Roanoke, Va., May 29, 2013 – Today Appalachian Power requested approval from state regulators to convert a portion of the existing Clinch River Plant in Russell County to operate with natural gas. Changing two of the three generating units from coal-fired to natural gas-fired is the least-cost alternative to meeting customers’ power needs, positively supports the local economy and reduces emissions.
“For more than 50 years three generating units at the Clinch River Plant have served Appalachian’s customers well,” said Charles Patton, Appalachian Power president and chief operating officer. “However, they are not equipped to meet recently approved and anticipated environmental requirements and must shut down. Converting two of the Clinch units to natural gas and retiring the third is the best alternative to meet energy needs, taking into account economic and environmental considerations and diversifying the company’s power plant fleet.”
In the Virginia filing, Appalachian asks the State Corporation Commission (SCC) to allow the company to proceed with the conversion. It is expected to cost about $65 million, with cost recovery expected in a future rate proceeding. If approved, this portion of the project would cost a residential customer using 1,000 kilowatt-hours a month less than 50 cents a month once the units are operational.
Another aspect of the project involves extending a natural gas pipeline to serve the plant. The pipeline will be constructed, owned and operated by a third party. The total project will cost substantially less than constructing a new combined-cycle natural gas plant or a combustion turbine peaking unit. The company’s application demonstrates that not only is the conversion the least-cost alternative, but compared to the permanent retirement of all three units, the conversion provides jobs and tax benefits for the Commonwealth and local communities.
If approved, the project is expected to generate the equivalent of 267 short-term jobs and 117 long-term jobs in Virginia. The project is expected to generate nearly $1 million in taxes for Russell County annually.
Appalachian seeks approval of the request by February to enable the company to meet construction deadlines in 2015 and 2016. The company also today requested approval for the conversion from the Public Service Commission of West Virginia. The natural gas units are expected to be operational in 2016. When complete, the two units will have the capacity to generate 484 megawatts (MW) of electricity. Currently, the three existing units can generate 705 MW.
Conversion of the Clinch River Plant is part of an overall effort to meet Appalachian Power customers’ future energy needs. Four existing power plants operated by Appalachian Power in Virginia and West Virginia will close by mid-2015. In a separate request with the SCC, the company seeks to add low-cost generating capacity from two other West Virginia power plants to its fleet. Last year the company added a natural gas-fired plant in Dresden, Ohio, to its fleet. Once these changes are complete, the company’s fleet of power plants will be more diverse with 69 percent powered by coal, 19 percent powered by natural gas and 12 percent powered by hydro and wind.
Appalachian Power has about 1 million customers in Virginia, West Virginia and Tennessee (as AEP Appalachian Power). It is a unit of American Electric Power, one of the largest electric utilities in the United States, which delivers electricity to more than 5 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined.