AEP Will Shed #Kentucky Operations in $2.9B Sale RSS Feed

AEP Will Shed Kentucky Operations in $2.9B Sale

American Electric Power (AEP) is shedding its Kentucky-based assets—including its longstanding regulated utility Kentucky Power and transmission business AEP Kentucky Transco—to better position itself to invest in projects that will support a resilient, cleaner energy system.

The Columbus, Ohio, headquartered company on Oct. 26 announced it has entered into an agreement for the sale of the two entities to Liberty, a regulated utility business owned by Ontario-based Algonquin Power & Utilities Corp. (AQN). AQN said the total purchase price is about $2.846 billion (about C$3.523 billion), and it assumes about $1.221 billion in debt. AQN said it obtained a $2.725 billion syndicated acquisition financing commitment from CIBC and Scotiabank to support the transaction.

AEP and AQN expect the sale will close in the second quarter of 2022, though the sale will first need to clear regulatory approvals by the Kentucky Public Service Commission (PSC) and the Federal Energy Regulatory Commission (FERC). The transaction is also subject to federal clearance pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and clearance from the Committee on Foreign Investment in the U.S.

AEP’s Sale of Kentucky Power: Parting with a Legacy
AEP’s Kentucky TransCo is a transmission business that operates a Kentucky portion of transmission infrastructure—including about 10,000 distribution and 1,200 transmission miles—that is part of the FERC-regulated PJM Interconnection.

Kentucky Power, a utility founded in 1919, is an Ashland-headquartered state-regulated utility that serves about 165,000 electricity customers in 20 eastern Kentucky counties. Kentucky Power notably also owns 1,075 MW of generation, including the 295-MW Big Sandy 1, a natural gas-fired plant, and a 780-MW interest in the 1.6-GW Mitchell coal-fired plant, which is located in Moundsville, West Virginia. (Wheeling Power, an AEP subsidiary affiliated with its Appalachian operations, owns the remaining 50% stake in the Mitchell Plant.) Kentucky Power also notably procures electricity under a unit power agreement (UPA) from Unit 2 at AEP’s twin-unit 2.6-GW Rockport coal generating facility in Indiana. That lease will expire when AEP shutters Rockport 2 next year; the full plant is slated to close by 2028.

Read full article at Power Magazine