February 13, 2023
AEP AND LIBERTY FILE NEW FERC 203 APPLICATION FOR APPROVAL OF KENTUCKY SALE
COLUMBUS, Ohio, Feb. 13, 2023 – American Electric Power (Nasdaq: AEP) and Liberty, an indirect subsidiary of Algonquin Power & Utilities Corp., today filed a new application with the Federal Energy Regulatory Commission (FERC) under section 203 of the Federal Power Act seeking approval of the sale of AEP’s Kentucky operations to Liberty. The companies are asking FERC for expedited review of the application as they work to close the transaction by April 26, 2023. In December 2022, FERC denied approval of the sale without prejudice and outlined the additional information about customer protections needed to obtain approval.
“AEP and Liberty are committed to the sale and are requesting FERC’s accelerated review of the application so customers in eastern Kentucky can begin benefiting from the transaction,” said Julie Sloat, AEP president and chief executive officer. “In addition to the Kentucky sale, AEP remains focused on advancing the strategic initiatives we have outlined, including the sale of our competitive renewables portfolio and the strategic review of our retail business. These actions are consistent with the equity financing plan, operating earnings guidance and long-term growth rate of 6-7% announced at our analyst day last October.”
The new 203 application addresses the concerns raised in FERC’s December 2022 order and demonstrates that there will be no adverse impact on FERC-jurisdictional customer rates as a result of the transaction. The new application outlines several financial measures Liberty will take for the next five years which include: maintaining the return on equity; maintaining the current cost cap on equity; financing future credit investment at the current credit rating; and capping certain operating and administrative costs.
FERC approval will enable benefits to retail customers in eastern Kentucky and boost economic growth in the region. This includes the following benefits that were part of the Kentucky Public Service Commission’s order approving the transaction:
- $40 million fund to help offset volatile fuel rates through 2023
- A “rate holiday” on the collection of the Big Sandy decommissioning rider for three years
- More than 100 new jobs and expanded local management and customer service, including a new call center in the Kentucky service territory.
Finalization of the transaction is subject to FERC approval and federal clearance pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
American Electric Power, based in Columbus, Ohio, is powering a cleaner, brighter energy future for its customers and communities. AEP’s approximately 17,000 employees operate and maintain the nation’s largest electricity transmission system and more than 224,000 miles of distribution lines to safely deliver reliable and affordable power to 5.5 million regulated customers in 11 states. AEP also is 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 total capacity by 2032. AEP is on track to reach an 80% reduction in carbon dioxide emissions from 2005 levels by 2030 and has committed to achieving net zero by 2045. AEP is recognized consistently for its focus on sustainability, community engagement, and diversity, equity and inclusion. AEP’s family of companies includes utilities AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana, east Texas and the Texas Panhandle). AEP also owns AEP Energy, which provides innovative competitive energy solutions nationwide. For more information, visit aep.com.