Mountaineer pilot plant

American Electric Power (AEP) had originally proposed to build two integrated gasification combined cycle (IGCC) coal plants in the West Virginia/Ohio area. The Mountaineer IGCC plant would have been built next to the existing Mountaineer Plant along the Ohio River in Mason County, West Virginia. It would be essentially the same as the Great Bend IGCC plant proposed for Meigs County, Ohio.

In Oct. 2006, AEP filed an air permit application with the state Department of Environmental Protection. In Jan. 2007, AEP announced it would delay building the plants for six months due to rising material and labor costs. In Feb. 2007, the West Virginia Department of Environmental Protection estimated a draft permit would be released in two to three months. On June 18, 2007, AEP filed an application with the state Public Service Commission; hearings on this application began Dec. 5.

Project costs have risen from $1.2 billion to $2.2 billion, and AEP wants ratepayers to pay for part of this increase; at hearings, consumer advocate groups have argued against the project. During a licensing hearing on Dec. 10, AEP agreed to potentially cap construction costs.

In April, 2008, the West Virginia State Corporation Commission (SCC) rejected the plant in West Virginia as well as a rate hike to help pay for it. The SCC said that AEP's cost of $2.33 billion, which had not been revised since November, 2006, and was therefore "not credible."

In December 2008, AEP applied for a Class 5 Underground Injection Control Permit from the West Virginia DEP. If approved, the permit would allow AEP to inject and permanently store carbon dioxide through injection wells into the subsurface located in Mason County.

In August 2009 AEP announced that it is seeking $334 million in federal stimulus funds for the Mountaineer plant to become the site of the nation's first commercial-scale carbon dioxide capture and storage system. The project would go online in 2015. AEP proposes that the commercial-scale project would capture 90 percent of the CO2 from 235 megawatts, or about 20 percent of the plant's 1,300-megawatt capacity, and would again inject it underground. AEP applied to the U.S. Department of Energy (DOE)'s Clean Coal Power Initiative, which according to the DOE Web site is offering up to $1.4 billion to applicants who will share at least 50 percent of the cost of their projects.

To recover the costs AEP proposes that West Virginia electricity rates will increase by approximately 12% by 2012.

In December 2009, AEP was awarded a $334 million grant from the Department of Energy for a commercial scale project that will capture carbon from its Mountaineer plant.

On July 14, 2011, American Electric Power said it had decided to table plans to build the full-scale carbon-capture plant at Mountaineer, saying they did not believe state regulators would let the company recover its costs by charging customers, thus leaving it no "compelling regulatory or business reason to continue the program." The federal Department of Energy had pledged to cover half the cost, but AEP said it was unwilling to spend the remainder in a political climate that had changed strikingly since it began the project. A senior Obama administration official said that the A.E.P. decision was a result of the political stalemate on climate change legislation, which failed to pass the Senate. Public service commissions of both West Virginia and Virginia turned down the company’s request for full reimbursement for the pilot plant, operating since 2009. West Virginia said earlier in 2011 that the cost should have been shared among all the states where AEP does business; Virginia hinted in July 2010 that it should have been paid for by all utilities around the United States, since a successful project would benefit all of them.

Concerning AEP's statement that costs could not be passed along, West Virginia journalist Ken Ward noted: "It's not exactly true that utility commissions aren’t allowing companies to pass costs of projects like this on to consumers... The West Virginia PSC allowed AEP rate hikes to cover our state’s share of the costs. Virginia regulators seemed willing to do the same. James Fallows of The Atlantic wrote: "This is the kind of project that (was) the best and urgently necessary hope to allow the US, China, and other countries to keep using coal ... while reducing carbon emissions.

Project Details
Sponsor: Appalachian Power Company (American Electric Power) Location: Mason County, West Virginia Capacity:  629 megawatts Type:  Integrated gasification combined cycle (IGCC) Projected in service:  N/A Status:  Cancelled

Financing

 * Citibank
 * JP Morgan Chase
 * Goldman Sachs
 * Lehman Brothers

Citizen Groups

 * West Virginia Sierra Club, Karen Grubb, kgrubb [at] fairmontstate.edu
 * Appalachian Voices, outreach [at] appvoices.org
 * West Virginia Environmental Council, Chuck Wyrostok, wyro [at] appalight.com

Related SourceWatch Articles

 * Great Bend IGCC
 * Mountaineer plant (existing)
 * Coal plant litigation
 * West Virginia and coal
 * United States and coal
 * Carbon Capture and Storage
 * Carbon Capture and Storage demonstration projects worldwide
 * Carbon Capture and Storage in the United States
 * Existing U.S. Coal Plants
 * US proposed coal plants (both active and cancelled)
 * Coal plants cancelled in 2007
 * Coal plants cancelled in 2008
 * State-by-state guide to information on coal in the United States (or click on the map)