Case | HBS Case Collection | October 2010 (Revised July 2013)

AEP: Carbon Capture and Storage

by Richard H.K. Vietor

Abstract

By October 2010, American Electric Power, the largest coal-fired, electric utility in the United States, had been operating a carbon capture and sequestration pilot plant for one year. Using a proprietary, Alstom chilled ammonia technology, AEP was capturing and sequestering 90% of the carbon dioxide in a small waste stream at its Mountaineer plant in West Virginia. As part of its larger carbon reduction strategy, AEP was launching construction of a $680 million demonstration plan, partially funded with DOE money. Mike Morris, AEP's chairman, was frustrated though, that Congress had not passed a cap-and-trade bill, and was worried how he would recover AEP's share of this huge investment. Could he find partners in this cutting-edge demonstration, or at least, add it to his utility rate base?

Keywords: Energy Generation; Government Legislation; Technological Innovation; Partners and Partnerships; Projects; Decision Choices and Conditions; Environmental Sustainability; Problems and Challenges; Utilities Industry; United States;

Citation:

Vietor, Richard H.K. "AEP: Carbon Capture and Storage." Harvard Business School Case 711-036, October 2010. (Revised July 2013.)