Ohio regulators approve AEP plan to retire 1,500 MW of coal generation

Dive Brief:

Ohio regulators have approved a settlement reached late last year, providing for American Electric Power to decommission 1,500 MW of coal-fired capacity while building 900 MW of clean energy resources.
Some coal capacity will be converted to burn natural gas. AEP will sign eight-year power purchase agreements to support 2,671 MW of generation the utility says is essential for reliability, but at risk for retirement.
The settlement includes job revitalization efforts as well, giving preference for solar projects to be developed in Ohio’s Appalachian region, where well-paid energy jobs are needed.

Dive Insight:

Ohio regulators have formally approved a settlement designed to shift the direction of the state's energy future while shoring up resource issues related to struggling coal plants. Announced in December of 2015, the agreement marked a stark reversal from AEP's efforts to keep the generation online.

As previously reported, the deal calls for AEP's power purchase agreements would end in 2024, and covers generation from nine AEP generating units — Unit 1 at the Cardinal coal plant, Units 4-6 at the Conesville plant, Units 1-4 at the Stuart plant and Unit 1 at Zimmer. Power purchase agreements would also cover the utility's 423 MW contractual share of Ohio Valley Electric Corp. generation.

In exchange, the utility would convert Units 5 and 6 at its Conesville plant to co-fire natural gas by the end of next year and retire or repower those units to use only natural gas by the end of 2029 and 2030, respectively.

“We’re pleased to see that AEP will be moving forward, in partnership with private industry, to develop a significant amount of clean energy for Ohio,” Dan Sawmiller, a senior campaign representative for the Sierra Club, said in a statement. “This stipulation was difficult to put together, and we’re happy to see that PUCO is showing its support for a clean-energy plan that moves Ohio forward.”

Among the settlement's goals, the state wants to make its Appalachian region a solar manufacturing hub with the potential for hundreds of jobs. The project will be competitively bid and will require partnership with private industry to develop a large-scale solar facility with focus on employing Ohio military veterans.