AEP construction program largest in the industry, second largest in the USA

New emissions-reduction equipment and power generation brought on line in 2007 by AEP will extend the environmental life of low-cost, coal-fuelled generation and boost local economies.

American Electric Power ( AEP) has an aggressive program to install emissions-reduction equipment on its existing plants and build new generation facilities. The company’s construction program was ranked the second largest in the USA and the largest in the utility industry, based on capital invested, in a November 2007 report from Engineering News-Record. Only Alcoa had a larger construction program during the same period. In 2007 alone, AEP completed installation of advanced emissions-control equipment on 3,500 MW of coal-fired generation and started and finished construction of a 340-MW gas power plant.

“By the end of 2007, we’d completed more than two-thirds of the massive $5.1 billion program that we began in 2004 to reduce emissions from our existing coal-fuelled generating fleet.┬áIt’s a testament to the diligence of our employees and the skills of the thousands of contractors who’ve worked with us that we’ve successfully managed one of the largest construction programs in the country and completed all of the work on time, or ahead of schedule, and on budget,” said Michael G. Morris, AEP chairman, president and chief executive officer.

“These investments not only provide long-term environmental benefits by significantly reducing emissions from our coal-fuelled plants, they also extend the environmental life of these low-cost facilities and prevent the need to build thousands of megawatts of new power plants that would exponentially increase electricity prices for our customers. We still need new plants to meet growing electricity demand, but equipping our current coal-fuelled plants with the latest environmental controls prevents the premature retirement of these efficient facilities by significantly reducing their environmental impact.

“These projects also support local economies through the addition of thousands of temporary and permanent jobs and the development of new businesses, including the opening of local mines and, in the case of Moundsville, West Virginia, the development of a new wallboard plant,” Morris said.

AEP’s capital investments for generation and environmental retrofits in 2006 and 2007 totaled more than $3.8 billion, with a significant portion committed to installing emissions reduction equipment on AEP’s generating fleet in West Virginia and Ohio. In West Virginia, AEP completed installation of flue gas desulfurisation systems, or scrubbers, to reduce sulphur dioxide emissions and a selective catalytic reduction system (SCR) to reduce nitrogen oxide emissions on 1,600 MW of generation at the company’s Mitchell Plant in Moundsville. AEP also installed a scrubber on its 1,300-MW Mountaineer Plant in New Haven. This work totalled more than $1.5 billion and provided in excess of 4,800 temporary construction jobs over the two-year timeline of the projects. Additionally, 121 permanent jobs were added at the two plants, 55 at Mitchell and 66 at Mountaineer.

In Ohio, AEP completed installation of a scrubber on a 600-MW generating unit at the Cardinal Plant in Brilliant. The Cardinal Unit 2 scrubber and associated projects totaled approximately $285 million and provided approximately 1,000 temporary and 56 permanent jobs in the area. Cardinal Unit 2 is owned by Buckeye Power but operated by AEP. AEP is finishing a second scrubber on Cardinal’s Unit 1 that will be operational this spring. Cardinal Unit 1 is owned and operated by AEP.

AEP’s construction program will continue in 2008 as the company moves forward with work already in progress to install emissions reduction equipment at three additional plants. AEP is installing scrubbers on three generating units at Amos Plant in St. Albans, West Virginia, has begun work on a third scrubber at Cardinal Plant, and is installing a new scrubber, upgrading an existing scrubber and installing an SCR at Conesville Plant in Conesville, Ohio. The Conesville Unit 6 scrubber upgrade will be completed in 2008. The new Conesville Unit 4 scrubber and SCR should be on line in 2009. The Amos scrubbers will be completed in 2009 and 2010, and the third Cardinal scrubber (owned by Buckeye Power) will be operational in 2010.

AEP also anticipates finalising approvals and beginning work on its proposed 600-MW baseload coal-fuelled plant in Hempstead County near Texarkana, Arkansas, in 2008. The company recently received construction approval from the Arkansas Public Service Commission for the plant. Other regulatory approvals are pending. AEP continues to work to obtain approval to build two 630-MW Integrated Gasification Combined Cycle (IGCC) clean-coal plants, one in New Haven, West Virginia, and another in Great Bend, Ohio.

“Our vast construction program and associated capital investment will continue well into the next decade. We’ve planned capital expenditures in excess of $3 billion each year through 2010, and as we wind down significant investment in our environmental retrofit program in 2010, we will be ramping up investment in new transmission and in our gridSMART program to modernise our distribution grid and give our customers the ability to actively manage their electricity usage and costs. We also expect to be moving forward with additional new generation construction and retrofit of carbon capture and storage technologies post-2010 to reduce our greenhouse gas emissions and preserve our ability to use domestic coal to generate electricity and keep prices as low as possible,” Morris said.

AEP is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning more than 38,000 MW of generating capacity in the USA.