CHARLESTON, W.Va., Dec. 18, 2012 – Appalachian Power filed applications today with commissions in Virginia and West Virginia seeking approval to transfer certain generating assets from Ohio Power to Appalachian Power. In Virginia, the filing also included a proposal to merge Appalachian Power with Wheeling Power, which serves two counties in the northern panhandle of West Virginia.
Related filings with the Federal Energy Regulatory Commission (FERC) were made on Oct. 31, 2012. The Virginia State Corporation Commission and the West Virginia Public Service Commission as well as FERC must approve the requested transfers and the merger. The company requested the changes become effective Jan. 1, 2014.
Appalachian proposes to acquire 50 percent or 780 megawatts (MW) of the two Mitchell Plant units in Moundsville, W.Va., and the remaining two-thirds of Unit 3 or 867 MW at Amos Plant in Winfield, W.Va. (the only portion of that plant not already owned by Appalachian). These two acquisitions will add 1,647 MW of capacity to Appalachian’s generating fleet.
Appalachian Power has purchased power for many years from these plants as part of a generation pooling agreement with other AEP companies.
“We already purchased power from these same units, so basically, we will move from being a renter to an owner, with all the benefits of ownership,” said Appalachian Power President and COO Charles Patton. “It is the best way for us to cost effectively increase energy capacity.”
Although not part of today’s filing, Appalachian Power is also considering converting Units 1 and 2 of its Clinch River Plant to natural gas at approximately the same time as it plans to retire Clinch River Unit 3 and its Glen Lyn, Kanawha River and Sporn units.
Patton said the proposed acquisitions and conversions are part of the company’s strategic plan to minimize increases in generation costs and stabilize prices for customers.
The decision to acquire the Amos and Mitchell units was determined to be the least cost alternative for meeting Appalachian Power’s needs over the long term. The company can acquire the units for approximately $700 per kilowatt, compared with $1,250 per kilowatt to build a natural gas combined cycle plant, or upwards of $3,000 per kilowatt for a coal-fired plant.
As a result of the proposed transfers and retirement and conversion plans, Appalachian expects to have sufficient generation to meet current and near-term needs.
Appalachian Power has approximately 1 million customers in Virginia, West Virginia and Tennessee (as AEP Appalachian Power). It is a unit of American Electric Power, one of the largest electric utilities in the United States, which delivers electricity to more than 5 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined.