Dive Brief:

• American Electric Power (AEP) still produces more than half of its electricity from coal, but the company's CEO said at the Edison Electric Institute's annual meeting Tuesday that the Clean Power Plan, combined with large-scale renewables, could transform the industry.
• The plan, said CEO Nick Akins, could be the "catalyst for the transformation that’s already occurring in our industry," Columbus Business First reports. 
• The company recently announced its capital expenditures plan, with a focus on its regulated subsidiaries and indicated it would bring online almost 9,000 MW of renewable energy in the next decade.

Dive Insight:

While many large coal users are opposing the Obama Administration's Clean Power Plan, which is aimed at reducing 32% of greenhouse gas emissions nationawide by 2030, AEP's chief this week acknowledged the new emissions mandates could be the driving force behind the industry's modernization.

Columbus Business First reports Akins told EEI participants, “utility-scale solar can really address the needs of the Clean Power Plan and other objectives that we have. ... We believe that it can be, if done wisely and rationally, a catalyst for the transformation that’s already occurring in our industry."

For a company still relying on coal for more than half of its power production, that is a big admission. But while Akins apparently acknowledged his comments may surprise some, they are largely in line with the new direction the company appears to be taking.

AEP has announced a capital spending program targeting $13 billion in investments from 2016 to 2018, with about 96% aimed at its regulated businesses. The company will invest at least $5.7 billion in its transmission businesses over the next three years through AEP Transmission Holding Co. and AEP’s regulated utility operating companies. And the utility plans to add more than 5,500 MW of wind and almost 3,000 MW of solar, with the bulk of that generation expected online by 2025.

AEP will also grow the role of gas on its system, bringing on almost 3,000 MW from 2020 to 2027.

And the company recently invested $5 million in Greensmith, a Maryland-based company that offers software to operate and manage energy storage systems. The move signals a strategy shift for AEP, which was one of the first utilities to test energy storage in the last decade.

Akins's comments mirror those given by John McManus, AEP's vice president of envrionmental services, at the annual meeting of state utility regulators in Austin, Texas this week. During a panel discussion on how to preserve baseload power under the Clean Power Plan, McManus told the audience that with or without the federal regulations, low gas prices and the falling cost of renewable generation mean utilities need to reevaluate their grid operations and generation fuel mixes for the 21st century.