West Virginia questions AEP coal plant retirementsOREANDA-NEWS. May 14, 2015. West Virginia Public Service Commission staff is making a eleventh-hour request to American Electric Power (AEP) to explain its decision to shut several coal plants at the end of this month in compliance with federal mercury and air toxics rule.

AEP's utility Appalachian Power on 1 June plans to shut 1,245MW of capacity at its Clinch River, Glen Lyn, Kanawha River and Sporn plants. AEP's generation arm will retire another 890MW at the Sporn and Kammer plants. The Environmental Protection Agency's mercury rule went into effect on 16 April and AEP has concluded that dispatch economics do not justify costly upgrades at those plants. The planned 1 June retirement date reflects the end of the annual planning period in the PJM Interconnection regional transmission organization.

The retirements have been planned years in advance. But the West Virginia commission staff is questioning why Appalachian Power has not formally asked the state utility regulator for permission to retire those plants and has not provided a justification for its decision.

State agency staff wants the commission to start a formal proceeding to order Appalachian Power to explain the rationale behind the retirement decision. Agency staff wants the commission to order AEP not to take any action at the power plants that would make them permanently inoperable.

AEP most recently informed the state commission of the planned retirements at Glen Lyn, Kammer, Kanawha River and Sporn in February, in a filing detailing progress for conversion of units 1 and 2 at the Clinch River plant to run on natural gas instead of coal. The 230MW unit 3 at Clinch River will shut on 1 June.

But the agency staff argues that a past commission precedent, dating to 1977, requires utilities operating in the state to ask for permission to permanently retire generating facilities. Another retirement decision in 2011 resulted in the state commission asking utility Allegheny Power for information on factors behind the decision.

The commission has until 7 June to make a decision on the staff recommendation.

Appalachian Power today asked the commission to dismiss the staff motion, arguing that the subject of pending retirements has been brought before utility regulators on several occasions in the past four years.

Coal plant retirements in PJM in response to federal mercury rules will total 7.9GW in January-June. Most are in the AEP service territories that cover parts of Indiana, Michigan, Ohio, Virginia and West Virginia. Competition from natural gas in energy markets and insufficient revenues in capacity markets have forced many coal plant owners to retire the oldest part of their fleet rather than comply with the rule.