U.S. coal is on the decline, and utility execs know it
Every week brings a new story about coal’s decline in America. Here are two from last week.
One is about American Electric Power, the nation’s largest electric utility, based in Ohio but ranging over 11 states in the South and Midwest. AEP is the farthest thing from a good actor in the utility sector. Between 2008 and 2010, the company raised executive compensation by 30 percent, laid off 2,600 workers, spent almost $29 million lobbying the federal government, and paid a tax rate of -9 percent [PDF]. Yes, negative nine. It’s that kind of company.
So it’s significant that last week, AEP reaffirmed its intention to accelerate a shift away from coal. By 2020, according to CEO Nicholas Akins, coal will fall from 67 percent of AEP’s assets to 50 percent.
Cheap natural gas is part of the story, but only part. Natural gas will rise from 24 to 27 percent of AEP’s generation, Akins said. That leaves 14 percent to be filled by nuclear, renewables, hydro, storage, and efficiency.