AEP Announces Plan for EPA Compliance; Plant Closures Possible

The plan could cost from $6 billion to $8 billion.

The State Journal
9 June 2011
By Pam Kasey

American Electric Power would retire about 6,000 megawatts of coal-fired generation and refuel another 1,000 with natural gas by 2014 if proposed environmental regulations go through as planned, the company announced June 9.

The retirements would come as part of a larger plan for compliance with several coming U.S. Environmental Protection Agency regulations, according to a news release, and would cost between $6 billion and $8 billion.

The approximately 7,000 megawatts of coal generation retired or switched to gas represents nearly 30 percent of the company’s coal-fired capacity.

“We’ve been advocating for Congress to take a look at this and to develop a more reasonable timeline for achieving these environmental improvements,” said AEP spokeswoman Melissa McHenry.

The proposed EPA rules driving the compliance plan include the Clean Air Transport Rule, the Hazardous Air Pollutants rule, a rule regulating the disposal of coal ash and another about water intake.

AEP announced last fall that it would have to retire 5,000 megawatts of coal-fired generation in response to the proposed regulations; McHenry said this larger number follows from a more detailed analysis of the EPA rules.

AEP Chairman and CEO Michael G. Morris said the timelines in the EPA proposals are unrealistic and will lead to premature plant shut downs that cost jobs and raise electric rates.

AEP expects a net loss of about 600 power plant jobs, the news release states.

According to the compliance plan, retirements would shut down individual coal-fired generation units and in some cases entire power plants Virginia, West Virginia, Ohio, Indiana, Kentucky and Texas.

In West Virginia, AEP would permanently close the Kammer power plant in Moundsville, Kanawha River in Glasgow and Philip Sporn in New Haven. About 240 employees would be affected, McHenry said, adding the company would attempt to place them in other positions elsewhere.

In addition, the company would upgrade or install emissions reduction equipment on about 10,000 megawatts of coal-fueled power generation, would refuel about 1,000 megawatts of coal-fueled generation with natural gas and would build about 1,200 megawatts of natural gas-fueled generation.

AEP estimates the rate effect on West Virginia at 10 percent to 15 percent, McHenry said.

If the proposed EPA regulations are changed before they are finalized, AEP would adjust its compliance plan accordingly.