AEP Signs Agreement To Sell Unregulated Renewables Assets
February 22, 2023
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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
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American Electric Power 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.
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 reported, such prioritization has included a separate, ongoing strategic review of AEP Energy, AEP's competitive retail business. AEP has previously stated that AEP expects to complete the strategic evaluation of AEP Energy in the first half of 2023
Turning back to the renewables sale, 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.
The renewables sale is expected to close in the second quarter of 2023.
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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.
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