By Amanda Durish Cook
American Electric Power has nearly completed the bidding process to sell more than 5,000 MW of merchant generation in Ohio and Indiana.
AEP spokesperson Tammy Ridout said the company would make a decision before the end of the year about the future of the plants: the 2,640-MW coal-fired General James M. Gavin Power Plant in Cheshire, Ohio; the 850-MW natural gas-fired Waterford Energy Center in southeastern Ohio; the 480-MW gas-fired Darby Electric Generating Station, 20 miles south of Columbus; and the 1,096-MW gas-fired Lawrenceburg Generating Station in Dearborn County, Ind., on the Ohio border.
“We are primarily a regulated utility that provides stable returns for our investors, and we determined that we needed to evaluate whether the risks associated with owning and operating competitive generation fit into our overall strategy,” said Ridout, who said AEP would not discuss potential bidders.
CEO Nick Akins told Bloomberg TV the company has drawn “robust interest” in the plants and expects to make a decision “very soon.”
A sale would cut into AEP’s current generation portfolio of 31,000 MW.
AEP’s acquisitions of the Lawrenceburg, Darby and Waterford plants occurred between 2005 and 2007. Gavin, built in the mid-1970s, is one of the largest coal plants in the nation; AEP has spent millions installing scrubbing technology at the plant.
Ridout said the rest of AEP’s competitive generation in Ohio — representing about 2,700 MW — is also under strategic review, but as part of a separate company evaluation.
AEP began evaluating “strategic options” for its competitive fleet in early 2015, Ridout said. The rest of AEP’s 11-state fleet is under traditionally regulated utility structures with guaranteed rates of return.
