Anticipated environmental regulations and compliance deadlines. Click image to view larger version.

The United States Environmental Protection Agency (EPA) has proposed several new rules that will significantly increase the cost of electricity for AEP customers. AEP supports improving the environment by reducing power plant emissions, but believes that the nation can achieve the exact same air and water quality standards at much less expense.

The EPA’s proposals would require AEP and other companies that burn coal to produce electricity to prematurely close some plants and retrofit others with expensive control equipment within three years (see our news release for more details). This approach will lead to much higher costs, lost jobs, wages, and income and property tax revenues for several communities. Beyond that, there likely will be shortages of equipment and labor needed to comply with the new regulations because all companies must comply at once.

Compliance within time frames is not feasible. Click image to view larger version.

AEP also is concerned that that the three years provided to comply is not enough. Major power plant systems such as flue gas desulfurization units (scrubbers) or selective catalytic reduction (SCRs) can take more than four years to design, permit, construct and install. More time is needed.

Another factor is that as power plants are closed or taken off line for retrofits, there may not be enough generation capacity available to meet the demand for electricity. Generation that could be purchased would be expensive. All of these costs would be passed to the ratepayer. Early retirement of generating units also causes significant concerns about grid reliability.

AEP is asking for more time to comply. By extending the compliance deadline through the end of 2021, we can achieve the same air and water quality standards at much less cost for our customers. We can better coordinate plant closings and retrofits, the availability of labor and resources and ensure adequate power. The total cost of compliance would be less, so rates would not go up as much. See more details on our position.

The new rules include:

• Hazardous Air Pollutants Rule - Could cause premature unit retirements and retrofits, reliability issues, and customer rate increases
• Cross-State Air Pollutants Rule - Could cause premature unit retirements and customer rate increases
• Regional Haze Program Implementation Plans
• Coal Combustion Residuals Rule - AEP estimates costs at $4 billion with non-hazardous classification, potentially double that with hazardous classification.
• Proposed Clean Water Act Standards - Requires modifications to intakes to reduce impingement (when fish or other species become pinned against the screen of a cooling water intake structure); modifications for entrainment reductions (when small fish, eggs or larvae are drawn into the cooling water system and are affected by heat, chemical or physical stress) will be determined case-by-case.

Contact your elected representatives and let them know that you support a more rational approach to environmental regulation that achieves the same results at much less cost.