AEP supports improvements to the environment, but they must be done in a manner that does not jeopardize energy supply or reliability, protects the communities that we serve and in which we are located, and keeps costs as low as possible.

Since 1990, AEP has spent more than $7 billion to reduce emissions from its coal-fired fleet. Annual emissions of nitrogen oxides from AEP plants are 80 percent lower today than in 1990. Sulfur dioxide emissions from AEP plants are 73 percent lower than in 1990. The company is prepared to spend billions more to meet new regulations.

AEP supports the Clean Air Act of 1990, but believes the U.S. Environmental Protection Agency’s most recent proposals do not provide enough time for coal-fired utilities to comply. AEP has extensive experience constructing flue gas desulfurization and selective catalytic reduction units that and knows that these controls take more than four years to install.

Because of the large number of units to be built nationwide, labor and materials shortages could increase the cost of projects significantly, making the total cost of compliance much higher than it needs to be. Even before those factors are considered, AEP projects that rates will increase 10 percent to 35 percent, depending on jurisdiction, to comply with the new rules. Actual increases could be higher.

Further, several smaller AEP plants will be closed prematurely to comply with the new regulations. These plants in many cases provide vital system reliability and transmission support services. Without adequate time to coordinate the closing of these plants with the construction of new units, reliability could be at jeopardy. This could require expensive construction of transmission mitigation equipment that would be needed for just a few years and would result in stranded investments.

A phased-in approach will arrive at the same destination. Click image to view larger version.

Phasing in the comparable emissions requirements through 2020 will allow us to achieve the same benefits at much less cost. By giving utilities more time to properly plan and coordinate construction schedules, projects will cost less, older plants can be closed in a more orderly manner, some transmission mitigation expenses can be avoided, communities will have more time to plan for plant closures and the overall cost to customers will be less.

However, this change will require action from Congress. Some of the deadlines are statutory; some are the result of court settlements, which ties the EPA’s hands. That is why AEP supports a legislative approach. We are not attempting to roll back the Clean Air Act. We are simply asking for time to comply in a way that best serves our customers, our communities and the environment.