American Electric Power (AEP) has announced that its Appalachian Power utility has agreed to purchase the Ceredo power station located in West Virginia from a subsidiary of Reliant Energy for approximately $100 million.

Ceredo is a 505 MW gas-fired, simple-cycle plant designed and built by AEP’s Pro Serv subsidiary for Columbia Energy and began commercial operation in 2001. The plant will be used for peaking power only.

The transaction, which requires regulatory approval, is expected to close in the first quarter of 2006.

Meanwhile, A federal judge has ruled in favour of AEP in its suit against Tractebel Energy Marketing regarding a contract related to a Louisiana power generating facility completed by AEP in 2004. The ruling found that Tractebel had breached the contract and awarded damages of $123 million to AEP.

The November 2000 take or pay contract gave Tractebel the right for 20 years to 800 MW of power and required Tractebel to take 620 MW of capacity and make a fixed monthly payment to AEP.