The Columbus, Ohio-based company said last year that coal’s share of its generation mix would dip to below 50% — 46% to be exact — in 2020. Now, however, it is expected to account for 51%, the company said in new government filings.
“The main reason for the change in our 2020 projection is that we made the decision…not to convert two coal-fueled units (Muskingum River Unit 5 and Tanners Creek Unit 4) to natural gas, which we had previously considered,” said AEP spokeswoman Tammy Ridout. “Those two units will be retired. Those decisions changed the percentage of our capacity fuel mix to be a higher coal percentage and a lower gas percentage than the 2020 projections we released” in April 2013.
Overall, AEP still plans to retire more than 6,000 MW of coal-burning capacity over the next couple of years to comply with new federal Environmental Protection Agency rules.
In what could be good news for AEP’s remaining coal fleet, the company has no current plans to build new gas-fired generation in Ohio, the home of its AEP Ohio subsidiary, Nick Akins, the chairman, president and CEO, told analysts in a late April conference call.
AEP will use less gas than previously projected under its updated generation plan. “Gas is still going to increase but not as much as we had projected,” Ridout said. “Coal generation will not fall as much as previously forecast.”
AEP already has shuttered more than 600 MW of older coal capacity at its Conesville power plant in Ohio and Philip Sporn power plant in West Virginia. Another 2,500 MW of coal capacity is on the chopping block by June 1, 2015, including three units totaling 630 megawatts (MW) at the Kammer power plant in West Virginia; five units totaling 1,425 MW at Muskingum River; two additional units representing 300 MW at Sporn; one 53-MW unit at the Beckjord power plant in Ohio; and a 100-MW unit at the Picway power plant in Lockbourne, Ohio.
Those older coal units targeted for retirement played an important role this past winter in providing electricity to customers, Akins said. Fully 89% of that generation was cranking out power during the height of the “polar vortex” in January, when much of the Midwest was hit with its coldest temperatures in three decades. For the first three months of 2014, those generating units achieved a 46% capacity factor.
AEP still expects to burn 55 to 56 million tons of coal this year. Much of that coal will come from the low-sulfur Powder River Basin. The coal reaches the company’s power plants in Kentucky, Indiana, Ohio, and West Virginia via the Union Pacific Railroad and Ohio River barges.