COLUMBUS, Ohio, Sept. 30,
2022 /PRNewswire/ -- American Electric Power
(Nasdaq: AEP) has signed an amended agreement on the sale of its
Kentucky operations to Liberty and
expects to close on the sale in January
2023 following approval of the transaction from the Federal
Energy Regulatory Commission (FERC), which is due by Dec. 16. The amendment has no impact on AEP's
planned equity needs or operating earnings guidance.
Upon close of the sale, Liberty will acquire AEP's Kentucky operations by purchasing all the
stock of Kentucky Power and AEP Kentucky Transco for a reduced
price of $2.646 billion. AEP expects
to receive approximately $1.2 billion
in cash, net of taxes and transaction fees. The company anticipates
recording a pre-tax GAAP loss ranging from $180 million to $220
million in the third quarter of 2022 as a result of the
amendment and the change to the expected timing of the completion
of the transaction.
"I want to thank the employees in Kentucky for their continued focus on
delivering safe and reliable power to customers. This sale will
provide significant benefits to customers in eastern Kentucky to help offset volatile fuel prices
and support economic growth. It also will support AEP's ability to
invest in projects throughout our regulated businesses that will
enable the move to a clean, more reliable and resilient energy
system," said Nicholas K. Akins, AEP
chair and chief executive officer.
"The updated timeline for closing the sale will not have an
impact on our planned equity needs or the operating earnings
guidance we have provided," said Julie
Sloat, AEP president and chief financial officer. "We look
forward to receiving approval from FERC and completing the
transaction to allow the customer benefits to begin flowing."
AEP also announced that Brett
Mattison, president and chief operating officer (COO) of
Kentucky Power, has been named president and COO of Southwestern
Electric Power Company, effective Jan.
1. Mattison succeeds Malcolm
Smoak, who is retiring from the company at that time.
Liberty previously announced David
Swain will lead the Kentucky operations when the transaction is
finalized. Liberty is the regulated utility business of Algonquin
Power & Utilities Corp. (NYSE: AQN).
American Electric Power, based in Columbus, Ohio, is powering a cleaner,
brighter energy future for its customers and communities. AEP's
approximately 16,700 employees operate and maintain the nation's
largest electricity transmission system and more than 224,000 miles
of distribution lines to safely deliver reliable and affordable
power to 5.5 million regulated customers in 11 states. AEP also is
one of the nation's largest electricity producers with
approximately 31,000 megawatts of diverse generating capacity,
including more than 7,100 megawatts of renewable energy. The
company's plans include growing its renewable generation portfolio
to approximately 50% of total capacity by 2030. AEP is on track to
reach an 80% reduction in carbon dioxide emissions from 2000 levels
by 2030 and has committed to achieving net zero by 2050. AEP is
recognized consistently for its focus on sustainability, community
engagement, and diversity, equity and inclusion. AEP's family of
companies includes utilities 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, east Texas and the Texas
Panhandle). AEP also owns AEP Energy, which provides
innovative competitive energy solutions nationwide. For more
information, visit aep.com.
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:
changes in economic conditions, electric market demand and
demographic patterns in AEP service territories; the impact of
pandemics, including COVID-19, and any associated disruption of
AEP's business operations due to impacts on economic or market
conditions, costs of compliance with potential government
regulations and employees' reactions to those regulations,
electricity usage, supply chain issues, customers, service
providers, vendors and suppliers; the economic impact of escalating
global trade tensions including the conflict between Russia and Ukraine, and the adoption or expansion of
economic sanctions or trade restrictions; 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 if expected sources
of capital, such as proceeds from the sale of assets or
subsidiaries, do not materialize, and during periods when the time
lag between incurring costs and recovery is long and the costs are
material; decreased demand for electricity; weather conditions,
including storms and drought conditions, and AEP's ability to
recover significant storm restoration costs; the cost of fuel and
its transportation, the creditworthiness and performance of fuel
suppliers and transporters and the cost of storing and disposing of
used fuel, including coal ash and spent nuclear fuel; the
availability of fuel and necessary generation capacity and the
performance of generation plants; AEP's ability to recover fuel and
other energy costs through regulated or competitive electric rates;
the ability to transition from fossil generation and the ability to
build or acquire renewable generation, transmission lines and
facilities (including the ability to obtain any necessary
regulatory approvals and permits) when needed at acceptable prices
and terms, including favorable tax treatment, and to recover those
costs; new legislation, litigation and government regulation,
including changes to tax laws and regulations, 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; the risks associated
with fuels used before, during and after the generation of
electricity, including coal ash and nuclear fuel; 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; 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 any remaining unrecovered
investment in generation units that may be retired before the end
of their previously projected useful lives; volatility and changes
in markets for coal and other energy-related commodities,
particularly changes in the price of natural gas; changes in
utility regulation and the allocation of costs within regional
transmission organizations, including ERCOT, PJM and SPP; changes
in the creditworthiness of the counterparties with contractual
arrangements, including participants in the energy trading market;
actions of rating agencies, including changes in the ratings of
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 standards periodically issued by
accounting standard-setting bodies; other risks and unforeseen
events, including wars and military conflicts, the effects of
terrorism (including increased security costs), embargoes,
naturally occurring and human-caused fires, cyber security threats
and other catastrophic events; and the ability to attract and
retain the requisite work force and key personnel.
WEBSITE DISCLOSURE
AEP may use its website as a distribution channel for material
company information. Financial and other important information
regarding AEP is routinely posted on and accessible through AEP's
website at https://www.aep.com/investors/. In addition, you may
automatically receive email alerts and other information about AEP
when you enroll your email address by visiting the "Email Alerts"
section at https://www.aep.com/investors/.
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SOURCE American Electric Power