Columbus, Ohio-based AEP, the country’s largest coal-reliant electric utility, has much at stake in the outcome of any GHG decisions made by the federal government. AEP already has announced plans to retire about 6,000 megawatts of older, coal-fired capacity in a few years, mainly to comply with the EPA’s Mercury and Air Toxics Standards rule. A crackdown on greenhouse gases by the White House and its hand-picked bureaucrats at the EPA could raise that total.
CEO Nick Akins, during a late February conference call with analysts, acknowledged the controversial GHG issue has “picked up as everybody knows” in recent months. Akins, who succeeded Michael Morris as AEP chief in late 2011, then sounded a cautionary warning: “We have to be really rational in what we do with regard to greenhouse gases, particularly with existing units,” he said. “If there’s too dramatic a change too quickly on existing units, with technology not available, that would be a clear problem for the reliability of the grid and for customer prices going forward.”
If existing coal units are subjected to greenhouse gas regulations, he continued, “You’re going to take a broad swath of the entire coal fleet in this country out, and that’s not where we need to be,” Akins said. Should the government elect to move forward with GHG regulations, Akins said he hopes major coal-burning utilities like AEP will be given a reasonable timetable to accommodate any changes that are necessary.
AEP is making some changes of its own, at least some resulting from a recently revised 2007 settlement decree with EPA, eight states and 13 environmental groups. Late last year, AEP’s Kentucky Power subsidiary agreed to stop burning coal in 2015 in its 1,078-mw Big Sandy power plant near Louisa in Lawrence County.
As part of the revised deal, AEP officially will close its 1,529-mw Muskingum River coal plant in Ohio, an action the utility indicated last year it would take. And, AEP either will shutter or repower with natural gas a 450-mw coal unit the 995-mw Tanners Creek power plant near Lawrenceburg, Ind., operated by Indiana Michigan Power, an AEP subsidiary. I&M previously announced plans to retire the other coal units at Tanners Creek.
