AEP officially notifies grid operators of coal plant retirements

American Electric Power (NYSE:AEP) said March 22 that it has made official notifications to PJM Interconnection and Southwest Power Pool (SPP) of its plans to retire more than 4,600 MW of coal-fired generation, primarily to comply with a series of U.S. Environmental Protection Agency regulations.

AEP was required to file its plan for plant retirements prior to PJM’s auction in May 2012 that will set electric generation capacity prices for the period June 2015 through May 2016.

“We continue to have serious concerns about the potential impact these plant retirements – and retirements of generation announced by other utilities – will have on the reliability of the electricity grid,” said Nicholas Akins, AEP President and CEO. “Our retiring units were required to run to meet peak demand last summer, and little new generation is scheduled to come on line prior to the retirement dates to replace this lost generating capacity.”

AEP also plans to install or upgrade emission control systems on more than 13,000 MW of capacity. It said that is a task made extremely difficult by the tight compliance deadlines in the EPA rules and the uncertainty about the process for deadline extensions.

“The timing and logistics of these major projects, in addition to routine maintenance outages across the system, will increase demands on the remaining generating units,” Akins said. “We believe additional time to complete the emission control retrofits and coordinate the retirement schedules would better balance the environmental, economic and other impacts of this transformation of the nation’s generating fleet.”

The new retirement plan differs slightly from the nearly 6,000 MW of anticipated retirements AEP announced in June 2011. The differences are due to the retirement of the 450-MW Sporn Unit 5 in February (which was included in the June 2011 plan) and the company’s decision to retrofit the 800-MW Big Sandy Unit 2 with environmental control equipment rather than retiring the unit. AEP’s Kentucky Power unit is currently before the Kentucky Public Service Commission trying to get approval for an SO2 scrubber at Big Sandy Unit 2. AEP also originally planned to rebuild Big Sandy Unit 1 to be fired with natural gas but now plans to retire that unit.

In its notifications with PJM and SPP, AEP confirmed the following unit retirements:

  • Conesville Unit 3, Conesville, Ohio – 165 MW;
  • Big Sandy Unit 1, Louisa, Ky. – 278 MW;
  • Clinch River Unit 3, Cleveland, Va. – 235 MW;
  • Glen Lyn plant (two units), Glen Lyn, W.Va. – 335 MW;
  • Kammer plant (three units), Moundsville, W.Va. – 630 MW;
  • Kanawha River plant (two units), Glasgow, W.Va. – 400 MW;
  • Muskingum River Units 1-4, Beverly, Ohio – 840 MW;
  • Picway plant (one unit), Lockbourne, Ohio – 100 MW;
  • Philip Sporn plant (four units), New Haven, W.Va. – 600 MW;
  • Tanners Creek Units 1-3, Lawrenceburg, Ind. – 495 MW; and
  • Welsh Unit 2, Pittsburg, Texas – 528 MW.

Conesville 3 will be retired by Dec. 31, 2012, and Welsh 2 will retire as soon as Dec. 31, 2014, but no later than Dec. 31, 2016, under terms of court-ordered consent decrees related to separate actions. All other units are estimated to be retired by June 1, 2015, with final retirement dates based on implementation of the new EPA environmental regulations.

The coal-fired Walter C. Beckjord Unit 6 at New Richmond, Ohio, which is operated by Duke Energy (NYSE:DUK), also will be retired. AEP owns 54 MW of that unit’s output.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.