AEP Southwestern Electric Power Co (SWEPCO) and its subsidiary Dolet Hills Lignite Co (DHLC) have entered into an agreement with The North American Coal Corp and its affiliates, Red River Mining Co (RRMC) and Oxbow Property Co (OPC), to acquire 50% of the Oxbow mine lignite reserves and all associated mining equipment and assets. As part of the transaction, Cleco Power, a subsidiary of Cleco Corp, is acquiring the remaining 50% of Oxbow mine’s lignite reserves, located near Coushatta, Louisiana, USA. Consummation of the transaction is subject to regulatory approval by the Louisiana and Arkansas Public Service Commissions and the transfer of other regulatory instruments. If approved, DHLC will acquire and own the Oxbow mine mining equipment and related assets and it will operate the mine. The preliminary purchase price of some $42 million includes the lignite reserves, mining equipment and related assets and permits.

SWEPCO and Cleco Power, along with Northeast Texas Electric Cooperative and Oklahoma Municipal Power Authority (OMPA), are co-owners of the 650-MW Dolet Hills power station located approximately 32 km from the Oxbow mine. SWEPCO and Cleco Power also control the Dolet Hills mine lignite reserves in DeSoto Parish, La. Lignite from Dolet Hills (3.3 Mt annually) and the Oxbow Mine (550,000 t/y) has been the sole fuel source for the Dolet Hills power station since it started operating in 1985.

“This acquisition would ensure a stable and affordable fuel supply for the Dolet Hills power station, extending the supply of local lignite to the plant through the year 2026. It would also maintain a positive economic impact on employment and state and local tax base,” said Paul Chodak, SWEPCO President and COO. “We anticipate that most of the existing RRMC workforce will remain in place,” Chodak said. 

“This acquisition will strengthen our local lignite fuel supply and our ongoing relationship with SWEPCO,” said Dilek Samil, President and COO of Cleco Power, which operates the Dolet Hills power station.