AEP Makes Official Notifications of Ohio, Texas Retirements

American Electric Power 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.

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.