COLUMBUS, Ohio, Jan. 30, 2017 /PRNewswire/ -- American
Electric Power (NYSE: AEP) today completed the sale of four
competitive power plants to Lightstone Generation LLC, a joint
venture of Blackstone (NYSE: BX) and an affiliate of ArcLight
Capital Partners LLC (ArcLight), for approximately $2.1 billion.
AEP announced Sept. 14, 2016, that
it had reached an agreement to sell the plants to Lightstone
Generation. The sale includes 5,200 megawatts of generation all
located in the region served by the PJM Interconnection:
- Lawrenceburg Generating Station, 1,186 MW natural gas,
Lawrenceburg, Indiana
- Waterford Energy Center, 840 MW natural gas, Waterford, Ohio
- Darby Generating Station, 507 MW natural gas, Mount Sterling, Ohio
- Gen. James M. Gavin Plant, 2,665
MW coal, Cheshire, Ohio
AEP will net approximately $1.2
billion in cash after taxes, repayment of debt associated
with these assets and transaction fees. The company is investing
the proceeds from the sale in its regulated businesses, including
transmission and contracted renewable projects.
AEP recorded an after-tax gain, subject to customary true-ups,
of approximately $130 million from
the sale.
American Electric Power is one of the largest electric utilities
in the United States, delivering
electricity and custom energy solutions to nearly 5.4 million
customers in 11 states. AEP owns the nation's largest electricity
transmission system, a more than 40,000-mile network that includes
more 765-kilovolt extra-high voltage transmission lines than all
other U.S. transmission systems combined. AEP also operates 224,000
miles of distribution lines. AEP ranks among the nation's largest
generators of electricity, owning approximately 31,000 megawatts of
generating capacity in the U.S. AEP also supplies 3,200 megawatts
of renewable energy to customers. AEP's utility units operate as
AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West
Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky
Power, Public Service Company of Oklahoma, and Southwestern Electric Power
Company (in Arkansas, Louisiana and east Texas). AEP's headquarters are in Columbus, Ohio.
This report made by American Electric Power and its Registrant
Subsidiaries contains forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934. Although AEP
and each of its Registrant Subsidiaries believe that their
expectations are based on reasonable assumptions, any such
statements may be influenced by factors that could cause actual
outcomes and results to be materially different from those
projected. Among the factors that could cause actual results to
differ materially from those in the forward-looking statements are:
the economic climate, growth or contraction within and changes in
market demand and demographic patterns in AEP's service territory;
inflationary or deflationary interest rate trends; volatility in
the financial markets, particularly developments affecting the
availability or cost of capital to finance new capital projects and
refinance existing debt; the availability and cost of funds to
finance working capital and capital needs, particularly during
periods when the time lag between incurring costs and recovery is
long and the costs are material; electric load, customer growth and
the impact of competition, including competition for retail
customers; weather conditions, including storms and drought
conditions, and AEP's ability to recover significant storm
restoration costs; the cost of fuel and its transportation and the
creditworthiness and performance of fuel suppliers and
transporters; availability of necessary generating capacity and the
performance of AEP's generating plants; AEP's ability to recover
fuel and other energy costs through regulated or competitive
electric rates; AEP's ability to build transmission lines and
facilities (including the ability to obtain any necessary
regulatory approvals and permits) when needed at acceptable prices
and terms and to recover those costs; new legislation, litigation
and government regulation, including oversight of nuclear
generation, energy commodity trading and new or heightened
requirements for reduced emissions of sulfur, nitrogen, mercury,
carbon, soot or particulate matter and other substances that could
impact the continued operation, cost recovery, and/or profitability
of AEP's generation plants and related assets; evolving public
perception of the risks associated with fuels used before, during
and after the generation of electricity, including nuclear fuel; a
reduction in the federal statutory tax rate that could result in an
accelerated return of deferred federal income taxes to customers;
timing and resolution of pending and future rate cases,
negotiations and other regulatory decisions, including rate or
other recovery of new investments in generation, distribution and
transmission service and environmental compliance; resolution of
litigation; AEP's ability to constrain operation and maintenance
costs; AEP's ability to develop and execute a strategy based on a
view regarding prices of electricity and gas; prices and demand for
power generated and sold at wholesale; changes in technology,
particularly with respect to energy storage and new, developing,
alternative or distributed sources of generation; AEP's ability to
recover through rates or market prices any remaining unrecovered
investment in generating units that may be retired before the end
of their previously projected useful lives; volatility and changes
in markets for capacity and electricity, coal, and other
energy-related commodities, particularly changes in the price of
natural gas and capacity auction returns; changes in utility
regulation and the allocation of costs within regional transmission
organizations, including ERCOT, PJM and SPP; the market for
generation in Ohio and PJM and the
ability to recover investments in Ohio generation assets; AEP's ability to
successfully and profitably manage competitive generation assets,
including the evaluation and execution of strategic alternatives
for these assets as some of the alternatives could result in a
loss; changes in the creditworthiness of the counterparties with
whom AEP has contractual arrangements, including participants in
the energy trading market; actions of rating agencies, including
changes in the ratings of AEP debt; the impact of volatility in the
capital markets on the value of the investments held by AEP's
pension, other postretirement benefit plans, captive insurance
entity and nuclear decommissioning trust and the impact of such
volatility on future funding requirements; accounting
pronouncements periodically issued by accounting standard-setting
bodies; and other risks and unforeseen events, including wars, the
effects of terrorism (including increased security costs),
embargoes, cyber security threats and other catastrophic
events.
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SOURCE American Electric Power