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ERCOT OKs Vistra's plan to retire 2,400 MW coal capacity in Texas

Houston (Platts)--6 Nov 2017 511 pm EST/2211 GMT


Vistra Energy can retire two coal-fired plants in Texas totaling about 2,400 MW of nameplate capacity by early 2018 as planned, the Electric Reliability Council of Texas said Monday.

ERCOT said the two plants are "not required to support ERCOT transmission system reliability," and approved Vistra's requests to close its two-unit 1,200-MW Sandow Power Plant in Milam County by January 11, 2018, and its two-unit 1,200-MW Big Brown Power Plant in Freestone County by February 12, 2018.

The two Sandow units are newer, with unit 4 built in 1981 and unit 5 built in 2010, while Big Brown's two units came online in the early 1970s, according to S&P Global Market Intelligence data.

The market was likely driven higher by the announcement, as North Hub on-peak futures for July-August 2018 delivery were up about $2, trading in the high $70s/MWh Monday on Intercontinental Exchange.

In the wake of recent announced coal/gas generation capacity retirements totaling about 4,600 MW within the footprint, forward power prices across Texas have jumped since the start of October.

Houston Hub on-peak August 2018 packages, reaching as high as over $93/MWh in October and averaged in the high $70s/MWh during the month, according to Platts data, up more than 23% from the average of the low $60s/MWh in September.

--Jeff Zhou, jeff.zhou@spglobal.com
--Edited by Lisa Miller, lisa.miller@spglobal.com

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