AEP Increases Natural Gas-Fired Generation Capacity

Following is another news release indicating increased use of natural gas.  As explained previously, natural gas is not a renewable energy source; however, because it produces the least greenhouse gases (GHGs) of the fossil fuels, it is worth paying attention to.  This news release is from an electric utility, American Electric Power.

AEP Increases Natural Gas-Fired Generation Capacity As Newly Constructed Dresden Plant Goes On Line

COLUMBUS, Ohio, Feb. 1, 2012 – American Electric Power (NYSE: AEP) has begun commercial operation of the Dresden natural gas-fired power plant, a nominal 580-megawatt combined-cycle generating unit. The plant, located near Dresden, Ohio, provides 25 permanent jobs and employed more than 800 workers at the peak of construction.

With the start-up of the Dresden plant, AEP has added more than 4,800 megawatts of natural gas-fired capacity to its generating fleet in the past decade. Natural gas accounts for 24 percent of AEP’s total generating capacity.

 “This is another step in the transformation of AEP’s generating fleet as we continue to diversify our fuel mix to improve our environmental footprint and provide economical electricity for our customers,” said Nicholas K. Akins, AEP’s president and chief executive officer. “Natural gas will become an increasing part of AEP’s generating portfolio in the coming decades as a result of the development of shale gas reserves and new environmental regulations, but we continue to believe our company and our nation need a diverse electricity generating portfolio that also includes investment in cleaner coal technologies, nuclear and renewable power.”

AEP purchased the partially constructed Dresden plant in 2007 for approximately $85 million from Dresden Energy LLC, a subsidiary of Dominion. AEP accelerated construction of Dresden in January 2011. Total costs for the plant were approximately $366 million.

The Dresden plant will supply electricity to AEP’s Appalachian Power customers in West Virginia, Virginia and Tennessee.

Power Plant Rule is Delayed

Reuters reports that efforts by U.S. regulators to cut air pollution from coal-fired power plants faced a setback on Friday when a federal appeals court issued a last-minute order delaying their January 1 implementation.

The U.S. District Court of Appeals granted a request to stay the Environmental Protection Agency's (EPA's) Cross-State Air Pollution Rule (CSAPR) pending further court review.

The EPA finalized the rule in July, setting much stricter limits on sulfur dioxide (SO2) and nitrogen oxide emissions from power plants in 27 states to protect the health of residents in states downwind from the emissions.

Power generators said the January 1 implementation date was too soon to allow the design and installation of pollution control equipment to meet the rule, forcing a number of units to shut or to run only part of the time.

The group responsible for keeping the U.S. power grid reliable has warned that the cumulative impact of the EPA's rules could create power problems in Texas and New England.

Proponents of stricter rules say the industry can adapt and maintain that the costs of implementing the rules will be offset by savings from reduced healthcare expenses.

The EPA estimated that the Cross State rule will save up to 34,000 lives, prevent 15,000 heart attacks and prevent 400,000 asthma attacks each year, providing $120 billion to $280 billion in annual health benefits for the nation.

Texas challenged the EPA rule because the state was included in the final version without having an opportunity to provide input on its impact in Texas. State regulators who met later with EPA officials said the agency used faulty assumptions about the state's power grid.

Electric Grid in Texas Faces Multiple Challenges

The following was gleaned from an article in the December 23 New York Times.

Electric Grid in Texas Faces Multiple Challenges

The state’s electric grid operators are coming off a tumultuous year, one they are not eager to repeat. In February, a deep freeze knocked numerous power plants out of commission as equipment broke, causing rolling blackouts across the state. Then the hottest summer on record spurred repeated conservation warnings, as grid managers worked — successfully — to avoid more blackouts.

While experts do what they can to check the skies and the temperature, grid operators are facing a tougher line of questioning about their ability to keep power flowing smoothly. A report last month by the North American Electric Reliability Corporation cited “significant concerns” about whether Texas would have enough power plants in the near future.

Regulators, eager to avoid blackouts at all costs, want to encourage construction of more power plants to meet the needs of a growing state. But consumer advocates fear this could mean higher electricity prices. Environmentalists are lobbying instead for more focus on energy savings.

Environmentalists argue that the strains on the grid should spur Texas to work on energy-saving strategies. In particular, they are pushing a program called demand response, in which businesses and consumers are paid to reduce power at times of high demand, like late summer afternoons.

The utility commission is looking at expanding Texas’s demand-response capabilities next year, helped by the continuing rollout of smart meters.

Robert King, president of the Austin consulting firm Good Company Associates, said two of his energy clients planned on beginning demand-response programs in Texas next year for the first time.

The commission is also considering regulatory changes that should make storing electricity in batteries easier.

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