American DISCOM AEP to Sell Over 1.3 GW of Renewable Portfolio

APAC to Invest US$3.3 Trillion in Power Generation Over Next Ten Years: Wood Mackenzie

Just as America is expanding the renewable power to spearhead the global drive to combat climate change, Columbus based American Electric Power (AEP) has entered into an agreement to sell its 1,365-megawatt (MW) unregulated, contracted renewables portfolio to IRG Acquisition Holdings at an enterprise value of $1.5 billion including project debt.

IRG Acquisition Holdings is a partnership owned by Invenergy, CDPQ and funds managed by Blackstone Infrastructure. As per the official statement of AEP, the sale is expected to close in the second quarter of 2023. At the closing, AEP expects to net approximately $1.2 billion in cash after taxes, transaction fees and other customary adjustments.

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.

“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 CEO.

As previously announced, AEP plans to invest approximately $40 billion over the next five years in its regulated wires and generation business with a focus on adding 17,000 MW of new generation resources and more resilient, efficient transmission and distribution infrastructure to serve customers.

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.

Today, AEP delivers power to about 5.6 million regulated customers in 11 states. The firm is also one of the nation’s largest electricity producers with approximately 31,000 megawatts of diverse generating capacity, including more than 6,900 megawatts of renewable energy. The company’s plans include growing its renewable generation portfolio to approximately 50% of the total capacity by 2032.