American Electric Power Inc. could locate its first electricity-generating coal gasification plant in Mason County because of funding glitches in Ohio.

The Columbus-based company had developed plans to build the first of two plants in Meigs County, Ohio. But AEP ran into problems when it requested a rate hike from the Public Utilities Commission of Ohio (PUCO) to pay for the plant's $23.7 million pre-construction costs.

According to a report in the Charleston Gazette, the commission approved the request, but five groups filed objections claiming the rate increase violates state law.

Now, the proposed plant in Mason County may proceed quicker than the Meigs County facility because West Virginia utility companies are regulated and can pass on building costs to customers.

In Ohio, deregulated utilities have to pay for the costs of building plants by selling energy into the open market, the Gazette reported.

While the Ohio commission takes another look at the case, West Virginia could come out ahead. In January, AEP began the application process in West Virginia by filing a request with the state's Public Service Commission to build a $1.2 billion plant. commission has 400 days to approve or disapprove the plan, according to the Gazette.

The coal gasification facilities, which would not begin producing energy until 2010, would convert coal into a cleaner-burning gas that's burned in turbines to power electric generators, the Gazette reported.

The energy produced by the West Virginia and Ohio facilities would provide power to AEP customers throughout its power grid.

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