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Gold/Mining/Energy : Gasification Technologies -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (530)	12/28/2006 7:31:12 AM
From: Dennis Roth	Respond to of 1740

Billion-dollar plant's costs are escalating by George Hohmann Daily Mail business editor dailymail.com American Electric Power's Appalachian Power subsidiary said higher-than-expected costs have caused it to delay issuing a revised estimate for the next-generation, coal-fired power plant it wants to build in Mason County. The company said earlier this year the plant would probably cost about $1 billion. It promised to provide a more detailed cost estimate by the end of this year. But in a letter hand- delivered on the day after Christmas to its regulator, the state Public Service Commission, the company's lawyers said it wouldn't be able to provide the estimate at this time. "The latest cost information is turning out to be higher than we anticipated so we're looking at things that can be done to bring costs more in line with our cost goal." Appalachian Power spokeswoman Jeri Matheney said today. "We're asking for an extension in the due date. They (the Public Service Commission) knew this because we've been talking to them. But we had made a commitment that we would have it filed by the end of the year so we thought we should put this in writing. "What we've found out is, part of the higher cost is from the construction market -- concrete, steel, labor -- the regular things you have in construction," Matheney said. "It's also the first time a plant of this type has been built to commercial scale." The company previously estimated the cost of the first commercial-scale Integrated Gasification Combined Cycle power plant would be about 20 percent higher than the cost of building a conventional coal-fired power plant. "We are still saying that (20 percent)," Matheney said. "We're really trying to get our costs in line with that estimate." The company has repeatedly said it will only build such plants in states where regulators allow it to recover its costs. That means ratepayers would have to pay increased rates. The company has filed an application to build a similar plant in Meigs County, Ohio, across the Ohio River from New Haven. "We need to have cost recovery," Matheney said. "That's why we need to file the information with the Public Service Commission. They certainly need to have clear information on what the plant is going to cost before they proceed." In its letter to the Public Service Commission, the company said it "intends to make a filing in this case in January, explaining developments and new expectations and requesting additional tolling. . ." Matheney said "tolling" is another word for delay. Gov. Joe Manchin vowed in 2005 that he would "leave no stone unturned" to convince the company that it should build a coal gasification plant in West Virginia. In January, during his State of the State address, Manchin announced that American Electric Power had filed a request with the Public Service Commission for permission to build a plant next to its Mountaineer plant at New Haven. "Bringing an IGCC plant to West Virginia is part of my overall plan to ensure the future of coal in West Virginia, and Appalachian Power has said it is committed to working with my administration on our coal conversion initiatives," Manchin said during his State of the State address. Integrated gasification plants convert coal into gas that is burned in turbines to power electric generators. The process decreases emissions of nitrogen oxide, sulfur dioxide, particulates and mercury. Mike Morris, AEP's chairman, president and chief executive officer, said here in October that his company believes the answer to increasing base load-generating capacity without aggravating global warning is to build plants using coal gasification technology. "We feel it's critical to move forward with Integrated Gasification Combined Cycle," Morris said during his keynote speech at Concord University Foundation's fundraising dinner here. In a meeting with analysts in New York City prior to his speech here, Morris said the process of getting the regulatory and legal authority to build the integrated gasification plants "is taking longer than we'd like -- at least longer than I'd like. And arguably longer than our customers can really afford and longer than the instate regulators can afford." "But in law school they taught me a lot about due process," he told the analysts. "Sometimes it seems like doodle process. But, nonetheless, it's going to take some time and we're reflective of that as we go." American Electric Power has said it needs 1,200 megawatts of additional generating capacity in the eastern United States by 2010. Because of regulatory delays, the company will probably have to purchase some of the electricity it needs between 2010 and 2012 or 2013, when the integrated gasification plants are now expected to begin operating, Morris said in October. "That's not the best thing for our company, our customers or the people of West Virginia," he said. Morris noted the proposed Mason County plant will require approval from both the West Virginia Public Service Commission and Virginia state regulators, as well as from the West Virginia Department of Environmental Protection and the U.S. Army Corps of Engineers. American Electric Power's Appalachian Power subsidiary serves about 500,000 customers in southern West Virginia and about 500,000 in Virginia. Contact writer George Hohmann at business@dailymail.com or 348-4836.

To: Dennis Roth who wrote (530)	1/22/2007 6:14:44 AM
From: Dennis Roth	Read Replies (2) \| Respond to of 1740

AEP’s clean-coal plant delayed Utility seeks six more months before starting work in Meigs County Friday, January 19, 2007 Paul Wilson THE COLUMBUS DISPATCH columbusdispatch.com American Electric Power will delay building a clean-coal plant in Meigs County for at least six months and wants to do the same at a twin project in West Virginia. Both 629-megawatt plants would use technology considered crucial to address global warming and growing energy demands. But studies of the two sites along the Ohio River found that the projects would cost more than AEP expected, because of rising steel, concrete and labor costs, the utility said. Last week, AEP told Ohio officials about the delay and also requested extra time in West Virginia, where an extension is subject to regulatory approval. Still, the Columbus-based utility said the projects, slated to go online between 2010 and 2015, aren’t in jeopardy. "We’re still totally committed to the technology," spokesman Pat Hemlepp said. "We’re still totally committed to the projects." The original price tag for each plant was $1.3 billion, about 20 percent more than the cost of an operation without clean-coal technology, Hemlepp said. Studies of the sites found the gap could be wider. AEP, working with project designers Bechtel Corp. and General Electric Co., wants more time to study ways to cut costs, Hemlepp said. The extra time won’t cost ratepayers more, AEP said. But the findings are important in determining how the projects will be paid for. In Ohio, the Public Utilities Commission allowed AEP to charge customers $24 million to study the Meigs County site last year. The PUCO wanted to see the findings before ruling on whether AEP could charge customers to build and run the plant. AEP’s delay shows state regulators acted correctly in not granting AEP’s full request, PUCO Chairman Alan Schriber said. Several groups appealed that ruling to the Ohio Supreme Court, including the state Office of Consumers’ Counsel. Janine L. Migden-Ostrander, leader of that group, disagreed with Schriber, saying AEP’s delay "confirms our concerns." "What the utility is saying is, ‘We don’t want our shareholders to take the risk, but we want the hard-working residential customer to pay for this,’ " she said. The new plants would strip away pollutants that create smog, soot and acid rain. They also could be retrofitted to capture carbon dioxide, a gas linked to global warming. "If we don’t do (clean-coal) plants, then the opportunity for economic growth becomes far more limited if we are also going to address global warming," said Robert Burns, a researcher at the National Regulatory Research Institute at Ohio State University. About 150 coal-fired plants are in various stages of development in the United States. About two dozen would use clean-coal technology, Burns said. AEP has a mixed environmental past. But pursuit of clean-coal technology is part of a "practical and progressive" strategy for the utility, Burns said. paul.wilson@dispatch.com