- Columbus, Ohio utility giant American Electric Power (AEP) is seeing “credible interest” from potential buyers as it conducts a strategic review of its options in regards to its Kentucky Power subsidiary, Nick Akins, the company’s CEO, president and chair, told analysts Thursday.
- The potential sale interest in Kentucky Power comes as AEP pushes ahead with its $2 billion North Central Wind project in Oklahoma. While money from a sale of Kentucky Power could help offset those costs, financing for the 1.5 GW wind project is not contingent on it, Akins said
- AEP reported second quarter earnings of $578 million, or $1.16 per share, up from $521 million, or $1.05 a share during the same quarter last year. The company saw increased demand from both commercial and industrial customers amid the economic recovery, said Chief Financial Officer Julie Sloat.
AEP in April announced plans to slash carbon emissions by 80% by the decade’s end, while zeroing out emissions by 2050.
By 2030, AEP projects it will have added 16,600 MW of renewable generation, Akins told analysts on Thursday’s call. The North Central Wind project “is a first and a very significant step forward in this transition and it provides a solid foundation for our clean energy transformation,” Akins said.
The 199 MW Sundance wind-power facility, the first part of the project, went into service in April, with the remainder of the project — specifically the Maverick and Traverse facilities — still on track to come online in the fourth quarter of 2021 and first quarter of 2022, respectively, Akins said.
Still, AEP has a way to go before meeting that end of the decade goal.
The company, in its quarterly filing with the U.S. Securities and Exchange Commission (SEC), reports it had “1,633 MWs of contracted renewable generation projects in-service” as of June 30.
AEP subsidiaries also had, in addition to this, “155 MWs of renewable generation projects under construction with total estimated capital costs of $221 million,” the company reported.
As for its potential sale of Kentucky Power, AEP said it expects a decision by the end of the year.
Kentucky Power has 166,000 retail customers in eastern Kentucky, with total assets of $2.8 billion and equity of $847 million, AEP told the SEC. Included in the review and potential sale is the Kentucky Transmission Co., a transmission-only utility with assets of $157 million.
“It is a confidential process,” Akins said. “But I can say that we do have a credible interest and it is a competitive process."
But AEP’s work on the North Central Wind project is ready to move ahead whether or not there is a sale of Kentucky Power, with a financing plan in place, Akins said, in response to a question from an analyst.
“To the extent that we would find ourselves in a situation where we were able to transact and bring dollars in the door, we would absolutely be able to work off some of that, otherwise equity issuance and sidestep that,” said Sloat, the CFO.