Utility president warns of natural-gas price volatility

“Whether that volatility has changed permanently remains to be seen,” he added.

Akins said natural-gas prices could spike if major environmental issues emerge with hydraulic fracturing, or “fracking,” the natural-gas drilling method that has enabled the shale production boom.

He also said natural-gas prices are vulnerable to volatile weather conditions, adding that they could increase as export and import facilities for liquefied natural gas are constructed.

Coal makes up a major portion of American Electric Power’s (AEP) generating capacity, but low natural-gas prices and new EPA air pollution regulations have driven the Ohio-based company to diversify its fuel mix.

AEP has said it will retire more than 5,000 megawatts of coal-fired power, switching to natural gas and other fuel sources.

“By 2020, only 50 percent of our generation fleet will burn coal,” Akins said during his remarks Thursday.

Akins took aim at pending EPA air pollution regulations, arguing they will “will unnecessarily increase electricity prices and put the reliability of the grid at risk in several parts of the country.” AEP has been very critical of EPA in the past.

The regulations “make absolutely no sense” amid the Obama administration’s efforts to boost the economy and create jobs, he said.

Akins touted legislation authored by Sens. Joe Manchin (D-W.Va.) and Dan Coats (R-Ind.) to delay the compliance period for EPA’s Cross-State Air Pollution and Utility MACT (maximum available control technology) rules.

The cross-state rule aims to limit air pollution that crosses state lines. The Utility MACT requires power plants to limit the release of mercury and other air toxics.