AEP Announces Retirement of Ohio Power Plant

American Electric Power announced that it expects to retire its 585-megawatt coal-fueled Muskingum River Plant Unit 5 in Beverly, Ohio, in 2015.

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AEP reached an agreement with other parties in February to modify the company's 2007 New Source Review Consent Decree and give AEP the option to retire Muskingum River Unit 5 or refuel it with natural gas. Due to the cost of compliance with environmental regulations and current market conditions, AEP has determined that it is unlikely to make the capital investment to refuel the unit.

AEP will record a non-operating, pre-tax impairment charge for Muskingum River Unit 5 of approximately $150 million to $170 million in the second quarter of 2013. This does not impact AEP's 2013 operating earnings guidance range of $3.05 to $3.25 per share, and the company continues to expect to deliver an earnings growth rate of 4 to 6 percent based upon 2013 operating earnings guidance.

The company previously announced its intent to retire Muskingum River Units 1-4 (840 MW) in 2015.

AEP previously announced the planned retirement of 2,538 MW of coal-fueled generation owned by AEP Ohio in Ohio and West Virginia by the end of 2015. The addition of Muskingum River Unit 5 brings AEP Ohio's total retirements to 3,123 MW.

The remaining 10,725 MW of AEP Ohio-owned generation -- including 2,427 MW slated to be transferred to Appalachian Power and Kentucky Power following state regulatory approvals -- will consist mostly of fully controlled coal-fueled plants, natural gas-fueled combined cycle and combustion turbines, and a small hydro plant.