Dive Brief:
- American Electric Power is considering selling its rival retail business, the fourth-largest non-residential retail power provider at PJM Interconnection and the eighth-largest nationwide, company officials said Tuesday.
- AEP also agreed to reduce the price of the sale of the Kentucky utility operations to Liberty Utilities by 7.5 percent, from $2.85 billion to $2.65 billion, and to delay the sale until January, the companies said. said Friday.
- Columbus, Ohio-based AEP expects to close the sale of its 1,365 MW of deregulated wind and solar assets as early as the second quarter. “The sale of our non-regulated, contracted renewable assets and our Kentucky operations will allow us to shift capital to renew our transmission and distribution systems,” said Julie Slott, AEP’s chief financial officer and president.
Dive Insight:
AEP can be sold. AEP Energy Subsidiary as part of the transition from non-controlling interests.
“We have a strong belief in moving more things into the regulatory body.” Matt SatterwhiteThe senior vice president, regulatory, said during Tuesday’s investor meeting.
AEP Energy has about 494,000 electric customers generating 24 TWh annually in seven Mid-Atlantic states, as well as about 180,000 gas customers in Ohio, according to a company report. Investor day presentation.
The business has $170 million in net equity, and AEP expects 2022 operating earnings of 6 cents, $4.97/share to $5.07/share, Slott said, which is set to appoint Nick Akins as the company’s CEO on Jan. 1.
Meanwhile, tenders for AEP will be submitted within two weeks. Unregulated wind and solar portfolio. The company is seeing “strong” interest from financial and strategic buyers, as Greg HallAEP’s executive vice president and chief commercial officer.
In addition to direct asset sales, AEP is exploring options for utility partners that operate in multiple states, such as Southwestern Electric Power Co., which serves parts of Arkansas, Louisiana and Texas.
AEP wants to align its generating portfolio with the policies of the individual states it serves, according to Satterwhite, who noted that a utility could share generation in states with different energy policies, such as Virginia and West Virginia.
After connecting Disputes between states On individual power plants, AEP Depending on the approach, it is evaluating options for obtaining dedicated resources on a state-by-state basis.
“While it doesn’t exactly look like a sale, I think there could be other opportunities,” Slott said of AEP’s options for multi-state utilities.
Looking ahead, AEP is expected to have 6,500 MW of coal-fired generation by the end of 2028.
The company on Tuesday accelerated its goal to net zero greenhouse gas emissions by 2045, five years ahead of its previous target, and cut its Scope 1 emissions — from sources owned or controlled by AEP — by 80% by 2030 from a 2005 baseline. .
Over the next five years, AEP expects to spend $15 billion on transmission, $10.8 billion on distribution facilities and $8.6 billion on integrated renewable generation, with average annual rate increases of about 4%, company officials said. According to Slott, the company has a pipeline of $35 billion in transmission projects over the next decade.
The latest long-term resource plans for AEP utilities cite an increase of 8,170 megawatts of solar power by 2032, followed by 7,200 megawatts of wind, 1,528 megawatts of gas and 310 megawatts of storage.
AEP has a total generation capacity of approximately 31,000 MW. By the end of this decade, the company will cover 52% of its generation capacity with renewables, followed by gas at 20% and coal at 19%. Energy efficiency and demand response account for 3% of capacity additions.
They have almost all AEP facilities 5.5 million retail customers In Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia.
