COLUMBUS, Ohio, Feb. 22,
2023 /PRNewswire/ -- American Electric Power (Nasdaq:
AEP) has entered into an agreement to sell its 1,365-megawatt (MW)
unregulated, contracted renewables portfolio to IRG Acquisition
Holdings, a partnership owned by Invenergy, CDPQ and funds managed
by Blackstone Infrastructure, at an enterprise value of $1.5
billion including project debt. The sale is expected to close in
the second quarter of 2023. At the closing, AEP expects to net
approximately $1.2 billion in cash
after taxes, transaction fees and other customary adjustments.
"We're committed to de-risking the company and prioritizing
investments in our core regulated businesses. The proceeds from the
sale will be directed to the significant pipeline of opportunities
we have to enhance service for customers across our footprint and
advance our clean energy transition," said Julie Sloat, AEP president and chief executive
officer.
As previously announced, AEP plans to invest approximately
$40 billion over the next five years
in its regulated wires and generation business with a focus on
adding 17,000 MW of new generation resources and more resilient,
efficient transmission and distribution infrastructure to serve
customers.
The sale portfolio includes 14 projects, representing 1,200 MW
of wind and 165 MW of solar in 11 states. The renewable power from
the projects is contracted under long-term agreements with other
utilities, corporations and municipalities.
J.P. Morgan is serving as lead financial advisor and Citigroup
Global Markets is serving as financial advisor to AEP for this
transaction. Hunton Andrews Kurth LLP is serving as legal counsel
to AEP.
AEP announced its plan to sell the assets in February 2022 and launched a competitive bidding
process in August. The sale is subject to satisfaction of customary
closing conditions, including regulatory approval by the Federal
Energy Regulatory Commission, clearance from the Committee on
Foreign Investment in the United
States and approval under applicable competition laws.
American Electric Power, based in Columbus, Ohio, is powering a cleaner,
brighter energy future for its customers and communities. AEP's
approximately 17,000 employees operate and maintain the nation's
largest electricity transmission system and more than 225,000 miles
of distribution lines to safely deliver reliable and affordable
power to 5.6 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 6,900 megawatts of renewable energy. The
company's plans include growing its renewable generation portfolio
to approximately 50% of total capacity by 2032. AEP is on track to
reach an 80% reduction in carbon dioxide emissions from 2005 levels
by 2030 and has committed to achieving net zero by 2045. 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