Air Pollution Control Equipment Services, Coal

AEP Ohio seeks costs recovery for IGCC plant

21 March 2005 – Columbus Southern Power Company and Ohio Power Company, subsidiaries of American Electric Power doing business as AEP Ohio, filed an application last Friday with the Public Utilities Commission of Ohio seeking authority to recover costs related to building and operating a new clean-coal technology power plant.

The filing follows a suggestion by the PUCO in its January Rate Stabilization Plan order for the companies that they proceed with this construction.

AEP has announced its intent to build up to 1200 MW of new generation using Integrated Gasification Combined Cycle (IGCC) clean-coal technology, the first commercial-scale use of the technology for power generation and the largest IGCC plan announced to date, and has identified properties in Kentucky, Ohio and West Virginia as sites under consideration. IGCC technology represents an advanced form of coal-based generation that offers enhanced environmental performance. The integrated process results in reduced emissions of nitrogen oxide, sulphur dioxide, particulates, mercury and carbon dioxide.

“We are encouraged by the commission’s urging in our Rate Stabilization Plan order to move forward with the construction of an IGCC facility in Ohio,” said Kevin Walker, president and chief operating officer for AEP Ohio. “This filing provides a plan for recovering the costs for the plant and is the initial step in the final approval process. When ultimate recovery of costs is assured, AEP Ohio will proceed to build this state-of-the-art facility in Ohio.”

Once the plant is built in Ohio, Columbus Southern Power and Ohio Power will retain joint ownership. CSP owns more than 1200 acres along the Ohio River in Meigs County that is a primary site under consideration.

“An IGCC facility will enhance the business climate in Ohio by creating valuable jobs, promoting economic development, and contributing income and property tax revenue to state and local tax authorities,” Walker added.

AEP’s decision to use IGCC for new generation is representative of the company’s leadership position in technology development and implementation, according to Michael G. Morris, AEP’s chairman, president and chief executive officer.

“We see IGCC as the logical next step for coal-fired generation,” said Michael G. Morris, AEP’s chairman, president and chief executive officer.
Morris said. “Our company has a long history as a technological leader in our industry, dating to the completion of the nation’s first major mine-mouth power plant in 1917, the first long-distance high-voltage transmission line, the first generating unit to operate with steam above the supercritical- pressure level, and the development of the largest coal-fired units in the world — our highly efficient 1300 MW plants.

“We’ve worked for more than a decade with technology providers to push clean-coal generation from theory to commercial viability and are extremely pleased to be the first to bring the technology into mainstream use,” Morris said.

Clean-coal technologies like IGCC will keep coal — a plentiful, lower- priced fuel than other alternatives for use in electricity generation — in the nation’s energy mix, which is important for both energy and economic security, Morris said.

“While we are disappointed that the Bush administration’s comprehensive Clear Skies environmental plan — which would have fit nicely with the environmental capabilities of an IGCC plant — did not clear Congress, we still have the long-term obligation to serve our customers in the lowest-cost, most environmentally responsible method possible,” Morris said. “Building IGCC generation best fulfils that obligation.

“Ohio’s environment will be improved by having this new, environmentally- friendly generating facility, one that will be capable of using competitively- priced Ohio high-sulphur coal to meet our customers’ electricity demands,” Morris said.

The Ohio filing requests cost recovery for a 600 MW plant.

“The largest IGCC units are 600 MW, and we plan to build them in series,” Morris said. “A second unit could be built on the same site as the first and operate as one plant, or could be built on a second site.

“Either option will help satisfy our need for at least 1200 MW of new capacity by 2010,” Morris said.