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

To: Dennis Roth who wrote (1309)	3/16/2008 8:50:42 AM
From: Dennis Roth	Respond to of 1740

AEP plant may need Legislature to step in 3/15/2008 12:53:00 PM STEVE ROBB Messenger news editor athensmessenger.com POMEROY - In the wake of an Ohio Supreme Court decision released Thursday, it will likely take action by the Ohio Legislature for American Electric Power to move forward with a Meigs County power plant project, the company said. The court's decision, which overturned AEP's authority to charge customers for costs associated with the plant, was hailed by the Ohio Consumers' Counsel as a "great victory for Ohio consumers." The court reversed a Public Utilities Commission of Ohio decision that allowed AEP to charge its customers an estimated $23.7 million to fund preliminary research for the proposed construction of the plant that would use Integrated Gasification Combined Cycle (IGCC) clean-coal technology. The court remanded the matter back to the PUCO to allow the commission an opportunity to justify its decision to allow AEP to charge customers for the plant. "We would hope that we can find a way to move forward with bringing this (IGCC) technology and the associated jobs to Ohio," AEP said in a statement issued Friday. "But based on this court decision, it likely won't be possible without legislative assurances that we can recover our costs in a timely manner." Meigs County officials have looked at the proposed AEP plant - and one planned by American Municipal Power-Ohio - as a boon for the county. It's been estimated that AEP's $2.23 billion plant would have 100 to 125 employees, and during peak construction would employ an estimated 1,500 construction and trades workers. In 2006, the PUCO granted permission to AEP to collect $23.7 million from its customers for research and development of the plant, and indicated that AEP would be permitted to recover the construction and maintenance costs from its customers when the plant was completed. The decision was challenged by several groups, including the Ohio Consumers' Council. The court did not order AEP to refund the $23.7 million it has collected for the cost of research and development, but said it may do so pending another PUCO ruling in the case. Electric generation is an unregulated competitive service in Ohio, while distribution of electricity is regulated. At issue in the court challenge was whether AEP could use money collected from customers - the regulated portion of its operations - to pay for a power generating facility, an unregulated activity. The PUCO ruled that it had authority to grant the cost recovery because power generation is ancillary to AEP's distribution of electricity. "The commission's holding blurs the legislative distinctions between electric transmission, generation and distribution," the Supreme Court ruled. "Adoption of its rationale may result in the three functions all being subject to commission regulation, which would negate the legislature's deregulation of the electric-utility industry." AEP argued that Ohio law allows an electric-distribution utility to be involved in building a power plant under the so-called "provider of last resort" requirement to serve customers in its service territory. In remanding the matter back to the PUCO, the court is giving the commission an opportunity to re-examine that issue. Ohio Consumers' Counsel Janine Migden-Ostrander called the court ruling a victory. "Proposals of this magnitude need a fair and open process to determine the validity and necessity of the request and they need to follow the law," she said. AEP said in its statement that it is unclear at this point whether the Ohio Legislature will allow cost-recovery for the project. "This case was brought under Senate Bill 3, and there is significant action currently being taken by Ohio lawmakers to amend Senate Bill 3," the company said. "The Ohio Legislature may not provide the opportunity in new electricity legislation to build IGCC with cost recovery assurances, and we will wait for that outcome before determining whether we can move forward with an IGCC plant in Ohio."