American Electric Power, a huge utility with almost 38,000 megawatts of generating capacity (for reference, Ontario Power Generation has 19,000 and TransAlta has 10,000) has put on hold its plans to advance carbon dioxide capture and storage technology (CCS) to commercial operation. As recently as February of this year, AEP was announcing that its first commercial scale CCS would be in operation by 2015 at a power plant in West Virginia. The US Department of Energy had committed to 50% of the project cost up to $334 million. At that time the Chairman and CEO of AEP stated “that commercialization of carbon capture and storage technology is an essential component of a successful global climate strategy”.

In announcing postponement of the project last week, the Chairman and CEO said “The commercialization of this technology is vital if owners of coal-fueled generation are to comply with potential future climate regulations without prematurely retiring efficient, cost-effective generating capacity. But as a regulated utility, it is impossible to gain regulatory approval to recover our share of the costs for validating and deploying the technology without federal requirements to reduce greenhouse gas emissions already in place. The uncertainty also makes it difficult to attract partners to help fund the industry’s share.”

This problem of regulators using their authority to effectively inhibit regulated utilities from investing to reduce carbon emissions has also raised its head in Canada, even in a jurisdiction where the government for which the regulators work has announced its intention to reduce greenhouse gas emissions. We’ll be reporting on GallonDaily in the near future.

Gallon Environment Letter monthly edition regularly comments on the state of CCS technology.

For the AEP announcement see http://www.aep.com/newsroom/newsreleases/?id=1704