Dynegy will close power plant near Oakwood

Dynegy will close power plant near Oakwood

OAKWOOD — Dynegy Inc. announced Tuesday morning that it plans to mothball its Vermilion Power Generation facility near Oakwood in the first quarter of 2011.

Factors influencing the company’s decision, according to a news release from Dynegy, include the relatively small size of the facility, older technologies and coal delivery challenges that lead to high production costs, as well as weak electricity demand, low prices for power and uncertainties over future regulation.

"The decision to mothball the Vermilion station is a difficult one due to the strength of our operations team and the long run of reliable service that extends to the mid-1950s," said Lynn A. Lednicky, Dynegy’s executive vice president of operations. "We explored numerous options, including alternative fuel supply arrangements, but in the end we’re still faced with poor plant economics that do not favor continued operations."

The 164-megawatt facility employs about 50. And unlike other coal facilities in Dynegy’s Midwest fleet, which receive coal directly by rail, Vermilion’s coal is transported from western states by rail to Danville and then trucked to the Vermilion site. This is the most significant factor leading to Vermilion’s higher production costs, according to the news release.