American Electric Power (AEP), the Ohio utility giant, announced late last week it will retire five coal-fired fuel plants and spend billions of dollars to comply with a series of proposed regulations by the US Environmental Protection Agency (EPA).
The energy giant currently owns 25,000 MW of coal-fired plant capabilities, about 65 percent of its total generating capacity but notes compliance with the new regulations will “prematurely” shut down 25 percent of current coal-fueled generating capacity.
In a company statement, AEP also noted its compliance with new rules aimed at greenhouse gas reductions will cause customers to pay more for electricity. “The sudden increase in electricity rates and impacts on state economies will be significant at a time when people and states are still struggling,” said Michael G. Morris, AEO chairman and CEO.
AEP, one of the nation’s largest electric utilities, said businesses which have been enjoying the benefits of coal-fired energy will see electricity rates increase from 10 percent to more than 35 percent. It also noted communities dependent on their services will see significant reductions in payroll and property taxes within “a very short period of time.”
Factoring in the jobs created in complying with the proposed regulations, the utility company also stated it will still have a net loss of about 600 jobs
AEP is pleading for more time to achieve the same long-term environmental goals with less negative economic impact on jobs and the economy than the new regulations would allow. “With more time and flexibility, we will get to the same level of emission reductions, but it will cost our customers less and will prevent premature job losses, extend the construction job benefits, and ensure the ongoing reliability of the electric system,” Morris added.
Some politicians from both parties were quick to attack the EPA’s efforts at reducing greenhouse gas emissions and known air pollutants such as arsenic and mercury.
“This is a perfect example of the EPA implementing rules and regulations without considering the devastating impact they may have on local economies and jobs,” said Rep. Shelley Moore (R-W.Va.), The Hill reports.
The five plants scheduled for closing are in Virginia, West Virginia (3) and Ohio, all to be retired by the end of 2014.
Sen. Joe Manchin, (D-W.Va.), a known critic of the EPA, added: “Let me be clear, it’s decisions like the one made by AEP today that demonstrate the urgent need to rein in government agencies like the EPA, preventing them from overstepping their bounds and imposing regulations that not only cost us good American jobs, but hurt our economy,” according to The Hill.
AEP noted its costs for complying with the regulations could range from $6 billion to $8 billion within the next 10 years.