Appalachian Power faces unexpected higher costs for IGCC plant

2 January 2007 — Appalachian Power, a subsidiary of American Electric Power, has delayed making its updated cost calculations public on a proposed 600 MW integrated gasification combined cycle (IGCC) plant in Mason County, West Virginia, US.

The utility submitted a letter to the Public Utilities Commission of West Virginia asking for more time as the utility analyzes the changing environment for its front-end engineering design (FEED) IGCC costs. Appalachian Power previously estimated the plant’s cost to be around $1 billion and promised the commission a more detailed estimate by the end of 2006. The letter to the commission pushed back the expected date, saying a filing may be submitted, “explaining developments and new expectations” regarding the revised cost, in January 2007.

A spokeswoman for the utility told the Charleston Daily Mail that the latest cost information was higher than the company anticipated so management needed more time to examine ways they can bring costs more in line with the company’s goals.

Appalachian Power plans to build one of the first large-scale IGCC plants in the United States. Previous estimates had the plant costing about 20 percent more than a conventional coal-fired plant.

The utility attributed the unexpected cost to high demand for construction materials needed to build the plant, namely steel, concrete and labor.