It announced in 2011 that it was shutting down the other three units by mid-2015.
That means AEP is retiring 7176MW of coal-fuelled generation to comply with environmental regulations affecting coal-fired plants.
The utility had been weighing up the option of refuelling Tanners Creek 4, but took the decision to shutter it.
“Based on relatively flat electricity demand and the fact that our Indiana Michigan Power customers don’t need additional generation at this time, we’ve determined the cost of refuelling Tanners Creek 4 is not the right capital investment,” AEP president and CEO Nicholas Akins said.
About 115 employees working at the Tanners Creek Plant will be impacted by the plant closure.
AEP said it would work to find jobs for them at its other facilities.
“Employees whose positions are eliminated and who do not find other positions with the company will be considered for severance benefits,” the company said.
AEP does not expect the retirement of Tanners Creek 4 to impact its 2013 operating earnings guidance range of $US3.05 to $Us3.25 per share. It still expects to deliver an earnings growth rate of 4-6% off that 2013 operating earnings guidance.
Indiana Michigan Power recovers Tanners Creek Plant costs in its rates and plans to seek the necessary regulatory approvals to recover them in the future.