By Andrew Restuccia - 06/09/11 07:55 PM EDT
Utility giant American Electric Power said Thursday that it will shut down five coal-fired power plants and spend billions of dollars to comply with a series of pending Environmental Protection Agency regulations.
The company’s dramatic plan to comply with the regulations could give Republicans and moderate Democrats ammunition in their ongoing fight against EPA's efforts to impose new regulations aimed at limiting greenhouse gas emissions and air pollutants including mercury and arsenic.
Rep. Shelley Moore Capito (R-W.Va.) and Sen. Joe Manchin (D-W.Va.) immediately pounced on AEP's announcement.
“This is a perfect example of the EPA implementing rules and regulations without considering the devastating impact they may have on local economies and jobs,” Capito said.
Capito said she will write a letter to EPA Administrator Lisa Jackson asking whether the agency took into account the economic impact of its regulations.
But EPA defended its regulations Thursday, noting that the agency has worked closely with industry to ensure that its regulations are “reasonable, common-sense and achievable.”
The agency also stressed that the regulations are essential for protecting public health.
“These reasonable steps taken under the Clean Air Act will reduce harmful air pollution, including mercury, arsenic and other toxic pollution, and as a result protect our families, particularly children,” EPA said in a statement.
In a statement outlining its plan to comply with EPA's regulations, AEP said it would need to retire 6,000 megawatts of coal-fired power generation in the coming years.
The company, one of the country’s largest electric utilities, estimated that it will cost between $6 billion and $8 billion in capital investments over the next decade to comply with the regulations in their current form.
The costs of complying with the regulations will result in an increase in electricity prices of 10 to 35 percent and cost 600 jobs, AEP said.
In total, AEP estimated it will have to close five coal-fired power plants by the end of 2014. Six additional plants would see major changes, including retiring some generating units, retrofitting equipment and switching to natural gas.
“We support regulations that achieve long-term environmental benefits while protecting customers, the economy and the reliability of the electric grid, but the cumulative impacts of the EPA’s current regulatory path have been vastly underestimated, particularly in Midwest states dependent on coal to fuel their economies,” AEP CEO Michael Morris said in a statement.
The company said its compliance plan could “change significantly” if EPA’s regulations are altered.