AEP SWEPCO utility isses RFP for renewable energy resources

COLUMBUS, Ohio. – American Electric Power (NYSE: AEP) subsidiary Southwestern Electric Power Co. (SWEPCO) today issued a request for proposals seeking long-term purchases of 65 megawatts (MW) of new renewable energy resources to be operational by the end of 2010.

According to the RFP, proposals must rely on commercially proven technologies for renewable energy, including wind; solar photovoltaic; biomass firing or co-firing of agricultural crops and all energy crops; hydro (as certified by the Low Impact Hydropower Institute); coal mine methane; landfill gas; biogas digesters; and biomass firing or co-firing of crop residues, animal waste and woody waste.

A pre-bid conference call for potential bidders will be conducted May 1 with proposals to be submitted by May 19.

The RFP is part of AEP’s plan – announced in 2007 – to add 1,000 MW of new wind or renewable energy by 2011 as a component of the company’s comprehensive strategy to address its greenhouse gas emissions. The addition of renewable energy to AEP’s energy portfolio avoids an increase in greenhouse gas emissions that would otherwise occur if AEP used traditional fossil generation to meet growing customer demand.

“Our commitment to add 1,000 megawatts of renewable energy to our generation portfolio, combined with our investment in offset programs, energy efficiency initiatives and new technology to reduce, capture and store carbon dioxide emissions, will help mitigate our greenhouse gas emissions while meeting increasing customer demand for electricity,” said Michael G. Morris, AEP’s chairman, president and chief executive officer. “There is no way to meet the growing electricity needs of our more than 5 million customers solely with additional renewable energy resources, but they are an important part of our overall strategy to help the world address global climate change.”

“These contracts will be contingent on continuation of the Production Tax Credit for renewable generation, as these credits help make renewable energy cost-competitive with other generation sources,” Morris said. “In order for wind and other renewable generation to reach its full potential in the United States, Congress needs to address the short-term nature and the constant uncertainty surrounding the production tax credits. The current system serves as a disincentive to investment and can increase the cost of renewable energy for utility customers.

“We also need to address, on a national level, the fact that our current transmission system cannot support significant growth in renewable generation. Without regulatory policies that promote additional transmission development, moving renewable power from where it can be produced to where it is needed by customers will be an ongoing challenge,” Morris said.

AEP issued another RFP for 100 MW of renewable energy to serve its Appalachian Power customers April 1 and has completed three purchases of long-term renewable energy capacity since the company made its 1,000-MW commitment in 2007. The three purchases, all of wind energy, added 275 MW of renewable capacity to serve AEP’s customers in Indiana, West Virginia, Virginia and Tennessee.

“We are taking a balanced approach to serving the growing electricity needs of our SWEPCO customers in Arkansas, Texas and Louisiana,” said Venita McCellon-Allen, president and chief operating officer of SWEPCO. “Adding 65 megawatts of renewable generation helps supplement our plans to build an advanced ultra-supercritical coal-fueled power plant in Arkansas and additional natural gas-fueled power plants in Arkansas and Louisiana to fuel the significant growth in our region’s economy.”

AEP’s wind portfolio – prior to the recent RFPs – is 1,050 MW, which includes 310 MW of wind generation owned by AEP in Texas, long-term wind purchase agreements reached before the company’s 2007 commitment and agreements reached after the 2007 commitment.