AEP to retire 6,000 MW to meet EPA rules

American Electric Power, the nation's largest coal-burning utility, said Thursday it plans to retire 6,000 MW of coal-fired capacity, nearly one-quarter of such facilities, to meet proposed clean-air rules from the Environmental Protection Agency. The Columbus, Ohio-based utility said it would also retrofit another 10,100 MW of coal generation and switch 1,070 MW to 932 MW worth of natural-gas capacity.

In addition, AEP said it would build 1,220 MW of gas-fired generation to reduce emissions targeted by pending EPA rules.

AEP, which currently owns about 25,000 MW of coal capacity, said its compliance plan would cost between $6 billion and $8 billion in capital investments through 2020.

The utility said it sent its compliance plan to the North American Electric Reliability Corporation and to the PJM Interconnection and Southwest Power Pool for evaluation.

In addition to permanently retiring 6,000 MW of coal generation, AEP said it would idle between 1,500 to 5,200 MW of such generation for long periods of time to allow for installation of pollution control equipment. That would "abruptly cut generation capacity in the Midwest by more than 5,400 MW," AEP Chairman and CEO Michael Morris said in a statement releasing his company's compliance plan.

AEP's compliance plan comes about a month after the utility shopped a legislative proposal on Capitol Hill to slow EPA's schedule to regulate power-plant emissions linked to smog, climate change and mercury pollution starting in 2015. EPA is also preparing rules to limit power plants' cooling water intake and coal-ash waste.

AEP's legislative fix would have allowed aging coal-fired plants to run through 2020 without penalty while utilities phase in pollution controls or switch to cleaner-burning fuels. But no lawmaker has introduced the measure.