AEP plans buybacks, debt reduction


NFPA 70E Training

Our customized live online or in‑person group training can be delivered to your staff at your location.

  • Live Online
  • 6 hours Instructor-led
  • Group Training Available
Regular Price:
$199
Coupon Price:
$149
Reserve Your Seat Today
American Electric Power Co. Inc. said it planned to buy back about $500 million in stock and to reduce debt by $800 million, funded in part by proceeds from the sale of its controlling stake in Houston Pipe Line Co.

The company, one of the nation's largest power producers, said the moves would add to earnings, but would be offset in 2005 by the loss of profit from Houston Pipe Line. Therefore, AEP said it still expects 2005 earnings in the range of $2.30-$2.50, generally in line with analysts' estimates.

The company said it will use cash available from completed asset sales to fund the repurchase plan, which will run through 2006.

AEP ended 2004 with $420 million in cash, and closed the sale of Houston Pipe Line Co. in January for about $1 billion.

AEP Chief Executive Michael Morris said the moves would not effect the company's acquisition plans going forward.

"If an appropriate merger opportunity came along, we would find a way to finance it," Morris said at the company's annual analyst and investor meeting in New York. "I think shareholders and rating agencies are very sophisticated and understand the impact of those kinds of activities."

Morris said the company would still be interested in buying DPL Inc (DPL.N: Quote, Profile, Research) and E. ON AG's Louisville Gas & Electric if either company came up for sale, but said AEP has not been in contact with any utilities about a deal.

He said the company might also buy distressed gas generation assets in order to fulfill capacity requirements of the PJM electricity grid.

Chief Financial Officer Susan Tomasky said the debt reductions will consist of $250 million in reductions at the utility level and $550 million of the company's parent bond which matures in 2006.

Shares of AEP rose 35 cents, or 1.1 percent, to $34.07 on the New York Stock Exchange on March 2.

Related News

Are major changes coming to your electric bill?

California Income-Based Electricity Rates propose a fixed monthly fee set by income as utilities and…
View more

Rio Tinto seeking solutions that transform heat from underground mines into electricity

Rio Tinto waste heat-to-electricity initiative captures underground mining thermal energy at Resolution Copper, Arizona, converting…
View more

Brand New Renewable Technology Harnesses Electricity From The Cold, Dark Night

Nighttime Thermoelectric Generator converts radiative cooling into renewable energy, leveraging outer space cold; a Stanford-UCLA…
View more

Former B.C. Hydro CEO earns half a million without working a single day

B.C. Hydro Salary Continuance Payout spotlights executive compensation, severance, and governance at a Crown corporation…
View more

Zero-emission electricity in Canada by 2035 is practical and profitable

Canada 100% Renewable Power by 2035 envisions a decentralized grid built on wind, solar, energy…
View more

WY Utility's First Wind Farm Faces Replacement

Foote Creek I Wind Farm Repowering upgrades Wyoming turbines with new nacelles, towers, and blades,…
View more

Sign Up for Electricity Forum’s Newsletter

Stay informed with our FREE Newsletter — get the latest news, breakthrough technologies, and expert insights, delivered straight to your inbox.

Electricity Today T&D Magazine Subscribe for FREE

Stay informed with the latest T&D policies and technologies.
  • Timely insights from industry experts
  • Practical solutions T&D engineers
  • Free access to every issue

Live Online & In-person Group Training

Advantages To Instructor-Led Training – Instructor-Led Course, Customized Training, Multiple Locations, Economical, CEU Credits, Course Discounts.

Request For Quotation

Whether you would prefer Live Online or In-Person instruction, our electrical training courses can be tailored to meet your company's specific requirements and delivered to your employees in one location or at various locations.