According to a press release issued by Pacificorp Monday afternoon, the company plans to terminate operations at Deer Creek Mine in early to mid-2015. The public announcement followed several meetings with mine employees in which company officials broke the news to those directly affected by the closure.
The press release states that following an unsuccessful 18-month attempt to sell the Deer Creek coal mine, PacifiCorp announced Monday that it will close the mine in Emery County because it has become too costly to operate for customers. PacifiCorp also signed a long-term coal supply agreement with Bowie Resource Partners LLC to supply coal for the Huntington power plant. Energy West Mining Company, PacifiCorp’s subsidiary operator of the mine, notified the mine’s 182 workers of the pending closure.
“We have evaluated what is in the best interest of our customers and determined it no longer makes economic sense to keep the Deer Creek mine open,” said Micheal Dunn, PacifiCorp Energy president and CEO. “The new long-term coal supply agreement with Bowie will supply PacifiCorp with reasonably priced coal so we can continue to provide safe and reliable electric service to our customers.”
According to the press release, Deer Creek mine has an estimated five years or less of reserves, but much of the remaining coal has higher ash and sulfur content that has made mine production considerably more expensive and has made it more expensive to comply with air quality standards. Bowie Resource Partners LLC has signed a contract to provide the coal needed for the Huntington power plant and will source the plant from its mines in Utah.
Pacificorp also stated that rapidly escalating pension liabilities for the mine’s represented workforce was a large factor in the economic viability of the mine.
Deer Creek mine, located near the Huntington power plant, has been operating since 1974. PacifiCorp is targeting closure of the mine for early to mid-2015 pending regulatory approval.
Energy West Mining is a wholly-owned subsidiary of PacifiCorp, one of the West’s leading utilities, serving approximately 1.8 million customers in six states. The utility has a diverse generation mix utilizing hydroelectric, coal, natural gas, geothermal and wind sources. Rocky Mountain Power is a division of PacifiCorp, which comprises three business units, including: PacifiCorp Energy, which operates the company’s power plants, energy trading functions and mining operations; and Pacific Power, which provides electric service to customers in Oregon, Washington and northern California.