Major investor-owned electric utility US American Electric Power (AEP) has signed an agreement to sell four plants totaling approximately 5,200MW for around $2.17bn.
A newly formed joint venture (JV) of Blackstone and ArcLight Capital Partners purchased the plants, which include the 1,186MW natural gas-powered Lawrenceburg Generating Station in Lawrenceburg in Indiana, a 840MW natural gas-powered Waterford Energy Center in Waterford in Ohio, a 507MW natural gas-powered Darby Generating Station in Mount Sterling in Ohio, and 2,665MW coal-powered Gen. James M. Gavin Plant in Cheshire, Ohio.
AEP's chairman, president, and chief executive officer Nicholas Akins said: “AEP’s long-term strategy has been to become a fully regulated, premium energy company focused on investment in infrastructure and the energy innovations that our customers want and need.
“This transaction advances that strategy and reduces some of the business risks associated with operating competitive generating assets.”
“Our employees have done an incredible job operating these power plants in PJM, and I’m confident that they will contribute to the future success of Blackstone and ArcLight.
“We will continue to operate these plants safely in the coming months while working closely with the Blackstone and ArcLight teams to obtain the regulatory approvals necessary to complete the sale. We also will be working with employees and community leaders to ensure a smooth transition.”
Located in the region served by PJM Interconnection, the sale is subject to regulatory approvals from the Federal Energy Regulatory Commission, the Indiana Utility Regulatory Commission, and federal clearance pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
It is expected to close in the Q1 of next year and AEP expects to net approximately $1.2bn in cash after taxes, repayment of debt, and transaction fees.