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DALLAS, March 31, 2004 -- TXU Energy will retire eight power plant units due to electric industry market conditions in Texas, for a total of 1,421 MW in capacity.
The company will also temporarily close four other units and place them under evaluation for retirement. The 12 units represent a total of 1,471 megawatts (MW), or more than 13 percent of TXU Energy's gas-fired generation capacity in Texas.
"In a competitive, changing market, we are constantly evaluating our fleet's position in the marketplace," says Richard Wistrand, TXU Energy senior vice president of fossil production. "Texas has a sufficient supply of power and idling these plants will have no impact on reliability of service for TXU Energy customers or any other Texan."
Of the 12 units impacted, eight will be taken out of service permanently and four will be "mothballed," or temporarily closed, with the possibility of restarting them at a later date. The four mothballed units are also under evaluation for full retirement in the future.
A majority of the 12 units were designated as "peaking units" and operated only during the summer for many years and have operated only sparingly during the last two years. Most of the units were built in the 1950s.
The units are:
Name of Power Plant, County, Number of Units to Retire (Capacity)
Rivercrest Steam Electric Station, Red River County, one unit to retire (110 MW)
North Main Steam Electric Station, Tarrant County, one unit (80 MW)
Parkdale Steam Electric Station, Dallas County, three units (327 MW)
Morgan Creek Steam Electric Station, Mitchell County, three of five units (136 MW)
Number of Units to "Mothball"
Eagle Mountain Steam Electric Station, Tarrant County, three units (665 MW)
Collin Steam Electric Station, Collin County, one unit (153 MW)
TOTAL CAPACITY: 1,471 MW
According to Wistrand, closing the power plant units is a prudent business decision, given the supply of electricity in Texas, the higher cost of operating these older power plants, and the ability to buy less expensive power in the marketplace -- all a reflection of a robust, competitive wholesale market in Texas that has attracted independent power producers. This action is not expected to materially affect 2004 earnings.
Approximately 55 employees will be affected by the closing and may have the opportunity to transfer to other areas within the company. Eligible employees who leave the company will be offered severance benefits and outplacement counseling to help them secure other employment.
TXU Energy will meet with Electric Reliability Council of Texas (ERCOT) officials to discuss the decision to close the units and will continue to work closely with them during the shutdown. ERCOT may request any of the units to continue operating under contract with ERCOT if needed for reliability. ERCOT has oversight responsibilities for the electricity grid in most of Texas.
TXU Energy is a subsidiary of TXU, a major energy company with operations in North America and Australia. TXU manages a diverse energy portfolio with a strategic mix of over $31 billion of assets. TXU's distinctive business model for competitive markets integrates generation, portfolio management, and retail into one single business.
The regulated electric and natural gas distribution and transmission businesses complement the competitive operations, using asset management skills developed over more than one hundred years, to provide reliable energy delivery to consumers and earnings and cash flow for stakeholders. In its primary market of Texas, TXU's portfolio includes approximately 18,500 megawatts of generation and additional contracted capacity with a fuel mix of coal/lignite, natural gas/oil, nuclear power and wind.
TXU serves five million customers in North America and Australia, including 2.6 million competitive electric customers in Texas where it is the leading energy retailer. Visit www.txucorp.com for more information about TXU.
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