By Juanice Gray, email@example.com
In just a couple of months, the Oxbow Mine will reduce their workforce. Cuts are expected to begin in late March, reducing their 274 employees by 134 by the end of the year. In addition, approximately 55 contractor jobs will be lost. A second wave of reductions is believed to come near the end of the year.
This comes on the heels of the 2017 fanfare surrounding moving two 8 million pound draglines from the Dolet Hills mine across I-49 to the Oxbow and the opening of a new 5-mile conveyor belt system built under I-49 to deliver the coal to the Dolet Hills power plant. At that time it was reported this transition would mean about another 20 years of life for the Dolet Hills Power Station. The same is obviously not true for the Oxbow.
To understand the process and companies involved, one must go back just over 20 years. The Oxbow Mine is a surface lignite coal mine that yields approximately 550,000 tons of lignite coal each year, and along with the neighboring Dolet Hills mine, has been the sole provider of fuel for the 650 mega-watt Dolet Hills Power Station since 1985. SWEPCO operates the mine and Cleco operates the power plant. SWEPCO and Cleco jointly own the Oxbow mine and the power plant.
In an April 30, 2009, press release, AEP-SWEPCO and its subsidiary, Dolet Hills Lignite Co., announced they entered into an agreement with The North American Coal Corporation and its affiliates, Red River Mining Company and Oxbow Property Company L.L.C., to acquire 50 percent of the Oxbow Mine lignite reserves and all associated mining equipment and assets. As part of the transaction, Cleco acquired the remaining 50 percent of Oxbow Mine lignite reserves. Fast forward to late 2018.
Employees began hearing rumblings of layoffs. The Times spoke with mine employees, whose names are being withheld to protect their jobs. One said they were told the layoffs would happen in the spring and next winter.
“If you are one of the ones to go in the first round, they have at least let you know so you can plan. It wasn’t what we wanted to hear just before Christmas,” one said.
“We’ve heard the mine will be totally closed by 2021 and the power plant dismantled by 2022,” said another. Main said, “(This comment) includes rumor … about mine and plant closure dates. We continue to evaluate the economic viability of the mining operation.”
“The future is uncertain, but for those who are leaving, they are being offered a good severance package and those who are retirement age or close are going to go ahead and retire,” one worker commented.
SWEPCO and Cleco issued a statement to the Times. “Changing operations at the Dolet Hills Power Station and the Oxbow lignite mine that supplies its fuel will save Cleco and SWEPCO customers an estimated $85 million by the end of 2020. The low market price of power, coupled with the cost of lignite mined at Oxbow is contributing to the coal-fired plant being less competitive. As a result, Dolet Hills Power Station will begin to generate electricity only during the warmest summer months, generally from June through September, or when requested by regional transmission organizations.
Employees of Dolet Hills Lignite Company, a subsidiary of SWEPCO, who are working at the Oxbow mine will continue to mine lignite year-round but with just one dragline, beginning in 2019, down from three last year. As such, these changes will reduce the SWEPCO workforce at the Oxbow mine. Employees of Dolet Hills Lignite Company, a subsidiary of SWEPCO, who are working at the Oxbow mine will continue to mine lignite year-round but with just one drag line, beginning in 2019, down from three last year. As such, these changes will reduce the SWEPCO workforce at the Oxbow mine to approximately 140 from 274 by the end of 2019. Approximately 55 contractor positions also will be eliminated in 2019. Dolet Hills Power Station employs approximately 100 Cleco workers, and will see no reduction in the current workforce as a result of these changes.”
The mining operation as a whole generates in excess of $36 million annually in wages and benefits and produces an estimated $4 million in annual taxes. With the reduction of the workforce, those employees will look elsewhere, directly impacting the economy in Red River, Natchitoches and DeSoto Parishes where most of the employees reside.
SWEPCO communications consultant Peter Main addressed the $85 million savings comment above. “The savings will be reflected in the fuel portion of customers’ bills,” he said. It all comes down to the market price of power and remaining competitive.
“To add a bit of perspective on the low market price of power: The cost of a power plant’s fuel directly affects its competitiveness in the energy market. Power prices have been lower in recent years due to lower natural gas prices and the addition of renewable energy resources to the energy market,” Main said. Jennifer Cahill, Cleco corporate communications manager said, “We evaluat
e the productivity and future of our sites every four years and will continue to review power prices and sources.” She said.
“There will be no reduction to Cleco’s current employees at Dolet Hills as a result of the move to seasonal operations. The plant needs the staff that is there to run the unit even during seasonal operations and be available whenever the unit is called upon to produce electricity.”
With the future uncertain for employees at the Oxbow, at least one employee is grateful for the knowledge prior to the layoffs, “At least the severance package will be money we can live on while looking for another job. They gave us time to prepare and make decisions on what is best for us and our families.”