Virginia refuses to compel AEP’s customers to share in new coal plant’s construction costs
From Energy Central comes this gem of double speak from AEP Chairman Michael Morris, who, as the article notes …
… has staked AEP’s plans for future generating capacity on Integrated Gasification Combined Cycle or IGCC technology.
Morris’ concern is that coal isn’t sufficiently loved. Why? Because regulators need more
“Collectively we have an educational challenge to help the body politic understand that coal has to play in the message for cost-effective electricity necessary to fuel economic growth.”
Any guess why might they think that coal isn’t cost-effective? Well, for starters:
The Virginia State Corporation Commission turned down a request to have AEP’s Virginia customers share the construction cost of the company’s proposed IGCC plant in Mason County. The commission said AEP’s $2.23 billion cost estimate dates back to 2006 and is not credible.
That’s this coal plant, the one that checked in at $3,700/kW. Even if it were credible, it would require a massive rate increase, which is why the problem isn’t that AEP can’t build the plant, it’s that Virginia refused to compel AEP’s customers to share in the construction costs. Nice euphemism there, ain’t it? I build something stupid, force you to pay for it so that I can reimburse my shareholders, and we call the whole thing “sharing.” Cute. Maybe later you can give me your ATM card and we’ll share some withdrawals.
It gets worse.
Among the things that government has horribly screwed up on the coal-policy front:
Morris said he doesn’t want to stir a controversy but the federal Department of Energy made an “absolutely silly decision” in January when it scrapped FutureGen, a next-generation, coal-fired plant that was to have near-zero emissions.
Zero emissions and, let’s not forget a $6,500/kW price tag — which I suppose has the advantage of making AEP’s Virginia project look cheap, but other than that is, tautologically, the opposite of Cheap Coal.
So who might be an appropriate target for
ACCCE-funding of whoever is running against them education?
“I think the Democratic leadership in Washington is much more inclined to believe there’s an easy answer here,” Morris said. “I carve out Rick Boucher (D-Va.) and some others. He’s probably the most informed member of the House. He understands the challenge and is working diligently to prepare the nation for a cap-and-trade program and carbon capture and storage.”
“I would argue Sen. (Jeff) Bingaman (D-N.M.) understands,” Morris said. “But Sen. (Harry) Reid (D-Nev., the Senate Majority Leader) believes we can do this (meet the nation’s energy needs) by improving efficiency and using solar energy. House Speaker (Nancy) Pelosi (D-Calif.) thinks it can be done magically and by efficiency and other things.
Ah, magic. The stuff that actually works and doesn’t require customers to “share” in cost over-runs. For goodness sake, let’s not do that.
Overall though, it’s hard not to take this all as a positive sign. Clinging to federal-funding for $6,500/kW boondoggles and whining about the fact that ratepayers won’t underwrite your $3,700/kW version is hardly the sign of an industry that’s got a lot of aces left to play.