MANSFIELD, La. – A move that an environmental group says will create cleaner air will be a blow to the DeSoto Parish economy as a longtime lignite-fired power plant could be headed to retirement by 2026.
Southwestern Electric Power Company agreed Thursday to retire of the Dolet Hills Power Plant as part of a settlement agreement related to an Arkansas rate review. SWEPCO will make the necessary regulatory filings 12 months prior to the retirement date.
As part of the settlement, the Sierra Club, which fought for the closure, will withdraw its pending challenge to the power plant with Texas and Louisiana regulatory agencies.
“With this agreement, we continue to focus on the economic operations of the plant and lignite mine to best serve our customers. This action follows our change to seasonal operations last year as we adjust to electric power market conditions and the challenges of mining the Oxbow lignite reserves,” SWEPCO spokesman Peter Main said in a statement Friday to KTBS.
SWEPCO and Cleco Corp., which jointly own the power plant, are listed as the No. 4 and No. 5 taxpayers in DeSoto Parish, according to a June analysis by the DeSoto Parish Tax Assessor’s office.
Dolet Hills Power Plant has 88 employees. Dolet Hills Lignite Co., which covers the mining operation, has 155 employees.
"The low market price of power, coupled with the cost of lignite mined at Oxbow is contributing to the Dolet Hills plant being less competitive. As such, Cleco and SWEPCO are continuing to evaluate the future operations of the plant and mine," Cleco communications manager Jennifer Cahill said in a statement.
The Sierra Club said on its website that aging coal plants are increasingly “obsolete and uneconomic,” adding communities in north Louisiana have “long been affected by air pollution from Dolet Hills.”
Louisiana Public Service Commissioner Foster Campbell is urging the two companies to keep the plant in operation "while we look at alternatives, such as converting to natural gas as a fuel or a large solar facility. Dolet Hills Power Plant and the lignite mining operation have provided reliable and affordable electricity for nearly four decades, and the jobs and tax revenues are important for North Louisiana.”
“Dolet Hills can continue as a solar plant generating jobs in construction and related industries,” Campbell said. “There is also continuing employment in land reclamation as the mine shuts down. DeSoto and Red River parishes are the heart of the Haynesville Shale gas formation, so it’s appropriate that the area remain in energy production.”
The Sierra Club calls the power plant the most expensive coal plant in the state, emitting more carbon dioxide, sulfur dioxide and nitrogen oxide per unit of electricity than all other power plants in the state. It said the its analysis showed retiring the plant will save customers more than $60 million a year in electric bills since the plant consistently costs more to operate that it generates in revenue.
The 650-megawatt plant located in Naborton east of Mansfield was opened in 1986. Cleco, as the majority owner with 50 percent operates the facility, while SWEPCO has 40 percent ownership.
Lignite that feeds the mine spreads across DeSoto and Red River parishes. The lignite mine that feeds the plant continues to operate, but SWEPCO says the lignite has become harder to find and more costly to produce.
“I recognize that Dolet Hills will eventually close due to environmental concerns and competition from solar and wind power and natural gas, but I am pushing for the facility to operate as long as possible to ease the transition for these North Louisiana communities," Campbell said. “Dolet Hills is a prime site for a large solar plant. It is served by electric transmission lines and has land available.”
In December 2018, SWEPCO announced it would cut the workforce at the Oxbow Mine from about 274 to around 140 by the end of 2019. The job losses were to compensate for a move to seasonal operation of the mine.
That announcement came less than two years after SWEPCO moved two huge drag lines from acreage in south DeSoto Parish eastward into Red River Parish to take advantage of the lignite stream.
Well, here you go. DeSoto and Red River Parishes will have their own economic blow from the declining fortunes of coal. Inevitable. And while I understand the position of Foster Campbell, he has little to no clout in the discussion.
Back in the 80's. when the O&G industry was in the tank, International Paper built and opened a papermill in DeSoto Parish, with hundreds of good paying jobs, and then the Oxbow Plant went into construction, and the Dolet Hills Lignite Mine started up, and there were many, many good paying jobs in DeSoto Parish.
Wonder how much longer the IP Mill will continue to operate?
Lignite is the dirtiest of coal. The Oxbow and the Dolet Hills lignite mines are strip mined. The cost to mine the lignite and then reclaim the land, which by the way is done beautifully, is quite costly. There are a number of very good reasons for both mines to be closed and for Haynesville natural gas to take over by way of modern dual cycle technology generating plants. A benefit for SWEPCO and their customers. Changing market forces will always impact employment. It will be a challenge to replace those jobs but in the final analysis that's an insufficient reason for business to operate at a loss.
For mineral owners within both mine plan boundaries, closing the mines will open their minerals to being produced. There is a lot of Haynesville and Bossier gas reserves under both mines that have been off limits to operating companies. Also of possible interest to GHS members, anyone who owned a mineral servitude within the mine boundaries had prescription suspended. Once the mines are no longer in operation, the ten year prescription clock will start to run and those mineral owners should be getting offers to lease.
I think the IP Mill will be there for a long time. I makes liner board and corrugating medium for boxes, a growing market segment (thanks Amazon). It is the last greenfield mill that IP built and is very efficient. At the time it was built it, was totally electrically self sufficient. A third machine as added later as was an electrical feed. Fuel is predominately wood waste (primarily bark) and black liquor (tree resins and associated wood sugars). The bark boilers were designed to use coal or lignite as an alternate fuel (never used lignite) but one was converted to also burn gas several years after opening. I imagine that the other one has been converted also. The lime kiln can burn gas, oil or tdf (tire derived fuel).
IP has been converting white paper machines (i.e copy paper) to corrugated for a number of years (they just announced they are converting a machine at Riverdale Mill in Selma, AL) due to market demand.
Paper Mills in the south are more suited for this type of paper (pine has long fibers and is stronger than hardwood). Northern mills are better at publication papers due to wood source. Expect to see more northern mills to shut down as magazines continue to cut circulation.
thanks for the info, and I'm glad to see you here on GHS. Always happy to have people who can add substantively to the conversations.
Too bad the Dolet Hills facility cannot be converted to natural gas. A similar situation exists in Pointe Coupee Parish where the Big Cajun was built as a coal fired generator. When I asked an old timer why this was so, since there is more than a bit of Nat Gas under Pointe Coupee and that gas has been marketed for a good while, he replied, "Peanut Farmer." I don't know how correct that response might be. I have also been told that Big Cajun has been converted, in part, to run off Nat Gas. Again, I do not know the accuracy of this. Somewhere who knows will surely supply an accurate response to both questions .
The largest of the four conversions was completed at NRG's Joliet Generating Station (pictured), located approximately 50 miles outside Chicago. All three of the plant's units were converted for a total of 1,326 MW.
In Pennsylvania, at the Shawville Generating Station near State College, NRG converted all four units for a total of 590 MW of generating power. The Big Cajun II Generating Station in New Roads, La., will supply 540 MW of gas-fired power. And three converted units at the New Castle Generating Station, northwest of Pittsburgh, will add 325 MW.
Growth: The Weyerhaeuser sawmill in Holden is expanding its plant, adding a continuous dry kiln to its Livingston Parish facilities, according to an advance notice filed with Louisiana Economic Development. The new equipment—representing a $19 million investment—will help with drying and preparing lumber for the market. The company also expects to add five hires to its workforce.