American Electric Power says it is working to meet strong customer demand for renewable energy, but the major utility wants to use customer money to fund a “clean coal” group involved in misleading attacks on wind and solar power.

“AEP is focused on bringing more renewable energy resources into our generation mix throughout our 11 state territory for the last several years,” Tom Froehle, AEP’s vice president of external affairs, said last week while testifying before the Ohio Senate Energy and Public Utilities Committee.

“Furthermore, all sectors of AEP Ohio customers are increasingly seeking renewable energy sources for their electricity supply,” Froehle said.

Froehle testified in support of a bill, HB 6, that would kill Ohio’s current renewable energy and energy efficiency standards and force Ohio consumers to bail out uncompetitive nuclear and coal-fired power plants. The bill would allow AEP Ohio to collect around $207 million in additional subsidies from customers for the coal plants by 2030, according to the Ohio Environmental Council Action Fund.

Froehle’s testimony came a week after the AEP-backed American Coalition for Clean Coal Electricity (ACCCE) released a misleading new study exaggerating the costs of solar and wind power, and presented its findings at a meeting of the Southeastern Association of Regulatory Utility Commissioners (SEARUC).

It also came after the collapse of the Utility Air Regulatory Group (UARG), an industry group that fought Clean Air Act limits on power plant pollution for over 40 years. During an investigation into UARG by members of Congress, AEP admitted to using its customers’ money to fund the group.

Earlier this year, before UARG disbanded, ACCCE hired Hunton Andrews Kurth – the same firm that ran UARG – to do federal lobbying.

AEP wants its customers to pay for its membership in the American Coalition for Clean Coal Electricity

An earlier report by the Energy & Policy Institute (EPI) found that subsidiaries of AEP in West Virginia sought to recover $177,476 of the utility’s 2013 ACCCE membership dues from customers.

Last week, EPI asked AEP if its customers pay for any portion of its payments to ACCCE. Here is how AEP responded:

ACCCE dues are treated similarly to other expenses for membership dues that are incurred as part of our business. Generally, membership dues would be included in rates unless otherwise determined by a commission. We have reduced our membership level in the organization as we have retired significant amounts of coal-fueled generation and added cleaner energy resources.

In other words, AEP will use customer money to fund industry groups like ACCCE, unless state utility commissioners stop it from doing so.

AEP and Southern Company are the only major investor-owned electric utilities that remain members of ACCCE, whose membership is comprised of coal producers, electric cooperatives, railroad companies that carry coal, and other companies that sell equipment to the coal industry. The group has long opposed EPA limits on carbon dioxide emissions from power plants.

Duke Energy quit ACCCE in 2009, when members of Congress investigated forged letters opposing a major climate bill that one of ACCCE’s subcontractors submitted to lawmakers. Other utilities, like FirstEnergy, left in the years that followed.

Misleading state utility commissioners about the costs of new solar and wind power projects compared to existing power plants

ACCCE released a new study on the costs of different fuel sources earlier this month with the Institute for Energy Research (IER), a Washington, DC-based think tank that has received funding from coal producers like Peabody Energy and Cloud Peak Energy.

IER claims its study shows that the average levelized cost of electricity (LCOE) from “existing coal ($41), cc gas ($36), nuclear ($33), and hydro ($38) resources are less than half the cost of new wind resources ($90) or new PV solar resources ($88.7) with imposed costs included.”

Estimates from other, more reputable sources tell a much different story. According to the latest LCOE estimates from Lazard:

The low end levelized cost of onshore wind-generated energy is $29/MWh, compared to an average illustrative marginal cost of $36/MWh for coal. The levelized cost of utility-scale solar is nearly identical to the illustrative marginal cost of coal, at $36/MWh. This comparison is accentuated when subsidizing onshore wind and solar, which results in levelized costs of energy of $14/MWh and $32/MWh, respectively.

Michelle Bloodsworth of ACCCE shared the study’s findings last week at a meeting of the Southeastern Association of Regulatory Utility Commissioners (SEARUC). When a slide from Bloodsworth’s presentation was posted on Twitter, it prompted a storm of criticism from energy experts.

“The cost assumptions they’re using are either years old or include bogus integration costs,” Michael O’Boyle said in a tweet.

O’Boyle co-authored a recent study that showed “local wind and solar could replace approximately 74 percent of the U.S. coal fleet at an immediate savings to customers.

Thomas F. Stacy and George S. Taylor authored the IER study. Stacy is an Ohio-based anti-wind power consultant who has previously opposed AEP’s plans to invest in new wind and solar power. Taylor is the director of Palmetto Energy Research and a senior policy fellow at the Energy & Environment Legal Institute, a climate skeptic group that’s also received funding from the coal industry.

IER released similar studies by Stacy and Taylor in 2015 and 2016, which were promptly debunked by the wind and solar power industries. Bloodsworth said at SEARUC that this is the third time ACCCE has partnered with IER.

