AEP receives FERC approval to transfer generating assets

AEP Generation Resources advances AEP's corporate separation, following FERC approvals to transfer Ohio generation assets, enabling an unregulated company structure and ownership transfers to Appalachian Power and Kentucky Power amid full electricity competition.

COLUMBUS, Ohio – American Electric Power received approval from the Federal Energy Regulatory Commission FERC to separate its Ohio generating assets from its Ohio distribution and transmission operations and transfer these assets to a competitive generation company and regulated affiliates. AEP is awaiting FERC approval of additional transactional agreements between AEP affiliates.

“With these approvals, we reached another milestone in the transition to full electricity competition in Ohio. The FERC decisions are consistent with the Ohio capacity case decision and allow us to move forward with the ownership transfer of our Ohio generation-related assets into a separate unregulated generation company and to other AEP operating companies,” said Nicholas K. Akins, AEP president and chief executive officer. “We anticipate decisions from FERC on our other related filings soon and expect to fully separate our Ohio generation from our Ohio utility operations at the end of this year.

“We will continue to work with regulators in Kentucky, Virginia and West Virginia, where the renewable portfolio standard guides planning, to seek the additional approvals necessary to transfer ownership of the Mitchell Plant and the AEP Ohio-owned share of the Amos Plant to Appalachian Power and Kentucky Power to help satisfy their existing and long-term generation requirements,” Akins said.

The FERC’s April 29 decision approved the transfer of AEP Ohio-owned generation to a new wholly owned company – AEP Generation Resources Inc. The FERC also approved further transfer of AEP Ohio’s two-thirds ownership 867 MW in John E. Amos Plant Unit 3 1,300 MW and ownership of 800 MW of the 1,600-MW generating capacity of Mitchell Plant to Appalachian Power as well as ownership transfer of the remaining 800 MW of Mitchell Plant to Kentucky Power, aligning with AEP's coal generation plans for these facilities.

Additionally, the FERC approved merging AEP’s Wheeling Power utility into Appalachian Power as part of broader Ohio electricity service upgrades initiatives across the region.

AEP’s application to terminate the interconnection agreement, or pool, that exists among AEP’s utilities in the Midwest and for approval of a new Power Coordination Agreement among Appalachian Power, Kentucky Power and Indiana Michigan Power, which follows the FERC-PJM integration order and remains pending before the FERC, along with other tariff filings related to corporate separation. AEP anticipates implementing corporate separation and the other items in the related filings by Dec. 31, 2013.

American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5.3 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S., and recently reported higher summer profits tied to demand. AEP also owns the nation’s largest electricity transmission system, a 40,000-mile network that includes more 765-kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined.

AEP’s transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. AEP’s utility units operate as AEP Ohio, whose customers saw a rate reprieve after regulatory review, 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 and east and north Texas. AEP’s headquarters are in Columbus, Ohio.

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