Big Sandy Unit 2 Retirement Part of AEP s Environmental Compliance Plan
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1 Big Sandy Unit 2 Retirement Part of AEP s Environmental Compliance Plan January 2015
2 AEP s environmental stewardship AEP is an environmentally responsible company. It supports regulations that achieve long-term environmental benefits while considering the impacts on customers, the economy and system reliability. AEP supports environmental regulation that is approached in a coordinated, realistic and costeffective manner. AEP does, and will continue to, comply with all environmental regulations. 2
3 Ongoing air quality improvements AEP has improved its environmental performance. Since 1990, AEP has reduced its NOx and SO 2 emissions by 80%. Mercury emissions have declined by nearly 60 percent since Between 2005 and 2013, AEP reduced its carbon dioxide emissions by 21 percent, exceeding President Barack Obama s Climate Action Plan target of achieving a 17 percent reduction by 2020 AEP will continue to improve the environmental performance of its power plants. 3
4 AEP s Power Plant Retirements By early 2016, AEP will retire more than 6,000 megawatts (MW) of coal-fired generating capacity at 11 power plants in seven states Unit 2 of AEP s Big Sandy Plant near Louisa, Kentucky is one of the units included in this retirement plan. The plant will officially be retired in mid-2015 The retirements are part of AEP s plan for complying with the Mercury Air Toxics Standards for existing power plants that were approved by the U.S. Environmental Protection Agency in December 2011 To meet compliance deadlines for new environmental regulations, AEP expects it will need to invest $3 billion to $4 billion 4
5 Big Sandy Plant Big Sandy s 260 MW, Unit 1 went on line Its cooling tower was the first natural-draft cooling tower in the Western Hemisphere Kentucky Power plans to retire Unit 1 and convert it from a coal-fired unit to a natural gas-fired unit After the conversion, the Unit will have a generation capacity of approximately 268 M. Unit 2 went on line in 1969 and was the first in a series of five 800 MW units installed on the AEP System in a four-year period Unit 2 will be retired from service to comply with new environmental regulations 5
6 Decommissioning AEP has developed formal plans to decommission Big Sandy Unit 2 in a responsible manner that will safeguard the local environment AEP and Big Sandy management will work with the Kentucky Department of for Environmental Protection and other organizations to ensure that the Unit is decommissioned in compliance with all applicable regulatory requirements When we complete decommissioning, the facility will be retired-in-place pending future decisions on demolition and site redevelopment If appropriate, we will work with community leaders and local development commissions to determine whether all or part of this site can be redeveloped 6
7 Overall impacts to employees and communities AEP is implementing a plan to assist the xx employees affected by Unit 2 s retirement in finding positions at other unaffected facilities. Whether they choose to retire, find other employment within the AEP system or to leave AEP, the company will provide resources and services to assist them Big Sandy Plant s contribution to the local economy: Annual Payroll -- $9.2 million (both units 2013) Payroll Taxes -- $1.4 million (both units 2013) Net reduction in property tax payments (reflecting retirement of Unit 2; re-investment in Unit 1) = $409,000 7
8 Leaving a Legacy Big Sandy employees have taken great pride in providing electricity while protecting air and water quality, recycling materials and maintaining an exemplary record of public and work safety. The plant and its employees have been a part of the local community for more than 50 years. We thank the leaders and citizens of Louisa for the opportunity to live and grow with them. We look forward to continuing our relationship as the conversion of Units 1 is completed and the plant is re-commissioned. 8
9 For more information Additional information, fact sheets, FAQs, photos and brief videos are available at: 9
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