AEP VP: Rules Could Cost Customers Or Shut Coal Plants Down

A utility executive says new federal rules could force expensive upgrades to West Virginia’s coal plants or shut them down.

West Virginia is among 22 states seeking to block U.S. Environmental Protection Agency rules in the Eighth U.S. Circuit Court of Appeals. So is Appalachian Power parent American Electric Power.

Last month, Gary Spitznogle, AEP’s vice president of environmental services, told the court that compliance with the wastewater treatment, or Effluent Limitation Guidelines rule could cost $900 million over a decade.

That would cost electricity customers in West Virginia and Virginia $42 to $60 a year, he said.

If AEP does not comply with the rule, it would have to shut down the John Amos and Mountaineer power plants in 2034.

If the company chooses to retire the plants, it must decide by Dec. 31, 2025, Spitznogle said.

Ratepayers in both states have already paid hundreds of millions of dollars for upgrades to the two plants. 

“Retiring these plants because of the compliance obligations of the ELG Rule, just a few years after mandating installation of costly new controls, is a bitter pill for our regulatory commissions and ratepayers to swallow,” Spitznogle wrote.

The West Virginia Public Service Commission approved the ELG upgrades in 2021 with the expectation that the plants remain operational through 2040.

But the state’s coal fleet faces economic headwinds even without the rules in force. A utility analyst recently told the PSC that the AEP Amos, Mountaineer and Mitchell plants lost $87 million in a recent 12-month period.

The Mitchell plant is part-owned by Kentucky Power. Kentucky regulators did not approve the wastewater treatment upgrades for Mitchell, meaning West Virginia electricity customers are paying for them entirely.

The three plants produced less electricity last year than in any year since 2001, federal data show.

Another EPA rule under review in federal court would require the plants to capture their carbon dioxide emissions or shut down in 2032.

Meanwhile, Appalachian Power has asked the PSC for a 17 percent increase in base rates, equivalent to more than $28 a month for the average residential electricity customer.

The PSC has suspended that rate increase until next May, though it is considering other smaller increases the company has sought.

Federal data show that wind and solar are set to overtake coal in U.S. electricity production this year. Natural gas displaced coal as the nation’s top fuel in 2016.