David Celona, AEP’s vice president of external affairs, said Friday the company will file reports with the Public Utilities Commission of Ohio and the Ohio Environmental Protection Agency relating to the status of the company’s announced plans to locate an Integrated Gasification Combined Cycle plant in Lebanon Township.
The status, he said, remains the same. Plans are on hold, but the company remains hopeful the plant can be built here.
Plans for the project have been placed on hold repeatedly, due to cost recovery issues, construction costs and regulatory issues. However, Celona said, AEP has not changed its plans, and still hopes to build here.
“Given the state of the economy, AEP will not proceed on construction in the near future, but is still very interested in the project,” Celona said. “Nothing has changed.”
AEP placed construction plans on hold two years ago, when the initial engineering study placed costs of construction at over $2 billion. In the meantime, commodity costs, such as those for building materials and fuel, have gone down, Celona said.
“The good news is that construction costs have gone down,” Celona said, “but given where the economy is today, it is not feasible to plan construction now.”
In July 2008, AEP Ohio President Joe Hamrock said the company was waiting on results of the state’s electric utility deregulation before moving forward on the plant. Senate Bill 221 was signed into law last year, but the legislation left questions about whether utilities are allowed to recover costs for construction of new generating facilities. Without cost recovery allowances, AEP cannot build here, Hamrock said.
The state of West Virginia has approved construction of an IGCC plant in Mason County. It would be identical to that proposed for Meigs County. Virginia, on the other hand, denied the company’s application for construction, due primarily to cost recovery issues, Celona said.
Originally, AEP hoped to begin commercial operation of the plant next year. Now, Celona said, the company hopes to at least announce construction plans by 2011.