AEP making cuts in Beverly
BEVERLY – All five units of American Electric Power’s Muskingum River Plant in Beverly will be phased out by the end of 2015.
The company announced its plan Thursday to phase out Unit 5 at the coal-fueled power plant on Sparling Road to stay in compliance with environmental regulations.
“Based on the revised consent decree we agreed to earlier this year, we had two options, which were to retire or refuel the units,” said AEP spokeswoman Tammy Ridout.
Until Thursday, AEP’s compliance plan had included the closure of units 1 through 4 and the refueling of unit 5 with natural gas. However, the cost of compliance – $61 million – and market conditions led to the decision to close the fifth unit, effectively shutting down the plant by the end of 2015, Ridout said.
The closure will affect 95 employees, 34 of whom worked at Unit 5, said Ridout.
“We’re going to work with the employees as much as we can to help them find opportunities for jobs at AEP or other companies and those who aren’t able to find work with AEP would potentially be offered a severance package,” she said.
The closure of Unit 5 will mean an additional 585-megawatt loss of energy. A single megawatt powers approximately 1,000 homes, said Ridout.
However, the closure will not affect AEP costumers’ rates because “generation is deregulated in Ohio,” she said.
There is no hard timeline for the closure of the plant and different units could be phased out at different times. However, all units are now expected to be retired by the end of 2015, according to AEP.
The plant’s closure will be widely felt by the area, said Glen Miller, board member and longtime president of the Muskingum Valley Area Chamber of Commerce.
“It’s a sad situation. I was hoping that they would make Unit 5 a gas-powered plant,” he said.
He feels restrictions from the Environmental Protection Agency have placed too much of a financial burden on coal-powered plants and it is affecting employment, he said.
“The Beverly-Waterford Area is going to suffer greatly because of this. This power plant has helped out our chamber big time financially over the years. They’ve been a really big supporter,” Miller said.
U.S. Rep. Bill Johnson, R-Ohio, attributed the closure to an overstep of regulatory measures.
“AEP being forced to close its Beverly facility because of the ‘cost of compliance with environmental regulations’ is the latest example of how President Obama’s War on Coal is costing jobs in Eastern and Southeastern Ohio,” said Johnson in a released statement.
The closure will affect income tax revenues for area townships, school districts and the Village of Beverly.
Beverly will be looking at adjustments to the budget for the 2014 fiscal year, said village Mayor Rex Kenyon.
“We’ll lose income tax and money from people spending money in town,” he said.
The village expects to lose $9,000 annually in income taxes, he said.
On the bright side, the city expects a so far undetermined boost in income taxes from the expansion of area business Waterford Tank, he said.
Units 1 through 4 of the Muskingum River plant fall within the Fort Frye School District’s tax base, said district treasurer Melcie Wells, and the district has already been planning for their closure.
“It does affect our district, but we have a plan in place I feel to absorb that,” she said of the $1.4 million in property tax revenue that the district receives from the plant annually.
The district is expecting an increase in tax revenue around 2016 when Duke Energy, on Ohio 83, comes off of tax abatement, said Fort Frye Board of Education member Charlie Schilling.
That new income is built into the forecast as an approximately $2.1 million increase annually, said Wells.
The total annual operating budget for the district is around $9.5 million, she said.
Officials with the Wolf Creek Local school district weren’t available Thursday to comment on the impact on their district.