American Electric Power (AEP) last week said it would retire the 500-MW coal-fired Unit 4 along with other generating units at its Tanners Creek plant in Lawrenceburg, Ind.

AEP subsidiary Indiana Michigan Power had announced its decision to retire Tanners Creek Units 1­–3 (495 MW) by mid-2015 in June 2011. A modified settlement reached this February between AEP, the Environmental Protection Agency (EPA), and a coalition of citizen groups forced the company to choose whether it would retire Unit 4 or refuel it natural gas.  The agreement is a modification of a New Source Review (NSR) consent decree reached in 2007 (from a federal court lawsuit filed in 1999) between AEP, the EPA, eight eastern states, and 13 citizen groups. AEP initiated the modification of the consent decree.

An analysis determined that projections for limited electricity demand growth and adequate generation currently available to serve Indiana Michigan customers “make it financially unfeasible to refuel Tanners Creek 4,” AEP said in a statement. All four generating units at Tanners Creek will be retired by mid-2015.

“Tanners Creek Plant has served Indiana Michigan Power customers well for many decades,” said Paul Chodak III, Indiana Michigan Power president and chief operating officer. “However, the plant’s age, combined with new environmental regulations, our successful energy efficiency programs and the fact that we currently don’t need additional generation make retirement the best decision for our customers. We are mindful of the impact of this decision on the [115] employees at Tanners Creek and will work with them as they manage their way through this transition.”

AEP has to date announced the retirement of 6.68 GW of coal-fired generation to comply with new environmental regulations. The addition of Tanners Creek 4 means AEP will shutter 7.18 GW of coal-fired power generation by 2016.

Sources: POWER, AEP