Merger means uncertain future for Goliad's economy
Dec. 5, 2017 at 9:21 p.m.
Updated Dec. 6, 2017 at 6 a.m.
If a merger goes through, the future of Goliad County's largest taxpayer, a coal-fired plant, looks bleak.
In the spring, Dynegy plans to merge with Vistra after owning the Coleto Creek Power Plant for less than a year.
While neither company will speculate about the future of the plant, which employs 75 people, Vistra has a history of divesting itself of coal plants.
Vistra, based in Irving, is the parent company of TXU Energy and Luminant.
It recently decided to close three of its coal-fired plants in northeast and east Texas by next year.
Already the largest power generator in Texas, Vistra must not own more than 20 percent of Texas' electric grid in order for regulators to approve its merger with Dynegy.
"We continue to take a look at all of our assets both at Luminant and at any plants that we acquire to determine their economic viability," Vistra spokesman Allan Koenig said.
Last year, the Institute of Energy Economics and Financial Analysis in partnership with Public Citizen determined the Coleto Creek Power Plant wasn't economical because of low natural gas prices, competition from renewable energy and proposed environmental regulations that would have required it to make expensive upgrades.
While the Trump administration has significantly backed off on those regulations, the other trends continue, said Luke Metzger, the director of Environment Texas.
Already, ERCOT, or the Electric Reliability Council of Texas, has determined that the three coal-fired plants Vistra will close next year along with a coal-fired plant near San Antonio slated for closure will not destabilize the grid.
Metzger suspects the loss of the Coleto Creek Power Plant, which generates 635 megawatts, won't destabilize the grid, either.
Adrian Shelley, the director of Public Citizen's Texas office, said if the closure were to destabilize the grid, ERCOT would subsidize its operation temporarily and investors in renewable energy would quickly step in to meet any demand.
"We know that Vistra knows how to close coal plants, and we know that Coleto is an unprofitable coal plant, so I think the writing is on the wall here," Shelley said.
Metzger said coal going the way of the horse and buggy is better for Texans overall.
"I haven't looked specifically at what the numbers would be for Coleto Creek, but certainly just the three Vistra plants closing down represent, I think, a 10-percent reduction in carbon dioxide and a 30-percent reduction in sulfur dioxide from the electric sector in Texas, according to the Sierra Club," Metzger said. "We're talking about a major reduction in air pollution, which studies have shown kills thousands of Texans every year."
Both Metzger and Shelley sympathized with Goliad County, though.
Shelley said 600 people will be out of their jobs when Vistra closes three of its coal-fired plants next year.
"But there's 2,400 jobs in wind and wind turbine technician is said to be the fastest growing job in America, so that might be a great profession for them to think about getting into," Shelley said.
If the Coleto Creek power plant closed, Goliad County, Goliad County ISD, the Goliad County Groundwater Conservation District and the San Antonio River Authority would lose a combined $3.3 million in tax revenue.
But for years, these entities have had to tighten their belts.
That's because the plant's value has decreased almost 42 percent in the past decade, Goliad County Chief Appraiser Richard Miller said.
Goliad County ISD Superintendent David Plymale can attest to the belt-tightening.
"We've been making cuts for the last two years," he said, adding that part of the cuts were due the legislature discontinuing a program called "ASATAR," which stands for Additional State Aid for Tax Reduction.
And both Plymale and Goliad County Judge Pat Calhoun vow to deliver on their respective entities' missions if the plant closes after the merger.
Plymale, for example, said even with the present school funding system based in part on average daily enrollment, the state has traditionally provided relief to school districts whose property values have rapidly declined.
Calhoun, meanwhile, said everything except the sheriff's office, emergency medical services and fire could be on the chopping block.
"Ultimately, the mission of any government is to protect its citizens," he said.
Officials are also getting more serious about how to attract another industry to Goliad, which already has no trouble drawing out-of-towners interested in its rich history and beauty.
For example, in January, Calhoun is meeting with the president of the Texas A&M University at Corpus Christi and the operations manager for the Texas A&M Engineering Extension Service to discuss options.
Calhoun said Dynegy previously agreed to lease to the county part of its property adjacent to the plant.
There, a company in another industry could access rail and the interstate as well as electricity, water and a fiber optic cable.
"Goliad is a gem. It has a lot to offer," said Miller, who has been in discussions with both Calhoun and Plymale and wants to get more housing for Goliad County as well. "It's just a matter of us getting out and selling ourselves."
To read more about the merger, click here.