- Westmoreland Coal (NASDAQ:WLB -10%) plunges following news that NRG Energy (NRG -2.8) will terminate its lignite supply agreement at the mine in Jewett, Tex., two years early at year-end 2016, and conduct reclamation work for NRG upon conclusion of the contract.
- NRG says it will instead use “cleaner burning” coal from Wyoming’s Powder River Basin for its Limestone power plant in Jewett, which the company says is an economic decision that also will cut emissions at the plant.
- WLB says the lignite supply contract is a cost plus contract which accounts for ~2% of its 2016 adjusted EBITDA guidance, but the company expects to maintain positive cash flow generation at Jewett during the next several years with the cost plus arrangement continuing through reclamation.