AEP to Stop Burning Coal At Three Power Plants In President Obama's Latest Victoy in the War on Coal

As part of an settlement reached with the EPA and environmental groups, America's largest user of coal has annouced that agreed to stop burning coal at three of their power plants. American Electric Power [NYSE- AEP] also announced as part of the settlement that it would be developing more wind and solar projects in Indiana and Michigan.

While the Columbus, Ohio-based company had previously announced aspects of the deal, the full scope of the control measures and closings is a sign of the pressure on power producers to cut or clean up coal use for electricity generation, environmental advocates said.

“Across the country, the coal industry faces unprecedented setbacks as its share of electricity generation plummets, and the cost of coal continues to skyrocket,” Jodi Perras, Indiana representative for the Sierra Club’s Beyond Coal Campaign, said in a statement. “This agreement is only the latest sign of progress.”

AEP said earlier this month that it expects to spend $4 billion to $5 billion on pollution controls at its coal-fueled plants through 2020, less than the $6 billion to $8 billion it had estimated in 2011. It also said its coal plants should generate about half of its power by decade’s end, down from 65 percent.

In return for that change, AEP will develop more wind and solar power in Indiana and Michigan. And it will close or shift to natural-gas three units at existing coal plants: Tanners Creek Generating Station unit four in Indiana, the Muskingum River Power Plant unit five in Ohio and the Big Sandy Power Plant unit two in Kentucky.

The company had previously planned to retrofit the Tanners Creek plant and continue burning coal there, Melissa McHenry, a company spokeswoman, said in an e-mail. It had already announced that it planned to shutter or remodel into natural-gas units the other two, she said.

Far from being an independent, grassroots campaign, the Sierra Club's 'Beyond Coal' campaign has enjoyed an infusion of donations- including a $50 million donation from New York City mayor and noted busybody Mike Bloomberg in 2011- since its 2001 inception.

The coal industry has been reeling from a one-two punch of increased competition from natural gas and an increased regulatory burden from the EPA under the Obama administration. Since Obama's re-election in November, coal mines from Pennsylvania to Virginia to Utah have announced closures and layoffs involving hundreds of employees.