The Texas Municipal Power Agency has informed the Electric Reliability Council of Texas that it will mothball its Gibbons Creek coal-fired power plant, only operating it for part of the year. The 470-MW plant, located in Grimes County, will have a seasonal operation period that begins on June 1 and ends on September 30 each year, according to an ERCOT market notice.
The electric utility systems of Bryan, Denton, Garland and Greenville together comprise the TMPA, which has operated the coal plant since it came online in 1983, according to S&P Global Market Intelligence Data.
According to the Notice of Suspension of Operations, or NSO, filed with ERCOT July 26, the effective date for taking the plant offline would be Oct. 17. ERCOT requires an NSO to be filed for the suspension of any generation resource lasting more than 180 days.
TMPA has been trying to sell the plant for close to a year. The power purchase agreement with the TMPA's member-cities ends in 2018.
Around seventy of the plants employees' will be let go in October, but some will be brought back in the summer months for full operations, according to KBTX-TV. Officials told the news outlet that running Gibbons Creek year-round is not economical, and coal-fired power is too costly compared to other energy sources. They also told KBTX-TV that the sale is "not going well." If the plant is not sold by September 2018, it could be shuttered.
Gibbons Creek was identified by Moody's in a March 2016 report as operating with negative free cash flow. Additionally, a UBS report released in March found that older, less efficient fossil-fuel power plants in the PJM Interconnection market and ERCOT could be pressured to retire amid construction of new generation assets and changing market dynamics. UBS said it expects more retirements in ERCOT in 2018 as companies redirect capital toward economic projects instead of environmental upgrades.
Comments on the proposed action are due to ERCOT by Aug. 9.