AEP Optimistic About 2017 as it Diversifies from Coal-Fired Power

Researched by Industrial Info Resources (Sugar Land, Texas)--American Electric Power Company (NYSE:AEP) (AEP) (Columbus, Ohio) executives championed the company's regulated businesses in first-quarter 2017, where they believe stronger investments will help AEP navigate an increasingly difficult terrain for coal-fired power. Higher energy prices and improving economic conditions in some parts of the eastern U.S. were unable to offset the effects of mild weather decreased residential sales at AEP. Industrial Info is tracking more than $2.4 billion in active projects involving AEP.

AEP, which owns the largest electricity transmission system in the U.S., is emphasizing investments in its transmission business following its strong performance during the quarter. The company is at work on the $27.8 million Melita Substation in Fort Wayne, Indiana, which it expects to boost reliability in the Fort Wayne area and allow the company to retire an aging site. It also is proposing the $11 million Kalamazoo Substation in Schoolcraft, Michigan, to accommodate a new transmission line, as well as a $9.5 million upgrade to the East Huntington Substation and a $9.5 million upgrade to the Darrah Substation, both in Huntington, West Virginia. For more information, see Industrial Info's project reports on the Melita, Kalamazoo, East Huntington and Darrah projects.

"We are making investments to create a smarter, more resilient and efficient grid that supports the integration of new technologies and cleaner resources to meet the energy needs of our customers," said Nicholas Akins, the chief executive officer of AEP, at the company's annual meeting earlier this week in Charleston, West Virginia. "Over the next three years, we plan to invest $17.3 billion in capital, including $13 billion in our transmission and distribution systems and $1.5 billion in new renewable energy, to help develop the grid of the future."

AEP has been closing older, less-efficient coal plants, sometimes converting them to burn natural gas. The company is performing a $130 million retrofit of Unit 1 and a 235 million retrofit of Unit 2 at Rockport Power Station in Rockport, Indiana, in which selective catalytic reduction (SCR) equipment is being installed on coal opposed-fired boilers from Babcock & Wilcox (NYSE:BW) to reduce nitrogen oxide emissions. Work on Unit 1 is expected to wrap up this summer. For more information, see Industrial Info's project reports on Unit 1 and Unit 2.

Industrial Info also is tracking the $10 million dismantlement and demolition of Unit 2 at the Big Sandy Power Station in Louisa, Kentucky, which is set to be completed in the second quarter of next year. AEP is pulling the plug on a General Electric (NYSE:GE) tandem-compound steam turbine generator and Foster Wheeler (NYSE:AFW) opposed-fired dry bottom boiler, which together generated 816 MW. For more information, see Industrial Info's project report.

AEP has proposed at least four more coal-fired dismantlement and demolition projects, according to Industrial Info's project platform:

• $30 million Kanawha River Power Station closure in Glasgow, West Virginia; see Industrial Info's project report
• $30 million Philip Sporn Power Station closure in New Haven, West Virginia; see Industrial Info's project report
• $30 million Kammer Power Station closure in Moundsville, West Virginia; see Industrial Info's project report
• $20 million Glen Lyn Power Station closure in Glen Lyn, Virginia; see Industrial Info's project report

Akins noted in a quarterly earnings call that the company had made "significant progress" in the first quarter on its efforts to exit the competitive generation business, selling off several coal-fired power plants "sooner than we had anticipated." For more information on the fate of coal-fired facilities in the U.S., including input from AEP officials, see April 20, 2017, article - Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.