AEP to retire 6,000 MW of capacity to comply with regulations

In order to comply with a series of new federal regulations, American Electric Power (AEP; Columbus, OH) has announced a plan that includes the eventual retirement of nearly 6,000 MW of coal-fired generating capacity and the upgrade or installation of air pollution control equipment on another 10,100 MW of coal-fired capacity. The plan, which is expected to cost $6 billion to $8 billion to implement through the end of the decade, also includes the refueling of about 932 MW of coal-fired capacity by natural gas and the development of another 1,220 of natural gas-fired generating capacity. “We support regulations that achieve long-term environmental benefits while protecting customers, the economy, and the reliability of the electric grid, but the cumulative impacts of the EPA’s current regulatory path have been vastly underestimated, particularly in Midwest states dependent on coal to fuel their economies,” said AEP Chairman and CEO Michael Morris in announcing the compliance plan. “We have worked for months to develop a compliance plan that will mitigate the impact of these rules for our customers and preserve jobs, but because of the unrealistic compliance timelines in the EPA proposals, we will have to prematurely shut down nearly 25% of our current coal-fueled generating capacity, cut hundreds of good power plant jobs, and invest billions of dollars in capital to retire, retrofit and replace coal-fueled power plants. The sudden increase in electricity rates and impacts on state economies will be significant at a time when people and states are still struggling.” The regulations in question include the U.S. Environmental Protection Agency’s (EPA) Clean Air Transport Rule (CATR) and National Emission Standards for Hazardous Air Pollutants (NESHAPs) establishing maximum achievable control technology (MACT) standards for utility boilers, also know as the “Utility MACT.”