by Keryn

In the Coal Tattoo blog post which Bill links in his post about AEP's closure of some of its oldest, dirtiest, coal-fired plants, Ken Ward mentions that AEP has been planning to retire these coal plants anyhow.  However, there is a lot more to this equation.  AEP lobbyists are busy on Capitol Hill trying to pass legislation that will delay enforcement of new rules.  AEP is also running a spin campaign to convince the public and legislators that the Clean Air Act is costing jobs, raising electric rates and making the grid unreliable.  And the result is that a bunch of trolls showed up in Ken's comments section to whine about lost jobs and higher electric rates.  If these commenters are actually real people (and not PR company created sock puppets), they've been easily manipulated by AEP's spin campaign designed to get "the public" to run around like Chicken Little squawking about the sky falling.  Public outrage is supposed to influence legislators to pass AEP's "TRAIN Act." Little Mikey Morris is just so cute and clever -- he ties it to his continual bleating about a "trainwreck!"  Go ahead, google AEP + Michael Morris + trainwreck and see how many times he's used that line.

So, let's take a closer look at what's going on here. The Transparency in Regulatory Analysis of Impacts of the Nation Act of 2011, or "TRAIN Act", seeks to spend millions of tax dollars preparing a cost benefit analysis of the EPA's enforcement of the Clean Air Act.  In this article from Reuters, the TRAIN Act  is appropriately labeled "lobbyist mischief."  Just another delay tactic from AEP.  As Bill correctly points out, AEP has had years to clean up their act but chose not to.  Other power companies have smartly planned for the inevitable.  Now AEP is in big financial trouble and is using scare tactics to delay even further.

For a long time, Bill and I have been greatly entertained by the quarterly corporate earnings calls of AEP and their little buddy, the former Allegheny Energy (now part of FirstEnergy).  In these calls, the C.E.O.s and C.F.O.s posture for a bunch of financial analysts and talk out of the other side of their mouths.  Oh, the things they say!  In AEP's April 21, 2011 Q1 2011 earnings call, Mikey takes a lot of heat from the analysts about the EPA rules.  He reveals a whole bunch of stuff that you won't find anywhere else:

1. "We have yet to see the Coal Ash rule, but we continue to work with our colleagues on the whole notion that we hope it doesn't come out with the absolute hazardous-waste designation. And we will wait for that to happen whenever the EPA decides to come to that conclusion."  (Warning -- the next spin campaign in the making!)
2. Mikey admits that they are conspiring with their "allies" in the unions to argue for more delay.*  What part do the unions play?  They tell union members that tons of jobs are at stake in order to wind them up and set them in motion to do stuff like troll Ken Ward's blog.  These guys don't know how they're being jerked around, but Mikey and his "allies" are doing it in order to remedy AEP's "issue."  "When we look at the environmental activities, our goal will be to constantly strive for compliance at the end of the day. But the end of the day can be on the current time line that the EPA's orders have issued. That's an issue for us. It's an issue for our states. It's an issue for most of the generation fleet throughout the United States. So we, along with our allies of the other coal-based utilities, our state commissions, our elected officials, as well as our friends in the union and in [indiscernible] Can know much broader sense, we'll continue to argue for a more realistic time line. We don't think that the one year that the EPA could assign to this, as well as the one year that the President could assign to this is even an adequate extension of time to get this done in an orderly fashion. And that will continue to be our advocacy in front of the EPA when we make our comments, but also working with Democrats and Republicans in the House and the Senate to try to the bring some rational approach to that."
3. AEP has been planning to retire these plants because they are less efficient:  "And lastly, the fully exposed plants. We've been quite clear that we fully intend to retire to the 5,480 megawatts of our overall coal fleet because they are less efficient and have not been retrofitted in any particular way."
4. AEP is planning to replace retired plants with combined cycle gas facilities. 
   
5. AEP thinks these retirements will benefit their capacity fees and off-system sales in the future.
6. Mikey thinks the government will come to the realization that his delay is necessary.
7. An analyst's contention that these rules have been coming for years is "poppycock."  Poppycock?  He actually said that?  LOL
8. AEP will be replacing the 6,000 megawatts of retired plants with somewhere between 1,000 and 2,000 megawatts of gas plants.  This is because the retired plants are currently operating only 20 - 30% of the time.
9. AEP needs to install the new combined cycle gas facilities anyhow to supplement their intermittent renewables, like wind.  The retired plants wouldn't be able to do that.
10. The retirements won't cause any real reliability problems.  Mikey plans to make up for that with lots more new transmission!
11. Unemployment rates are going down.  People are getting jobs!
12. The retirements are good for AEP's shareholders.

There's lots more -- I urge you to read the transcript and the Q&A yourself.

So, AEP thinks their spin campaign will successfully delay the EPA rules, and even if it doesn't, the retirements really aren't having a negative impact.  This isn't what Mikey says in the press about his "trainwreck," is it?  Mikey adjusts his facts to suit his audience, doesn't he?  Who would ever believe that what Mikey says is anything other than "poppycock"?

And one final thought... if we added up all the money AEP is putting into lobbying efforts and spin campaigns in order to gain a delay; added in the millions of dollars the TRAIN Act is going to cost the taxpayers; added in the increased health care costs to the public if the Clean Air Act is delayed, what would the total be?  A lot more than it would have cost AEP to plan smarter years ago.  Lack of planning on their part shouldn't become our problem.  AEP should be using its money to comply with the regulations, instead of throwing it away on dumb spin campaigns.

You can read more about AEP's "issues" here.

*Here's a Wall Street Journal article that sheds more light on AEP's "allliance" with the unions to spin the "job loss" propaganda.

"At the same time, a delicate alliance has emerged between the unions and companies wary of the EPA. In February, representatives of the Boilermakers union and the IBEW met in Washington with Mike Morris, the CEO of American Electric Power Co. AEP, of Columbus, Ohio, is one of the nation's top coal burners and stands to be among the companies hardest hit by tougher EPA rules.

In January, Mr. Morris met with the president of the IBEW, Ed Hill, and the new chairman of the House Energy and Commerce Committee, Fred Upton, (R., Mich.).

Rep. Upton, who has introduced legislation to strip the EPA of its authority to regulate greenhouse-gas emissions, said in an interview that AEP's Mr. Morris requested the meeting, and that the three discussed concerns about the impact of new EPA regulations."

*And here's a NYTimes article about the union's role in AEP's spin campaign.  Compare the exaggerated numbers in this article with the ones in later claims.  I'm starting to think they're just making these numbers up, ya think?

"The International Brotherhood of Electrical Workers said today that it is backing American Electric Power Co. Inc. (AEP) as it lobbies Congress to give utilities an extra five or six years to clean up or shut down their oldest coal plants.

Tens of thousands of union jobs are at stake, but EPA cannot do anything about it, IBEW President Edwin Hill said in a statement."