One More Coal Plant Shutting Down

Monday, July 15, 2013 @ 06:07 PM gHale


American Electric Power will close a coal-fired power plant near Beverly, OH, that was on tap for conversion to natural gas.

The Columbus-based utility said Muskingum River Unit 5, with a capacity of 585 megawatts, will stop operating in 2015.

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“Due to the cost of compliance with environmental regulations and current market conditions, AEP has determined that it is unlikely to make the capital investment to refuel the unit,” the company said in a statement.

The company is taking that action at a time when wholesale electricity prices remain low, and Ohio’s power demand has been close to flat.

The Muskingum River plant, located near Marietta, has five coal-fired generating units. AEP’s previous plan was to shut down the first four units, which have a combined capacity of 840 megawatts, and convert the fifth and largest unit to run on natural gas. Now, the company will shutter the entire plant. One megawatt is roughly enough power to serve about 1,000 houses.

As it stands right now, 95 employees will end up affected by the move. The company will spend $150 million to $170 million to cover costs.

If market conditions change, AEP could change its plan, but that is unlikely, a spokeswoman said.

Last month, President Barack Obama proposed rules that would put limits on coal plants. Since then, Akron-based FirstEnergy said it will close two coal plants in western Pennsylvania, citing environmental costs and market forces.

At the behest of state regulators, AEP is moving to a system in which power plants must compete on the open market. As more plants shut down, that leaves fewer to serve the market and increases the chances of higher prices. For now, though, analysts and regulators have said there is plenty of electricity in Ohio to serve current needs.

“We are monitoring these situations and are aware of the announced retirements,” said Todd Snitchler, chairman of the Public Utilities Commission of Ohio.

He said the Ohio Power Siting Board has approved construction of several new natural-gas power plants, while other projects are in the early planning stages.

Those developments “give us confidence that the market is working and that Ohio will continue to have sufficient, competitive energy supply in the coming years,” he said.



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