Appalachian Power seeks to convert two coal energy units to gas fired power

Source:AEP

American Electric Power (NYSE: AEP) unit Appalachian Power has requested approval from state regulators to convert a portion of the existing Clinch River Plant in Russell County, Va., to operate with natural gas. Changing two of the three generating units from coal-fired to natural gas-fired is the least-cost alternative to meeting customers’ power needs, positively supports the economy, and reduces emissions.

 “For more than 50 years three generating units at the Clinch River Plant have served Appalachian’s customers well,” said Charles Patton, Appalachian Power president and chief operating officer. “However, they are not equipped to meet recently approved and anticipated environmental requirements and must shut down. Converting two of the Clinch units to natural gas and retiring the third is the best alternative to meet energy needs, taking into account economic and environmental considerations and diversifying the company’s power plant fleet.” 

In the West Virginia filing, Appalachian asks the Public Service Commission (PSC) to allow the company to proceed with the conversion and provide a mechanism for recovery of the $65 million associated with the project in a future proceeding. If approved, the conversion would cost a residential customer using approximately 1,000 kilowatt-hours a month less than 50 cents a month once the units are operational.

Another aspect of the project involves extending a natural gas pipeline to serve the plant. The pipeline will be constructed, owned and operated by a third party. The total project will cost substantially less than constructing a new combined-cycle natural gas plant or a combustion turbine peaking unit.         

Appalachian seeks approval of the request by February to enable the company to meet construction deadlines in 2015 and 2016. The company also today requested approval for the conversion from the Virginia State Corporation Commission. The natural gas units are expected to be operational in 2016. When complete, the two units will have the capacity to generate 484 megawatts (MW) of electricity. Currently, the three existing units can generate 705 MW.

Conversion of the Clinch River Plant is part of an overall effort to meet Appalachian Power customers’ future electric needs. Four existing power plants operated by Appalachian Power in Virginia and West Virginia will close by mid-2015. In a separate request with the PSC, the company seeks to add low-cost generating capacity from two other West Virginia power plants to its fleet. Last year the company added a natural gas-fired plant in Dresden, Ohio, to its fleet. Once these changes are complete, the company’s fleet of power plants will be more diverse with 69 percent powered by coal, 19 percent powered by natural gas and 12 percent powered by hydro and wind.

 AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined.

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