American Electric Power and Liberty Utilities, a subsidiary of Algonquin Power & Utilities, said Friday they have struck an amended sale agreement that cuts the price of AEP’s Kentucky operations by $200 million and extends the timeline to close the deal.
Liberty will now acquire AEP’s Kentucky operations at a reduced $2.646 billion through a purchase of all Kentucky Power’s and AEP Kentucky Transco’s stock. The original deal had Liberty paying a $2.8 billion sale price. (See PSC OKs Sale of AEP’s Kentucky Operations to Liberty Utilities.)
AEP expects to net approximately $1.2 billion in cash from the sale. It said the reduced revenue means that it will likely record a pre-tax loss ranging from $180 million to $220 million in the third quarter.
Liberty and AEP said they will close on the sale in January. The transaction was earlier slated to close by mid-2022. FERC must still approve the sale.
“This sale will provide significant benefits to customers in eastern Kentucky to help offset volatile fuel prices and support economic growth,” retiring AEP CEO Nick Akins said in a news release. “It also will support AEP’s ability to invest in projects throughout our regulated businesses that will enable the move to a clean, more reliable and resilient energy system.”
AEP CFO Julie Sloat, who will succeed Akins on Jan. 1, said that the new timeline will not affect AEP’s planned equity needs or its operating earnings guidance.
