AEP: Allegations made by ex-employee already reviewed; Results show no violation, timely action by company

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COLUMBUS, Ohio, July 13, 2004 - Claims made by a former employee about alleged violations of environmental regulations at American Electric Power (NYSE: AEP) plants in northeast Texas were reviewed earlier this year, the company said. The review found that, for most claims, no violations had occurred and, for the remaining claims, the company had responded quickly and properly reported the incident.

The former employee, Bill Wilson, made the claims during a telephone news conference this morning hosted by the Environmental Integrity Project, an environmental special interest group.

"Many of these same claims were made internally by Mr. Wilson earlier this year," said Michael G. Morris, AEP chairman, president and chief executive officer. "We take our environmental compliance responsibilities very seriously, so claims like this are also taken seriously. We conducted an internal investigation, reviewed the facts related to issues raised by Mr. Wilson and determined that appropriate corrective action had been taken or that no violations had taken place.

"In some cases, Mr. Wilson was taking operating permit language out of context. In other cases, language in the permits and regulations was imprecise and open to interpretation. We have filed all required reports and have cooperated fully with all the regulatory agencies on these issues. We began the process required to amend the permits with more specific language, as necessary, to provide clarity," Morris said.

AEP asked for, and received, a meeting in June with representatives from the Texas Commission on Environmental Quality (TCEQ) after Wilson copied both AEP and TCEQ on a letter sent to a Dallas reporter outlining the allegations. The meeting allowed AEP to address any questions the TCEQ had about the allegations. Discussions between AEP and TCEQ continue.

AEP also stands ready to work with other interested agencies as this issue is resolved.

Wilson´s employment with AEP was terminated in May for causes not related to the environmental claims he had made internally. "We do not retaliate against an employee who files a complaint," Morris said. "We encourage employees to raise issues of concern so we can ensure we are meeting high ethical and legal standards while conducting our business. But filing a complaint does not make an employee immune to disciplinary actions for issues not related to the complaint."

Among allegations made by Wilson are claims of heat input limit and particulate violations at AEP´s Welsh plant near Pittsburg, Texas, use of off-specification fuel at the Knox Lee plant near Longview, Texas, and violation of emission rates for volatile organic compounds (VOCs) at Pirkey plant near Hallsville, Texas.

Facts on Welsh Plant allegations
  • The heat input reference in the permit is a description of the design of the unit and to be used as part of a calculation of emissions limits.

  • Viewing the heat input reference in the permit as an hourly heat input limit is taking that portion of the permit out of context.

  • AEP is in compliance with emissions limits at the plant.

  • To confirm that particulate emissions at the plant are in compliance with permit limits, AEP voluntarily contracted a company to conduct tests of particulate emissions from the plant. Preliminary results show the plant is well within particulate limits. Final results will be provided to TCEQ.

Facts on Knox Lee plant allegations

  • In January, an employee at the Knox Lee plant alerted the company that the plant may have received some fuel that was outside the specifications (off-spec) outlined in the permit.

  • Although the vendor supplied shipping papers identifying the fuel delivery as containing No. 6 fuel oil, a plant employee noticed a peculiar color and odor associated with part of the 21-truckload shipment.

  • Further investigation by the company showed that approximately one truckload was misidentified and contained off-spec fuel oil, not waste oil as claimed in Wilson´s allegations.

  • The company immediately stopped using the fuel.

  • No violation of any emission limitation occurred as a result of the small portion of fuel that may have been used.

  • The review confirmed that this was an isolated incident.

  • The company self-reported the incident to the state.

  • The company also enhanced procedures already in place to prevent the receipt or use of off-spec fuel.

Facts on Pirkey plant allegations

  • The original estimated VOC emission rates in the pre-construction permit in the late 1970s were inaccurate.

  • A permit amendment was sought and obtained in 1987, limiting the operation of the unit to less than 50 tons per year of VOC.

  • Although some earlier testing suggested that emissions may have exceeded the limits in the 1987 permit, testing conducted in 1999 showed emissions well within the permitted rates.

  • As part of a permit renewal process in 2004, the limits were reviewed again and the plant is currently in compliance with its permitted limits.

"We take pride in our ability to operate our power plants safely and efficiently, to comply with environmental regulations and to provide affordable electricity to our customers," Morris said. "While we are confident that claims made by Mr. Wilson are without merit, we will continue to work with the appropriate agencies to resolve any questions they may have."

American Electric Power owns more than 36,000 megawatts of generating capacity in the United States and is the nation´s largest electricity generator. 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.

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Pat D. Hemlepp
Director, Corporate Media Relations