The double-edged pressure of stricter emissions rules and more competitive natural gas has done its fair share of damage to Texan coal but even in counties with some of the highest unemployment rates in the nation, local coal companies are holding the economy together.
Most recently, Energy Future Holdings subsidiary Luminant cited low wholesale power prices as cause for the idling two of its East Texas coal-fired units but the state’s systems operator may force a “must-run” contract to keep the grid humming at a safe level.
The Electric Reliability Council of Texas reportedly said it was considering establishing a special contract with Luminant’s coal-fired stations in the region to ensure reliability for the power network.
According to a report by the Dallas Morning News, ERCOT gave notice it could pay EFH to run two unprofitable units at the Monticello power plant in order to maintain reliable transmission frequency for the overall grid.
In the last year, Luminant has proposed the closing of several coal mines and power plants although most operations have managed to stay online.
Last year, Luminant said a pending federal emissions law would force the company to idle the Monticello power units and three lignite mines – but since the overturning of the proposed regulation, the company has been able to keep the operations active.
Luminant has clarified that the latest threat to the plant is strictly economic as gas prices pressure coal-fired power and its mines will stay open.
It appears that every time East Texas coal is about to be snuffed out, forces align to lift it back up again.
Overturning of the Cross States Air Pollution Regulation saved the region’s coal from the feds earlier this year and now ERCOTS’s system reliability standards are likely to save it from the market pressure of cheap natural gas.
Texas has always been a natural gas state as most of its coal-fired plants are relatively new.
But as a microcosm of the nation at large, the state proves the ability of the other black gold to survive in an increasingly mixed energy market.