The American Wind Energy Association, which counts AEP as a leading member, responded to the latest iteration of the ACCCE/IER  study with a fact check that identified a number of flaws in Stacy and Taylor’s analyses. The Solar Energy Industries Association called the study a “fabricated report intended to keep uneconomical power plants afloat.”

A spokesperson for AEP provided the following statement in response to a request for comment on the controversial new ACCCE/IER study:

AEP is committed to a cleaner energy future. We have cut our carbon dioxide emissions by 59 percent from 2000 levels and currently have more than 5,000 megawatts of renewable energy throughout our system. We plan to add up to 9,000 megawatts of new, regulated wind and solar power by 2030. We also continue to make significant investments to make the grid smarter, more resilient and more responsive to new resources and technologies.

Coal currently accounts for 46 percent of AEP’s generating capacity – down from 70 percent in 2005 – while natural gas represents 27 percent and nuclear 7 percent. The remaining capacity comes from renewable sources (16 percent) as well as energy efficiency (4 percent). By 2030, we expect our renewable generation capacity to increase to 40 percent, while coal will drop to 27 percent.

We don’t agree with or share every position that they take, but we remain a member of ACCCE since we are still managing a significant coal fleet as we transition to cleaner energy resources.

In 2018, AEP told CDP, a global climate disclosure non-profit,  that its position on climate change is “consistent” with ACCCE’s.

AEP remains in ACCCE despite a growing rift with the coal industry and its allies over renewable energy

At SEARUC, Bloodsworth said that “the reason that we did this analysis was really for the audience of state utility commissioners, because a lot of you are having to make decisions about coal retirements as utilities are coming in to ask for an IRP or a certificate of need for a new power plant.”

Some of the coal companies that are members of ACCCE are also members of the Ohio Coal Association, which is fighting AEP Ohio’s plans to invest in 900 megawatts of new solar and wind power projects in Ohio  before the Public Utilities Commission of Ohio (PUCO).

Murray Energy is listed as a member of ACCCE and the Ohio Valley Coal Company, a Murray subsidiary, is listed as a member of the Ohio Coal Association. Rosebud Mining Company is listed as a member of both groups.

“AEP cannot justify 900 MW of renewable generation because coal and other means of electric generation are more expensive sources of fuel for the generation of electricity,” the Ohio Coal Association said in one PUCO filing. “Indeed, the true costs of renewable generation such as wind and solar are much higher than other sources such as coal because renewable sources are heavily subsidized.”

Robert Murray, the CEO of Murray Energy, was listed as a member of ACCCE’s board of directors on the group’s annual Form 990 report to the IRS for 2017.

In a letter to the editor published in the Cleveland Plain Dealer last year, Murray pointed to the Texas Public Utility Commission’s decision to reject AEP’s ambitious Wind Catcher project as evidence of the “unreliability of wind power and the cost of electricity to consumers and ratepayers generated by it.”

“Mr. Murray’s Letter to the Editor expresses his opinions,” a spokesperson for AEP told EPI when asked about Murray’s letter. “Although the cancelation of Wind Catcher was disappointing, AEP will continue to invest in a cleaner, smarter energy system for our customers.”

AEP’s CEO Nick Akins served on ACCCE’s board of directors in 2017, but has since left the group’s board, according to AEP.

AEP was a member of the Ohio Coal Association, but said it left in 2015.

In neighboring Michigan, the state Public Service Commission recently approved Consumers Energy’s new Integrated Resource Plan, which lays out the utility’s plans to eliminate coal and boost renewable energy in the coming years.

Dan Kish, a distinguished senior fellow at IER, criticized the moves by Michigan and Consumers Energy in an April email chain that was shared with key members of the Ohio House involved in passing HB 6, and later obtained by EPI via a public records request.

Stacy attacked AEP in the same email chain, stating that the utility “loves renewables because they are redundant infrastructure with high profit potential under today’s wholesale market and regulated utility rules.”

“Onshore wind and solar PV power are now, frequently, less expensive than any fossil-fuel option, without financial assistance,” according to a new report by the International Renewable Energy Agency.

Top photo of AEP’s John Amos coal-fired power plant is by WikiMedia Commons user Tikilucas. Creative Commons Attribution-Share Alike 4.0 International license

Posted by Dave Anderson

Dave Anderson is the policy and communications manager for the Energy and Policy Institute. Dave has been working at the nexus of clean energy and public policy since 2008. Prior to joining the Energy and Policy Institute, he was an outreach coordinator for the climate and energy program at the Union of Concerned Scientists. He is also an alumnus of the Sierra Club and the Alliance for Climate Protection (now the Climate Reality Project). Dave’s research has helped to spur public scrutiny of political attacks on clean energy and climate science by powerful special interests, such as ExxonMobil and the American Legislative Exchange Council (ALEC). His work has been cited by major media outlets, such as CBS News and the Wall Street Journal, and he has served as a speaker on panels at national solar industry conferences. Dave holds a MA in Political Science from the University of New Hampshire, where he also received a BA in Humanities.

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