Low prices force AEP to shut Texas plants

12 September 2002 – Ohio-based utility American Electric Power Co. said Wednesday it will mothball up to 16 of its Texas power stations due to weak market conditions.

The exact number and choice of plants will depend on the outcome of discussions with the Electricity Reliability Council of Texas (Ercot). A decision is due by the end of the month and Ercot will be asked to decide to decide by the end of the month which of the company’s 16 gas-fired power plants – which can produce enough power for nearly 3.9 million homes – will be required to continue running to ensure the reliability of the region’s power grid.

Plants that aren’t required to ensure reliability will be mothballed by the end of the year, though they can be returned to service later if market conditions change. Ercot will negotiate interim contracts for the plants that will continue to run.

“The interim contracts with ERCOT will allow us to get cost recovery” for the plants, said Eric van der Walde, AEP’s executive vice president for wholesale operations, in a statement. “We will reduce our operating and maintenance costs by mothballing the other plants. Both steps will enhance our earnings.”

Van der Walde said the plants have been idle for much of the year.

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