Nick Akins is CEO of American Electric Power (AEP), one of the nation’s largest electricity generators with more than 38,000 megawatts (MW) of generating capacity, serving more than 5 million retail consumers in 11 states in the Midwest and South Central areas of the country.

Akins sat down with FreeEnterprise.com during a visit to the U.S. Chamber to discuss energy policy and innovation. (Scroll down or click here for video of the interview)

Free Enterprise: What are you here to talk about today?

Nick Akins: I’m talking about the need for a national energy policy that’s consistent, coherent, and makes sense. One of the issues we deal with is that people in Washington are trying to select what resources are available and what aren’t. I’m going to make the case that we need everything. For us to be making the huge investments that we’re making—this country and the utility industry need to invest about $2 trillion in the next two decades—we need to execute a rational energy policy.

FE: What does a consistent, coherent energy policy look like?

NA: A national energy policy pushes a true all-of-the-above strategy. Certainly, regulations would need to support the advancement of every resource, particularly the indigenous resources available to us in the U.S., and be a partner in doing that. Right now, you have a president who in his State of the Union address called for an all-of-the-above strategy, but his administration is not practicing that. It’s key to have a leader who says, ‘OK, this is what we’re going to do. It’s an all-of-the-above strategy, and we’re going to work together in a bipartisan way to get this done.’

We need short-term, midterm, and long-term investments. You have to look at nuclear from a long-term perspective; otherwise, it’s not going to get built. You’ve got to look at coal from a long-term perspective, or it’s not going to get built. You have to really focus on the environmental activities associated with coal. On natural gas, we need to push forward with shale gas activity and at the same time continue with renewable, smart grid activity and advances in battery technology. Those are the kinds of things that would create jobs and an energy future for this country that clearly make sense and would mitigate costs for customers.

FE: What are some of the biggest challenges facing AEP and the utility industry?

NA: Certainly, we face challenges from a regulatory perspective. Regulations tend to change based on which administration is in place. We need an element of consistency there. And really, in many cases, regulators need to be partners instead of being in the way. EPA’s requirements, for example, to shut down 20% to 25% of the coal-fired fleet in this country absolutely cannot be done because of the reliability implications to the grid that we all depend on.

The other thing for us is that we have a massive amount of capital we need to deploy. The $2 trillion investment I mentioned is because we’ve now reached a point where many of the systems that were in place are aging and need replacement. So you’re spending that on refurbishing the grid, putting new generation resources in place, developing technologies for the future, all at the same time we have a slow growing economy. That’s very difficult. We need the economy to move much more quickly.

FE: Which is the bigger hurdle for utility companies: environmental mandates or permitting holdups?

NA: Both, honestly. It’s of extreme importance to us to have a permitting regime in place that moves things along. You have so many people coming out of the woodwork to stop a project, knowing that if they slow it down, it effectively kills the project. As for mandates, they have to take into account the technology that can be put in place, the timing associated with the supply chain, and the workforce requirements associated with it. What EPA is doing today is not rational.

FE: Do you think there’s a misperception about the ease and cost of putting in place new energy technology?

NA: Absolutely. Many people think these additions, like a scrubber or a selected catalytic reduction [SCR] device are just boxes you put on the end of your tailpipe. They are not. These are huge undertakings. By the time you put a scrubber or SCR on one of our units, then add carbon capture storage, you’ve put in more man-hours to build that portion of the plant than it took to build the entire plant itself.

FE: You recently put a major carbon capture and storage project on hold. Why?

NA: We built the first integrated carbon capture and storage facility in the world. It actually captured and stored output about 2 miles below the surface of the Mountaineer Station in West Virginia. We spent over $100 million doing it. Ultimately, it wound up costing our shareholders $100 million. The upscale project was going to cost around $668 million. The Department of Energy was in for half of that. The other half we’d need to recover from customers, and the regulatory jurisdictions did not allow us to do that. So we couldn’t move forward. We finished the engineering and everything was ready to go, but we couldn’t come up with the funding.

FE: What else is AEP doing in terms of innovation?

NA: It’s across the board. We’re very focused on the development of coal-fired generation. The first ultra-supercritical coal-fired unit in the country is being built in southwest Arkansas. The metallurgy allows higher steam temperatures so it’s much more efficient. It burns less coal and emits fewer emissions. It really is an advancement from the coal-firing standpoint.

We’re also very focused on battery technology. We have some of the first sodium sulfide batteries. We’re now testing out community energy storage, and other applications are being tested as well. We have pilot programs at three of our companies that focus on advancements from a customer usage standpoint and efficiencies all the way back beyond the meter. We’re also doing plug-in electric vehicle evaluations as well. So we’re not just trying to push coal-fired generation.

FE: Do you think innovation should help shape a national energy policy?

NA: Absolutely. When I started in this industry 29 years ago, it was really just a matter of which central station generation you put in place and how much load increase. Today, it’s changing not just in terms of those parameters, but the technologies themselves are changing. They are advancing much more quickly than they ever did before, and that kind of American ingenuity can be galvanized with a national energy policy.