BRILLIANT, Ohio, April 26, 2004 -
American Electric Power (NYSE: AEP) and Buckeye Power are investing in new environmental controls at the jointly owned Cardinal Power Plant in Brilliant, Ohio, a project that not only will reduce emissions but also will provide a boost to the area´s economy.
The firms are conducting preliminary studies and engineering for the installation of flue gas desulfurization (FGD) systems on units 1 and 2 of the Cardinal Plant. FGD systems, commonly called scrubbers, reduce sulfur dioxide emissions, a contributor to acid rain, by up to 98 percent.
Cardinal’s 600-megawatt (MW) unit 1 is owned by AEP. Buckeye Power owns the 600 MW unit 2, as well as a third unit that produces 630 MW. AEP manages and operates all Cardinal units.
Early estimates are that the FGD installations will cost about $200 million per unit. More precise estimates will be available once design and construction plans are complete.
“AEP’s portion of this investment is part of the $3.5 billion we are investing to improve the environmental performance of our generation plants,” said Michael G. Morris, AEP chairman, president and chief executive officer. “The scrubber installations at Cardinal will reduce emissions from this facility and, at the same time, will keep the plant producing a reliable supply of low-cost power for both AEP and Buckeye Power customers.”
"Ohio´s electric cooperatives, through their ownership of Buckeye Power, have spent hundreds of millions of dollars in recent years to ensure their units at Cardinal meet or exceed all state and federal EPA guidelines," said Tony Ahern, president and chief executive officer of Buckeye Power. "This investment not only will allow us to maintain that kind of environmental stewardship but also has the potential to create some new jobs in the region."
The construction projects will create the need for temporary labor. Temporary positions will be filled through contractors selected to install the equipment. Workers from all 14 building trades will be supplied through local union hiring halls. Additional full-time staff will be required once the scrubbers are completed and in operation. The number of additional full-time staff will depend upon the technology installed and material-handling decisions the company makes during the engineering phase.
The scrubber installation marks the second major investment in environmental controls at Cardinal in three years. All three generating units at Cardinal are equipped with selective catalytic reduction (SCR) systems that reduce nitrogen oxide emissions, a contributor to the formation of urban ozone or smog, by up to 90 percent. The SCRs were completed in May 2003 at an estimated cost of $275 million.
Buckeye Power is a member-owned generation and transmission cooperative supplying power and energy to the electric distribution cooperatives in Ohio. The cooperatives’ certified service territory covers nearly 40 percent of the land area in the state and encompasses 77 of Ohio’s 88 counties. They serve more than 335,000 homes, farms, businesses and industries.
American Electric Power owns and operates more than 42,000 megawatts of generating capacity in the United States and select international markets and is the largest electricity generator in the U.S. AEP is also one of the largest electric utilities in the United States, with more than 5 million customers linked to AEP’s 11-state electricity transmission and distribution grid. The company is based in Columbus, Ohio.
These reports made by AEP and its registrant subsidiaries contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and its registrant subsidiaries believe that their expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are: electric load and customer growth; weather conditions; available sources and costs of fuels; availability of generating capacity and the performance of AEP’s generating plants; the ability to recover regulatory assets and stranded costs in connection with deregulation; new legislation and government regulation including requirements for reduced emissions of sulfur, nitrogen, carbon and other substances; resolution of pending and future rate cases, negotiations and other regulatory decisions (including rate or other recovery for environmental compliance); oversight and/or investigation of the energy sector or its participants; resolution of litigation (including pending Clean Air Act enforcement actions and disputes arising from the bankruptcy of Enron Corp.); AEP’s ability to reduce its operation and maintenance costs; the success of disposing of investments that no longer match AEP’s corporate profile; AEP’s ability to sell assets at attractive prices and on other attractive terms; international and country-specific developments affecting foreign investments including the disposition of any current foreign investments; the economic climate and growth in AEP’s service territory and changes in market demand and demographic patterns; inflationary trends; AEP’s ability to develop and execute on a point of view regarding prices of electricity, natural gas, and other energy-related commodities; changes in the creditworthiness and number of participants in the energy trading market; changes in the financial markets, particularly those affecting the availability of capital and AEP’s ability to refinance existing debt at attractive rates; actions of rating agencies, including changes in the ratings of debt and preferred stock; volatility and changes in markets for electricity, natural gas, and other energy-related commodities; changes in utility regulation, including the establishment of a regional transmission structure; accounting pronouncements periodically issued by accounting standard-setting bodies; the performance of AEP’s pension plan; prices for power that AEP generates and sells at wholesale; and changes in technology and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.