Texas Power Company Sues EPA To Cover For Bad Coal Plant Investment

The Monticello coal-fired power plant.

A Texas power company is suing the Environmental Protection Agency to block a clean-air rule that it claims will force it to shut down decades-old power plants and close coal mines, killing 500 jobs. EFH Luminant is fighting the Cross-State Air Pollution Rule, which calls for substantial reductions in smog and acid rain pollution by Texas sources beginning in January 2012:

Dallas-based Luminant has filed a federal lawsuit seeking to remove Texas from a new Environmental Protection rule due to go into effect early next year that the company says will force it to idle two power plants and end mining operations at three lignite mines, including one in Central Texas.

In reality, the two units being idled — Monticello 1 & 2 — were part of a bad deal made by Luminant in 2007. Plummeting natural gas prices and increased electricity production from wind have made the coal plants “almost worthless.” The plants purchased in 2007, including the Monticello units, are now worth about $1 billion but carry $10 billion in debt.

As the population of Texas booms and its temperatures rise, the threat from air pollutants like NO2 and SO2 grows. Millions of Texans — especially children and senior citizens — are at risk from Luminant’s outdated coal plants. The level of pollution from the units violated the Clean Air Act well before the new rule was slated to go into effect. A 2009 State of the Market analysis by ERCOT, the Texas electric commission, found that coal power was becoming a “marginal fuel” in the region:

As significant additional wind, coal and potentially nuclear resources are added to the ERCOT region and transmission constraints that serve to limit existing wind production are alleviated, it is likely that the frequency of coal as the marginal fuel will increase in the coming years.

A 2010 Brattle Group analysis similarly found that the coal plants cannot compete financially with natural gas power.

EFH/Luminant is attempting to make the Environmental Protection Agency the scapegoat for consequences of their poor business decisions. They want people to believe that Americans have to choose between their health and their jobs, but it’s just a crass shifting of blame.

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