AEP Notifies Reliability Organizations of Planned Plant Retirements

COLUMBUS, Ohio, March 22, 2012 /PRNewswire/ -- American Electric Power (NYSE: AEP) today made official notifications to regional reliability organizations PJM Interconnection and Southwest Power Pool (SPP) of the company's plan to retire more than 4,600 megawatts (MW) of coal-fueled power generation, primarily to comply with a series of U.S. Environmental Protection Agency (EPA) 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 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 K. Akins, AEP president and chief executive officer. "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."

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

"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 plan submitted today 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 2012 (which was included in the June 2011 plan) and the company's decision to request regulatory approval in Kentucky to retrofit the 800-MW Big Sandy Unit 2 with environmental control equipment rather than retiring the unit. 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 Plant Unit 3, Conesville, Ohio – 165 MW;
• Big Sandy Plant Unit 1, Louisa, Ky. – 278 MW;
• Clinch River Plant 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 Plant Units 1, 2, 3 and 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 Plant Units 1, 2 and 3, Lawrenceburg, Ind. – 495 MW; and
• Welsh Plant Unit 2, Pittsburg, Texas – 528 MW.

Conesville 3 will retire 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 June 1, 2015, with final retirement dates based on implementation of the new EPA environmental regulations.

Walter C. Beckjord Plant Unit 6, New Richmond, Ohio, operated by Duke Energy, also will be retired. AEP owns 54 MW of that unit's output.

American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. AEP ranks among the nation's largest generators of electricity, owning nearly 39,000 megawatts of generating capacity in the U.S. AEP also owns the nation's largest electricity transmission system, a nearly 39,000-mile network that includes more 765-kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP's transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. AEP's utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP's headquarters are in Columbus, Ohio.

SOURCE American Electric Power