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AEP COMPLETES SALE OF UNREGULATED RENEWABLES ASSETS

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American Electric Power (AEP) has completed the sale of its 1,365 MW unregulated, contracted renewables portfolio to IRG Acquisition Holdings for $1.5 billion. AEP nets $1.2 billion in cash after taxes and fees. The sale is part of AEP's strategy to focus on regulated operations and invest $40 billion in the next five years. The proceeds will be used to modernize the energy grid and enhance service for customers.
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COLUMBUS, Ohio, Aug. 16, 2023 /PRNewswire/ -- American Electric Power (Nasdaq: AEP) has completed the sale of 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. AEP nets approximately $1.2 billion in cash after taxes, transaction fees and other customary adjustments.

"This sale is part of our strategy to streamline and de-risk the business and focus on our regulated operations," said Julie Sloat, AEP president and chief executive officer. "Over the next five years, we plan to invest nearly $40 billion primarily in our regulated wires and generation businesses. The proceeds from this sale will be used to continue to modernize the energy grid, shift to a more balanced generation portfolio and enhance service for our customers while strengthening our balance sheet."

AEP signed an agreement to sell the assets in February 2023 and obtained approval from the Federal Energy Regulatory Commission, clearance from the Committee on Foreign Investment in the United States and approvals under applicable competition laws.

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 served as lead financial advisor and Citigroup Global Markets served as financial advisor to AEP for this transaction. Hunton Andrews Kurth LLP served as legal counsel to AEP.

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 nearly 29,000 megawatts of diverse generating capacity, including approximately 5,800 megawatts of renewable energy. The company's plans include growing its regulated 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.

(PRNewsfoto/American Electric Power)

 

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SOURCE American Electric Power

FAQ

What did American Electric Power (AEP) sell?

AEP sold its 1,365 MW unregulated, contracted renewables portfolio.

Who did AEP sell the portfolio to?

AEP sold the portfolio to IRG Acquisition Holdings.

How much did the sale amount to?

The sale was valued at $1.5 billion.

How much did AEP receive in cash?

AEP received approximately $1.2 billion in cash after taxes, fees, and adjustments.

What is AEP's strategy behind the sale?

The sale is part of AEP's strategy to streamline and de-risk the business, focusing on regulated operations and investing $40 billion in the next five years.

What will the proceeds be used for?

The proceeds from the sale will be used to modernize the energy grid, shift to a more balanced generation portfolio, and enhance service for customers.

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