SWEPCO settles with Sierra Club to plan 650 MW coal plant retirement by 2026

Dive Brief:

Southwestern Electric Power Company (SWEPCO) will seek regulatory approval to retire the 650 MW coal-fired Dolet Hills Power Plant in Louisiana by the end of 2026, as part of a rate agreement approved on Wednesday by Arkansas regulators.
SWEPCO, which serves customers in Arkansas, Louisiana and Texas, co-owns the Dolet Hills plant with facility operator Cleco Corp. The utilities last year announced plans to move away from coal-fired generation, toward cleaner sources of power including renewables.
The decision to pursue the plant's closure was part of an agreement with Sierra Club. The conservation group said Dolet Hills is the 300th plant retirement secured by its Beyond Coal campaign.

Dive Insight:

Clean energy advocates support the plant's closure, but say mothballing it sooner could provide cost and carbon saving opportunities. Cleco and SWEPCO previously told regulators they planned to shift to seasonal dispatch of the plant while continuing to evaluate its operation, but that would still leave the plant open for years.

Dolet Hills is the most expensive coal plant in Louisiana, according to Sierra Club, and emits more carbon dioxide, sulfur dioxide and nitrogen oxide per unit of electricity than other power plants in the state. Closing down the plant will save customers more than $60 million a year on utility bills, an analysis by the group found.

"The Dolet Hills power plant consistently costs more to operate than it generates in revenue, and that the plant should be retired as soon as possible," Sierra Club said in a statement. "Replacing Dolet Hills with more affordable, cleaner wind and solar energy generation would create hundreds of sustainable jobs for Louisiana."

SWEPCO owns 40% of the plant, while Cleco owns 50%. Dolet Hills Lignite Co. is a subsidiary of SWEPCO, and operates the Oxbow Mine to provide fuel for the facility.

SWEPCO's generation mix is more than 80% coal, according to Sierra Club.

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SWEPCO confirmed that as part of a settlement agreement with environmentalists in the recently concluded Arkansas rate review, the utility will seek approval to retire Dolet Hills within six years and will make the necessary regulatory filings at least 12 months prior to the retirement date.

The Arkansas Public Service Commission at the end of December approved a net annual increase of $23.9 million in non-fuel base rates for SWEPCO.

Sierra Club agreed to withdraw challenges related to the plant that are pending in Texas and Louisiana as part of the settlement.

"With this agreement, we continue to focus on the economic operations of the plant and lignite mine to best serve our customers," SWEPCO spokesperson Peter Main said in an email to Utility Dive. "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."