US based utility American Electric Power (AEP) has signed an agreement to sell four power plants to private-equity firms Blackstone and ArcLight Capital Partners for approximately $2.17bn.
Blackstone and ArcLight Capital have formed a joint venture to acquire the four power plants with combined capacity of approximately 5,200MW.
The power plants include 1,186MW gas-fired power plant in Lawrenceburg, Indiana; 840MW Waterford Energy Center in Waterford, Ohio; 507MW Darby gas-fired power plant in Mount Sterling, Ohio; and 2,665MW Gen. James M. Gavin coal-fired power plant in Cheshire, Ohio.
AEP chairman, president and CEO Nicholas Akins said: “AEP’s long-term strategy has been to become a fully regulated, premium energy company focused on investment in infrastructure and the energy innovations that our customers want and need.
“This transaction advances that strategy and reduces some of the business risks associated with operating competitive generating assets.”
In January 2015, AEP said it is exploring strategic alternatives for these power plants, including a potential sale.
Akins added: “We will continue to operate these plants safely in the coming months while working closely with the Blackstone and ArcLight teams to obtain the regulatory approvals necessary to complete the sale.”
The sale is part of AEP’s efforts to shift its focus from wholesale power markets to regulated utilities, reported Wall Street Journal.
Scheduled to be completed in the first quarter of 2017, the sale is subject to regulatory approvals from the Federal Energy Regulatory Commission, the Indiana Utility Regulatory Commission and federal clearance pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976.