December 4, 2017 Read More →

Texas Coal Plant at Risk of Shutdown Has Lost Half Its Appraised Value

Goliad (Texas) Advance Guard:

The merger announcement Oct. 30 between Coleto Creek Power Plant owner Dynegy and the Vistra company has raised questions about the future of the plant.

Fears that it might be sold, closed – or both – stem from Vistra’s history of closing its coal-powered power plants.

Seventeen days before the two companies announced their intention to merge, Vistra announced it was closing three of its coal-powered plants – in Austin, Houston and East Texas.

Vistra CEO Curt Morgan reportedly blamed the decision on wholesale power prices, an oversupply of renewable generation and low natural gas prices.

Analysts note the difficulty in today’s wind-farm and solar-panel environment for any coal-powered plant to see a profit.

Earlier this year, in a research analysis entitled “The Beginning of the End,” The Institute for Energy Economics and Financial Analysis (IEEFA) noted that “Fundamental changes in the Texas electricity market are putting coal-fired power plants under increasing economic and financial stress, including:

  • Natural gas becoming competitive because of its price collapse.
  • Increased competition from wind- and solar-generating facilities.
  • New public and environmental regulations.

“These circumstances,” the report says, “have combined to undermine the profitability of the companies and public power utilities and power agencies which own coal-fired power plants.”

The Coleto Creek plant is among seven coal-fired plants in Texas the IEEFA lists as “at risk.”

Miller notes that since 2007, “we have seen a general decline in the value of the power plant.”

In 2006, the appraised value was $290,468,000. In 2018, the value is $155,000,000 – a drop of 47 percent.

Should the plant close, Miller says, the immediate effect would be a loss of $3.4 million to that tax base.

Broken down, the loss to the county would be $1.2 million, and to Goliad Independent School District, $1.9 million.

“The loss of the plant would have serious repercussions for the community as a whole,” Miller says. “Some serious choices would have to be made. Many don’t realize that Coleto Creek is an integral part of the community.”

Nothing immediate is expected because the planned merger is not expected to be finalized until spring, if then.

More: No change to power plant status until spring

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