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Cost of upgrading retired coal plants would have been 'tremendous:' APCo

Houston — Appalachian Power said this week the cost to upgrade coal-fired units at four power plants in Virginia and West Virginia that were retired in May would have been so high it did not even compile cost estimates for the work.

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In a report filed earlier this week with the West Virginia Public Service Commission further explaining why the Clinch River and Glen Lyn power plants in Virginia and the Kanawha River and Philip Sporn power plants in West Virginia were retired, APCo said it "has not performed any detailed cost estimates because the order of magnitude of the costs was so tremendous."

The utility said that given the age and condition of the units, it was "imprudent ... to have its customers bear such costs, particularly over the comparatively short anticipated lives of any of the conversion [to natural gas] or retrofit projects."

In the filing, APCo said it determined that two options to retrofit the units at Kanawha River to meet environmental rules, primarily the Mercury and Air Toxics Standards rule, would cost from $914/kW to $2,407/kW. Another option that would extend operating the Kanawha River units for five years would cost $486/kW.

In comparison, APCo said "the estimated cost of a new combined-cycle gas-fired plant is approximately $1,000/kW and comes with the added benefits of a 30-year life span, greater efficiency and the ability to provide both capacity and base load energy."

The Kanawha River's two units, totaling 400 MW, started operations in 1953. The four units totaling 600 MW at Philip Sporn came online between 1950 and 1952. Generation at Glen Lyn began in 1918, with three more units added in 1927. Those original four units were retired. Units 5 and 6, totaling 335 MW, came online in 1944 and 1967, respectively, and were retired in May.

Clinch River will be the only plant of the four to remain operating, as two units totaling 484 MW are already undergoing conversion to burn natural gas. Those units are scheduled to start generation in 2016, while its third 250-MW coal unit was retired in May.

APCo initially made the decision to retire the units at the four power plants in 2011 and has since operated the units with the understanding they would be closed soon, meaning the utility has spent less money on the plants "based on the limited remaining useful lives of these units."

"Compliance with the MATS rules would require significant construction work" and would "require any such units to be out of service for many years," APCo noted.

The utility said it would take three years to design and install selective catalytic reduction systems and five years to design and install flue gas desulfurization systems, plus baghouses would likely be required at each facility.

APCo said it has no plans to "mothball" Glen Lyn, Kanawha River and Philip Sporn, or maintain them as a "possible back-up" or "emergency coal-fired plant." The facilities are being decommissioned and dismantled.

American Electric Power, APCo's parent, stopped generation at 10 coal-fired plants across five states in May, accounting for all of its planned coal retirements this year. Combined, coal units in Indiana, Kentucky, Ohio, Virginia and West Virginia generated 5,588 MW, and all burned Central Appalachian or Northern Appalachian coal.

AEP's planned 2016 coal plant retirements include Northeastern Station Unit 4 in Oklahoma, and Welsh Unit 2 in Texas.

The 12 AEP coal-fired plants scheduled to be retired by the end of 2016 generate a combined 6,586 MW.

--Jim Levesque,
--Edited by Valarie Jackson,