminant has not sufficiently analyzed alternatives to nuclear power as the law requires.”

The Comanche Peak Interveners (formerly referred to as Petitioners) include SEED Coalition, Public Citizen, Ft. Worth-based True Cost of Nukes and Texas Representative Lon Burnam, District 90, Ft. Worth. On June 10th-11th, the Interveners’ attorney, Robert V. Eye, went before the designated ASLB Panel and argued the admissibility of the 19 contentions filed with the Nuclear Regulatory Commission on April 6th challenging the adequacy of Luminant’s application to construct and operate Comanche Peak Units 3 and 4. Four months later, the ASLB Panel found that two of the contentions deserved further inquiry and delayed a decision on the Interveners’ contention dealing with the Luminant’s lack of plans to deal with catastrophic fires and/or explosions.

“The Environmental Report in Luminant’s application is seriously flawed,” says Mr. Eye. “The collocation of Comanche Peak Units 1 and 2 and the proposed Units 3 and 4 is never considered in light of various accident and radiological release scenarios. A radiological accident at one unit could cause collateral impacts and disruptions in operations at the other units, and Luminant should have considered this.”

The contentions admitted for further adjudication in the August 6th ASLB decision are as follows:

Contention 13. Impacts from a severe radiological accident at any one unit on operation of other units at the Comanche Peak site have not been, and should be, considered in the Environmental Report.

Contention 18. The Comanche Peak Environmental Report is inadequate because it fails to include consideration of alternatives to the proposed Comanche Peak Units 3 and 4, consisting of combinations of renewable energy sources such as wind and solar power, with technological advances in storage methods and supplemental use of natural gas, to create baseload power.

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stop nukeOral Hearing Set for June 10th-11th in Granbury, TX

Citizen opposition to more nuclear reactors in Texas continues. On June 10th-11th an oral hearing will be held before the Nuclear Regulatory Commission’s Atomic Safety and Licensing Board on Citizens’ petition to intervene in Comanche Peak Nuclear Power Plant Units 3 and 4.

“I have many grave concerns about building more nuclear reactors in Texas,” said Texas Representative Lon Burnam, District 90, Ft. Worth, one of the petitioners seeking to intervene in the proposed expansion of Comanche Peak. “The risks are simply too high. As the most expensive and most water intensive energy source, and with the unsolved problem of how to handle the radioactive waste, Texans deserve better.”

SEED Coalition, Public Citizen and the Ft. Worth-based True Cost of Nukes are also petitioners. Attorney, Robert V. Eye, will go before the designated Atomic Safety and Licensing Board Panel and argue the admissibility of the 19 contentions citizens filed with the Nuclear Regulatory Commission on April 6th. These contentions point out the inadequacies and the incompleteness of Luminant’s combined operating license application (COLA) to construct and operate Comanche Peak Units 3 and 4.

“Luminant has failed to comply with new federal regulations regarding aircraft impacts,” stated Mr. Eye. “These new regulations are very specific and require the applicant to plan for catastrophic fires and/or explosions that would cause the loss of major critical functional components in the plant. After 9-11, an aircraft attack on a nuclear power plant is a real and credible threat. Moreover, fire hazards represent about half of the risk of a nuclear reactor meltdown. Luminant’s noncompliance with these regulations puts citizens around Comanche Peak in a dangerous position, which is completely unacceptable.”

“Nuclear power is dangerous, expensive and obsolete,” says Karen Hadden, Executive Director of Sustainable Energy and Economic Development (SEED) Coalition. “Wind energy is booming and the cost of solar is coming down, while the costs of proposed nuclear plants is skyrocketing. Although they’re required to do so, Luminant failed to fully consider safer, more affordable alternatives to nuclear in their license application.” (more…)

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stp-water-pond2HB 2721 threatens to fast-track water permits for nuclear plants, which use vast quantities of water. Water is precious, and Governor Perry has just requested federal aid for all 254 counties in Texas due to statewide drought. Water permits should be given careful scrutiny, and not be rushed. This bill, which will be heard tomorrow on Earth Day, would actually deny citizens the right to a contested case hearing for these water permits!

According to Greg Harman over at the San Antonio Current’s QueBlog:

To cool down the superheated water used to create electricity can take hundreds of thousands of gallons of water per minute. According to the Sustainable Energy & Economic Development (SEED) Coalition fighting nuclear power in the state, the plants proposed at Comanche Peak in North Texas would require104,000 acre feet per year: 33.8 billion gallons.

To ease the potential political stew that could come from the plants’ permit applications (if they are built), Canton-based Representative Dan Flynn filed a bill to fast-track the water permitting process. (Dan was joined by Houston’s Rep. Bill Callegari as co-author a couple days after the bill was filed and has since also been joined by reps Randy Weber, Tim Kleinschmidt, and Phil King.)

Under House Bill 2721, the Texas Commission on Environmental Quality must create “reasonably streamlined processes” to move those applications along. One key way to move a controversial permit it to not allow the TCEQ refer it to the State Office of Administrative Hearings for a public airing. (more…)

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simpson-nuke This week citizens submitted two separate filings to the Nuclear Regulatory Commission (NRC) opposing Luminant (formerly TXU)’s proposed Comanche Peak nuclear reactors. Petitioners include state Rep. Lon Burnam, the SEED Coalition, Public Citizen and the Ft. Worth based True Cost of Nukes.

In the past, NRC has made  companies jump through two major hoops before their operating license is granted.  First, the company must complete the reactor design certification process which ensures that the design for the plant is safe.  If a company decides to choose a pre-certified design that has been built before and the NRC has vetted, they may get their operating license faster because they can skip dealing with design issues.  After their design is approved, the company can then file for their license to operate in a separate process.  This is when citizens have the opportunity to analyze such documents as the Environmental Impact Statement and file contentions.

But for this new fleet of nuclear plants being licensed, the NRC has streamlined this process, combining both the design certification and licensing process into one.  This is a major problem for reactors such as those proposed at Comanche Peak because they are submitting a design that has never been built before anywhere in the world.  It hardly makes sense that NRC can approve a plant to operate when they don’t even know if the plant design is feasible or safe, but that is exactly what is happening.  This is kind of like getting in car and driving off to the drugstore when you’re not sure where it is and… oops, might not even know how to drive.

“By 
moving 
the
 license 
forward
 without 
having 
certified
 the 
design,
 the
 NRC
 is
 violating
 its 
own 
rules,” 
said 
attorney 
Robert 

Eye,  “The
 licensing
 process
 should
 be 
halted 
until 
the 
NRC 
can 
honestly
 say 
that 
the 
reactor
 design 
is 
safe.”

Rep. Lon Burnam has compared what the NRC is doing to making those living near Comanche Peak “guinea pigs in a radioactive experiment.”  Other nuclear plants that have 
gone forth with construction before their design was finalized and approved by regulators have seen serious complications.

In addition to the madness of the NRC’s licensing process, there were even further contentions filed concerning defects in Comanche Peak’s license application.  These contentions include:

  • inadequate fire protection
  • no viable radioactive waste disposal plan
  • inability to secure against airplane attacks
  • financial, health and safety risks
  • vast water consumption
  • failure to address safe, clean energy alternatives

The next step in this process is for the NRC to respond to citizen’s petitions and contentions.

For further information on contentions filed, check out SEED Coalition’s press release after the jump. (more…)

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