AEP Says Regulations Could Shut Down 5 plants, Cost 600 jobs

CHARLESTON, W.Va - - American Electric Power said that if all of the federal Environmental Protection Agency's proposed rules took effect, the company would shut down five coal-fired power plants in 2014, retire some others in 2014 or 2015, and convert several from coal to natural gas -- at a cost of 600 power plant jobs.

Although some jobs would be created from the installation of emission reduction equipment, the jobs lost would represent an annual payroll of about $40 million, the company said.

The utility would be required to invest in the range of $6 billion to $8 billion in pollution control equipment through the end of the decade, the company said. That would be on top of the $7.2 billion American Electric Power has invested since 1990 to reduce emissions from its coal-fired power plants, the company said.

Michael Morris, American Electric Power's chairman and chief executive officer, said in a prepared statement, "We support regulations that achieve long-term environmental benefits while protecting customers, the economy and the reliability of the electric grid, but the cumulative impacts of the EPA's current regulatory path have been vastly underestimated, particularly in Midwest states dependent on coal to fuel their economies.

"We have worked for months to develop a compliance plan that will mitigate the impact of these rules for our customers and preserve jobs, but because of the unrealistic compliance timelines in the EPA proposals, we will have to prematurely shut down nearly 25 percent of our current coal-fueled generating capacity, cut hundreds of good power plant jobs, and invest billions of dollars in capital to retire, retrofit and replace coal-fueled power plants," Morris said.

"The sudden increase in electricity rates and impacts on state economies will be significant at a time when people and states are still struggling.

"We are deeply concerned about the impact of the proposed regulations on our customers and local economies," Morris said. "Communities that have depended on these plants to provide good jobs and support local services will face significant reductions in payroll and property taxes in a very short period of time.

"The economic impact will extend far beyond direct employment at power plants as thousands of ancillary jobs are supported by every coal-fueled generating unit," he said.

Company spokeswoman Jeri Matheney could not estimate how many coal mining jobs would be lost if all of the proposed EPA regulations were to take effect.

"While we believe that each plant job creates three spin-off jobs, that's not including coal mining," she said. "There is really a global market for coal now, so I would hesitate to quantify a job loss in coal mining."

Matheney also could not immediately estimate how many tons of coal currently burned by the utility each year would not be used if all of the EPA proposals took effect.

Morris said, "Businesses that have benefited from reasonably priced coal-fueled power will face the impact of electricity price increases ranging from 10 percent to more than 35 percent just for compliance with these environmental rules at a time when they are still trying to recover from the economic downturn."

Bill Raney, president of the West Virginia Coal Association, said, "The overall concern with this is, it's simply a very evident overreaction through the EPA and the Clean Air Act that needs some Congressional attention, quick. The reason is the time frames are so compressed and there's so much to be done.

"If we don't continue to try to make coal better, we're going to forgo the most plentiful, reliable fuel we have," Raney said.

"It seems that all of this is focused on us in Appalachia, in the Eastern United States," he said. "And once again, you have what appears to be a lack of concern for the people of West Virginia as regards the reliability of electricity, the price of electricity, and how the coal miners in West Virginia are so critical not only to the state's infrastructure but to the nation's security."

Sen. Joe Manchin, D-W.Va., said in a prepared statement, "My heart truly goes out to the hardworking men and women who have spent years working at American Electric Power and are now facing an uncertain future. My office is ready and prepared to help these hardworking West Virginians and their families in any way that we can.

"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," Manchin said. "Onerous regulations issued by the EPA are the reason that 242 West Virginians will lose their jobs, and that's simply wrong."

Manchin said he is co-sponsoring a bill that would require Congressional approval of any interim or final federal regulation that costs more than $100 million. He said it is "our urgent mission to rein in the EPA and other bureaucratic agencies.

"As I have long said: Elected officials should be the people who are responsible for making major decisions that affect our economy, not bureaucrats who are unaccountable to any constituents and have never created jobs," he said.

The West Virginia Chamber of Commerce praised Manchin for co-sponsoring the bill that would require Congressional approval of costly proposed regulations. The chamber noted that Manchin is the first Senate Democrat to support the bill.

Last month U.S. Rep. Shelley Moore Capito, R-W.Va., introduced a bill that would require the EPA to take into account jobs and economic activity prior to issuing new regulations.

Capito said Thursday in a prepared statement, "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. Just this past week the EPA fired back and said the agency does run economic analysis when issuing new rules. In this instance, either the EPA did not run proper analysis or the administration knew these rules would cost jobs and increase utility costs and still went ahead anyway. Either way, this is unacceptable."