Luminant Plays Politics with Employees’ Jobs, Blames EPA for Consequences of Power Company’s Decision to Fight Much Needed Clean Air Rules

Expert Contact: Jim Marston, 512-289-5293, jmarston@edf.org

Media Contact: Mica Odom, 512-619-8453, modom@edf.org

(Austin, TX – September 13, 2011) For over six years, Texas power companies have complied with a clean air rule first adopted by the Bush EPA. Yesterday, Luminant chose to reverse course and fight vital clean air rules that will save lives in Texas, and that other utilities in Texas have been able to meet. Luminant issued a press release that recused itself of responsibility, threatened possible plant closures and blamed EPA for potential job losses. Luminant’s statement highlights a simple fact that it failed to mention: closing plants is a business decision, plain and simple.

“Luminant isn’t closing these plants because of EPA regulations – that’s just their cover story. They’re closing the plants because they did not act timely. The EPA just gives them a convenient way to shift blame. Unlike most other utilities in Texas, Luminant did not begin to make reductions to meet the rule that anyone could see was coming,” said Jim Marston, EDF’s Texas Regional Office and Energy Program Director. “Moreover, Luminant is ignoring other viable alternatives to plant closures just to save some money in the short-term. If anyone loses their job, they can blame Luminant’s management team for failing to plan accordingly to abide by the law. We feel very bad for the workers whose company let them down.”

EPA’s clean air protections do not require any power plants to shut down. Companies like Luminant make the decision — either invest in common retrofits like scrubbers to clean up pollution or close down old and poorly controlled plants and replace them with cleaner more efficient generation. Numerous other companies, such as Exelon, PPL Generation and NRG, have publicly announced that they are well-prepared to meet the updated clean air protections.

Luminant is a subsidiary of Energy Future Holdings Corp. (EFH) and is the largest electricity producer in Texas. In 2005, there were 32 other power plants in the nation that emitted more sulfur dioxide (SO2) than Luminant’s Martin Lake coal plant. By 2010 there were only three. The story is similarly sad for Luminant’s two other 1970’s vintage plants, Big Brown and Monticello. Ranked 21st and 28th for their total SO2 emissions in 2005, they ranked 10th and 11th in 2010 as Luminant fell behind the industry in cleaning up. EDF’s Jim Marston further stated that “’maybe Luminant likes to be a leader, but air pollution emissions is not a good area in which to lead. It’s bad for Luminant, bad for the health of Texans and bad for the millions of other Americans who live downwind.”

The Cross-State Air Pollution Rule requiring cleaner air in Texas was initially adopted by the Bush EPA in 2005 and revised in July 2011 in response to a judicial decision. Like the rule adopted under the Bush EPA, the revised Rule requires Texas power plants to reduce life-threatening air pollution. The Rule limits the amount of SO2 and nitrogen oxides (NOx) pollution power plants in 27 states – including Texas – are allowed to emit. Collectively, Texas power plants are the nation’s largest emitter of NOx and the second largest emitter of SO2. Nationally, this rule will save up to 34,000 lives, prevent 400,000 asthma attacks, and avoid 1.8 million lost work or sick days each year once in place. Texans will be among the biggest beneficiaries of this rule with up to 1,704 lives saved each year. Likewise, Texas will be among the biggest losers in terms of health if this rule is delayed.

Most Texas utilities have business plans in place to ensure compliance with clean air standards. In fact, Austin Energy and the Lower Colorado River Authority (LCRA) began improvements to their facilities and have already reached the reductions required by the rule, and have excess allowances to sell to Luminant. NRG Energy has also made reductions in anticipation of the rule, which means that it does not face the issues that Luminant has brought upon itself. Finally, City Public Service (CPS) Energy in San Antonio will complete its reductions by the end of this year.

“Luminant had a choice to plan for compliance or fight it. For years, the company fought it and gambled with its shareholder’s money and its employees’ jobs,” said Marston. “Rather than take responsibility for its gamble, the company is blaming the consequences on EPA. As the person who negotiated the environmental commitments during the TXU-EFH buyout, it saddens me that EFH is tarnishing its brand and the long-term value of its stock by violating its touted “Core Operating Principle of Environmental Stewardship” to “outperform current clean air requirements through voluntary emissions reductions.””