Luminant, a subsidiary of Vistra Energy (NYSE: VST), today announced plans to retire its Monticello Power Plant in Titus County, Texas. In total, approximately 1,800 MW of power will be taken offline in January of 2018.
Curt Morgan, Vistra Energy's president and chief executive officer, said, "For more than 40 years, Monticello employees have generated reliable power for Texans, and we honor and recognize their service. But the market's unprecedented low power price environment has profoundly impacted its operating revenues and no longer supports continued investment."
Luminant estimates that approximately 200 employees will be impacted by Monticello's retirement. Eligible and affected employees will be offered severance benefits and outplacement assistance. The company will also assist employees who are interested in pursuing open positions within our fleet.
Mr. Morgan continued, "This was a difficult decision made after a year of careful analysis. We are sensitive to the consequences of our decision on employees and members of the local community, with whom we have worked closely for decades. Luminant will be coordinating with civic leadership to prepare for the impacts of the transition."
As part of the retirement process, today Luminant filed a notice with the Electric Reliability Council of Texas ("ERCOT"), which will trigger a reliability review. If ERCOT determines the units are not needed for reliability following this 60-day review, Luminant expects to stop plant operations on Jan. 4, 2018.
Luminant will take the necessary steps to responsibly decommission the facility in accordance with all federal and state regulations. In addition, we will continue the ongoing reclamation work at the plant's mines, which ceased active operations in the spring of 2016.
Vistra estimates it will record one-time charges of approximately $20-25 million in the third quarter of 2017 related to the retirement, including employee-related severance costs and non-cash charges for materials inventory and the acceleration of Luminant's mining reclamation obligations.
About Vistra Energy
Vistra Energy is a premier Texas-based energy company focused on the competitive energy and power generation markets through operation as the largest retailer and generator of electricity in the growing Texas market. Our integrated portfolio of competitive businesses consists primarily of TXU Energy and Luminant. TXU Energy sells retail electricity and value-added services (primarily through our market-leading TXU Energy™ brand) to approximately 1.7 million residential and business customers in Texas. Luminant generates and sells electricity and related products from our diverse fleet of generation facilities totaling approximately 18,000 MW of generation in Texas, including 2,300 MW fueled by nuclear power, 8,000 MW fueled by coal, and 7,500 MW fueled by natural gas, and is a large purchaser of renewable power including wind and solar-generated electricity. The company is currently developing one of the largest solar facilities in Texas by capacity.