American Electric Power says the $2.2 billion coal-fired plant it wants to build in Mason County represents "the cutting edge" of industry technology.
American Electric Power says the $2.2 billion coal-fired plant it wants to build in Mason County represents "the cutting edge" of industry technology.
However, the plant is missing a key element a growing number of experts say is needed: equipment to capture greenhouse gas emissions and pump them underground.
Late last week, the state Public Service Commission approved the AEP proposal. It is the single most expensive utility project in West Virginia history.
In an 85-page decision, the PSC gave the company a stream of cash - through customer rate hikes - to pay off debt incurred building the plant.
Customers could start paying as early as next year. Rate hikes could start at $1 a month in 2009, and eventually reach $7.70 per month.
The PSC rejected calls that it force AEP subsidiary Appalachian Power Co. to add plant equipment to capture carbon dioxide emissions and "sequester" them underground.
"Right now, all we've got is basically a very fancy and very expensive coal plant," said Byron Harris, director of the PSC's consumer advocate division.
Harris opposed the AEP request to pass on costs of the Mason County project to ratepayers before the plant actually goes online. Under the PSC-approved formula, AEP customers could pay $157 million during construction and $116.3 million per year after that to fund the new plant.
The consumer advocate division also argued that it would be cheaper for AEP to build full- or partial-carbon capture onto the plant from the beginning, rather than possibly adding it later.
Coal produces more carbon dioxide emissions per unit of electricity than any other fuel. Coal-fired power accounts for more than a third of the carbon dioxide emissions worldwide.
Across the country, dozens of coal plants have been canceled or delayed, in part because of growing concerns about climate change. Major investment banks, including J.P. Morgan Chase and Morgan Stanley, have begun to look much more skeptically at coal-based power plant projects.
Still, coal provides slightly more than half of the nation's electricity. Many energy experts see little hope that the country can wean itself from that coal power in the near future. So some experts who worry about climate change are pushing "carbon capture and sequestration" as a leading solution.
Publicly, AEP has backed this technology. The Mason County plant is one of two such projects the company has proposed. The other is in neighboring Meigs County, Ohio. Utility regulators in Ohio previously approved that project through a ruling similar to the West Virginia PSC's decision. It is being appealed to the Ohio Supreme Court.
Neither of AEP's proposals includes carbon capture and sequestration.
In the Mason County case, the PSC sided with AEP's argument that adding such technology would be unreasonable until the federal government sets limits for carbon dioxide emissions.
American Electric Power says the $2.2 billion coal-fired plant it wants to build in Mason County represents "the cutting edge" of industry technology.
However, the plant is missing a key element a growing number of experts say is needed: equipment to capture greenhouse gas emissions and pump them underground.
Late last week, the state Public Service Commission approved the AEP proposal. It is the single most expensive utility project in West Virginia history.
In an 85-page decision, the PSC gave the company a stream of cash - through customer rate hikes - to pay off debt incurred building the plant.
Customers could start paying as early as next year. Rate hikes could start at $1 a month in 2009, and eventually reach $7.70 per month.
The PSC rejected calls that it force AEP subsidiary Appalachian Power Co. to add plant equipment to capture carbon dioxide emissions and "sequester" them underground.
"Right now, all we've got is basically a very fancy and very expensive coal plant," said Byron Harris, director of the PSC's consumer advocate division.
Harris opposed the AEP request to pass on costs of the Mason County project to ratepayers before the plant actually goes online. Under the PSC-approved formula, AEP customers could pay $157 million during construction and $116.3 million per year after that to fund the new plant.
The consumer advocate division also argued that it would be cheaper for AEP to build full- or partial-carbon capture onto the plant from the beginning, rather than possibly adding it later.
Coal produces more carbon dioxide emissions per unit of electricity than any other fuel. Coal-fired power accounts for more than a third of the carbon dioxide emissions worldwide.
Across the country, dozens of coal plants have been canceled or delayed, in part because of growing concerns about climate change. Major investment banks, including J.P. Morgan Chase and Morgan Stanley, have begun to look much more skeptically at coal-based power plant projects.
Still, coal provides slightly more than half of the nation's electricity. Many energy experts see little hope that the country can wean itself from that coal power in the near future. So some experts who worry about climate change are pushing "carbon capture and sequestration" as a leading solution.
Publicly, AEP has backed this technology. The Mason County plant is one of two such projects the company has proposed. The other is in neighboring Meigs County, Ohio. Utility regulators in Ohio previously approved that project through a ruling similar to the West Virginia PSC's decision. It is being appealed to the Ohio Supreme Court.
Neither of AEP's proposals includes carbon capture and sequestration.
In the Mason County case, the PSC sided with AEP's argument that adding such technology would be unreasonable until the federal government sets limits for carbon dioxide emissions.
"Uncertainties regarding CO2 legislation and regulation make it more reasonable to wait until such requirements are certain," the PSC said. "By the time CO2 regulation is effective, the advances may change the specific design of the preferred CO2 capture retrofit."
The Boston-based Clean Air Task Force had urged the PSC to require AEP to submit some sort of plan for when and how it eventually would start capturing carbon dioxide emissions.
Mike Fowler, technical coordinator of the group's coal transition project, said such a plan could be modeled after one required of a Duke Energy plant recently permitted in Indiana. Duke Energy was ordered to submit, within six months, a plan for at least starting to capture 15 percent to 18 percent of its emissions. The company also would have to submit a more detailed study of all "feasible and acceptable sequestration options."
The West Virginia PSC rejected Fowler's suggestions.
"The commission will leave it to ApCo to decide precisely when it is economically and legally in a position to retrofit the project to make it carbon capture ready," the PSC ruling said.
On Friday, Fowler said he wasn't really too disappointed with the PSC action.
The AEP plant is still a cutting-edge facility, Fowler said. Turning coal into a gas and then burning that gas produces less of all sorts of air pollution. And, Fowler said, the AEP gasification plant will be much easier to retrofit for carbon sequestration than an old-style coal-fired generating station.
"We think this plant will set an impressive precedent," Fowler said. "We see this step as an important step and the next step is carbon capture."
However, a Massachusetts Institute of Technology report issued last year cautioned that there is a "perverse incentive" for building coal-fired plants - gasification or otherwise - before federal carbon emissions limits are put in place. Existing plants could be grandfathered in, avoiding any such limits, the MIT report said.
Michael Morris, AEP's president, touted his company's Mason County project as a way "we can continue to rely on our nation's and West Virginia's abundant coal resources as a generating fuel with fewer emissions and less impact on our environment.
"It is critical for our nation and the world that we move forward with advanced, cleaner technologies that allow us to continue to use coal for electricity generation," Morris said in a prepared statement.
The PSC also made its support for increasing coal-generated power clear.
"While coal has recently become the whipping boy for environmental ills (and there are clearly some problems in that regard), the fact is that coal reserves are estimated at 250 years, and rail and river transportation systems in this state make coal a reliable and stable source of energy for generating capacity for the project," the PSC ruling said.
"Coal has a future in the energy supplies of the country."
To contact staff writer Ken Ward Jr., use e-mail or call 348-1702.
