NRG Coal-Switching Plan Means Closure for Westmoreland Coal's Jewett Mine

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Researched by Industrial Info Resources (Sugar Land, Texas)--NRG Texas Power LLC, a subsidiary of NRG Energy Incorporated (NYSE:NRG) (Princeton, New Jersey), will switch from using Texas lignite to fire its boilers at the Limestone Power Plant in Jewett, Texas, to using low-sulfur coal from the Powder River Basin in Wyoming. NRG Texas Power (NRG) has provided notice that it will terminate the lignite supply agreement at the Jewett mine two years early on December 31, 2016.

The switch will result in the closure of the Jewett Lignite Mine, which is run by Westmoreland Coal Company (NASDAQ:WLB) (Englewood, Colorado), which was built next to the power plant in 1985. The Jewett mine is a surface strip mining operation with a capacity in excess of 4 million tons per year and operated four draglines.

Westmoreland Coal will commence multi-year mine closure and reclamation activities in early 2017.

NRG already uses some Powder River Basin coal at the Limestone plant and has used Powder River Basin coal for a long time at it WA Parish Power Station in Fort Bend County, Texas. Coal is railed in daily from Wyoming to the WA Parrish plant.

NRG's plan to use Powder River Basin coal continues a long-running trend of power-generating companies switching to Powder River Basin coal from other lower-quality coals. Coal from the Powder River Basin provides more than half of the coal used at coal-fired power plants nationwide.

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