By Tom Doggett
NEW YORK (Reuters) - American Electric Power Co. Inc. (AEP.N: Quote, Profile, Research, Stock Buzz) may shut up to five of its electric generating plants if the U.S. Supreme Court rules against the industry in a pending case that would require expensive pollution fighting equipment to be installed at power plants, the head of the company said on Monday.
The Supreme Court agreed last week to review a lower-court ruling that Duke Energy Corp. (DUK.N: Quote, Profile, Research, Stock Buzz) did not violate clean air laws by modernizing some of its coal-burning power plants without adding new pollution control equipment. The plants would be operating more hours each year.
At the Reuters Global Energy Summit in New York, AEP Chairman and Chief Executive Michael Morris said if the court rules against the industry, then his company would find it cheaper to close plants with a total generating capacity of a few thousand megawatts.
"We have what we consider to be a relatively sophisticated model that tells us (whether) this investment in pollution control activity will add to the benefit of our customers near and long term," Morris said.
"I expect ... that we might be required to shutter some plants earlier than we would like to," he said. "They're 300 or 400 megawatt plants, so it could be as many as four or five plants."
Morris did not specify the plants that would be affected, but said they are located in the company's eastern service area of Virginia, West Virginia, Ohio and Kentucky.
"It's a few thousand megawatts (that would be shut), which of course would put us in a pretty good pinch when you think about going forward we see the need to add 1,200 megawatts in our eastern fleet even today," he said. "So taking away from that would simply augment the problem."
However, AEP's customers would not be left in the dark, because the company would purchase power elsewhere to meet demand, Morris said. Continued...
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