From: Reuters, HOUSTON
Published June 10, 2011 06:50 AM

Proposed new environmental regulations will cause AEP to retire 6,000 MW of U.S. coal generation

American Electric Power, one of the country's largest coal-burning utilities, said on Thursday it plans to retire nearly one-quarter of its coal fleet and retrofit other units at a cost of as much as $8 billion to comply with proposed environmental regulations.


To meet stricter pollution limits for air, water and coal waste, AEP said it will retire 6,000 megawatts of coal-fired generation in Virginia, West Virginia and Ohio in 2014.

It also plans to upgrade or install new advanced emissions reduction equipment on another 10,100 MW, convert 1,070 MW of coal generation to 932 MW of natural gas capacity and build 1,220 MW of natural gas-fueled generation.

The Columbus, Ohio-based company, which operates utilities in 11 states serving 5 million customers, warned that costs of the proposed regulations to customers and local economies have "been vastly underestimated," especially in Midwestern states that rely heavily on coal to produce electricity.

"Because of the unrealistic compliance timelines in the EPA (the U.S. Environmental Protection Agency) proposals, we will have to prematurely shut down nearly 25 percent 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." said Michael Morris, AEP's chairman.

Duke Energy, Dominion Resources, Progress Energy, the Tennessee Valley Authority and other utilities have already identified coal units they expect to retire in the next few years.

Industry studies have indicated that between 30,000 and 70,000 MW of coal-fired generation in the U.S. may be forced to shut, depending on the final EPA rules.

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