AEP: Coal-fired power plant could be upgraded with environmental controls

American Electric Power (NYSE: AEP) subsidiary Southwestern Electric Power Co. (SWEPCO) has asked the Arkansas Public Service Commission (APSC) to review the company’s plans to install environmental controls on the 528 MW coal-fired Flint Creek Power Plant.

SWEPCO and Arkansas Electric Cooperative Corp. (AECC) each own 50 percent of the plant and SWEPCO operates the facility. As a baseload unit, Flint Creek provides power 24 hours a day.

“To comply with new Environmental Protection Agency regulations, we must install additional environmental controls to continue operation of the Flint Creek Power Plant beyond 2015, or we must replace that generating capacity to serve Northwest Arkansas,” said Venita McCellon-Allen, SWEPCO president and chief operating officer.

SWEPCO and an independent consulting firm evaluated the coal plant retrofit and natural gas alternatives using a range of coal and natural gas prices, emissions allowances and the impact of carbon dioxide regulation. The analyses included compliance with immediate and longer term environmental regulations.  McCellon-Allen said even with low natural gas prices, the coal retrofit option was still the best economic choice said.

To comply with multiple EPA regulations, SWEPCO said it would install controls for sulfur dioxide (SO2), nitrogen oxide (NOx), mercury and other hazardous air pollutants. The controls include a dry flue gas desulfurization system (DFGD), commonly known as a scrubber, to reduces SO2 emissions; low NOx burners (LNB) and overfire air (OFA) to reduce NOx emissions; activated carbon injection (ACI) to reduce mercury emissions; and a fabric filter, commonly known as a baghouse, to filter particulate matter. Current plans are to have the equipment in place and operating by June 2016. SWEPCO would have a one-year extension beyond 2015 to continue operations if it is in the process of installing controls.

The estimated cost of the project is $408 million.

SWEPCO is asking the APSC to establish a procedural schedule that would permit an order to be issued by the end of 2012. Pending the APSC’s decision and approval of environmental permits, construction would begin in January 2014 with completion by June 2016.

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