AEP selling Kentucky Power, AEP Kentucky Transco to Liberty for more than $2.8B
American Electric Power (AEP) announced plans this week to sell its Kentucky operations — Kentucky Power and AEP Kentucky Transco — to Algonquin Power & Utilities Corp.’s utility business, Liberty.
Expected to close in Q2 2022, pending regulatory approvals, the sale is projected to proceed at a value of $2.846 billion. It follows a competitive bidding process, and the results will affect 360 employees, who will all transfer to Liberty upon completion of the sale.
“Kentucky Power and its employees are an important part of the communities in eastern Kentucky, and I am grateful for their valuable contributions to AEP,” Nicholas Akins, AEP chairman, president and CEO, said. “Liberty’s commitment to safety and operational excellence will allow Kentucky Power employees to continue their critical work producing and delivering reliable power for customers and communities. At the same time, the sale will strengthen AEP’s ability to invest in projects that will support a resilient, cleaner energy system.”
For Liberty, the sale will bring with it another approximately 165,000 electricity customers of Kentucky Power and all the assets of AEP Kentucky Transco’s regulated transmission business, adding them to a utility business that already provides regulated electricity, natural gas, water, and wastewater services to more than 1 million customers across the United States and Canada. Liberty will purchase the entire stock of Kentucky Power and AEP Kentucky Transco, netting AEP approximately $1.45 billion at the end of sale.
AEP intends to use the profits from the sale to eliminate forecasted equity needs in 2022 and to invest in regulated renewables, transmission, and other projects. Meanwhile, Liberty will assume possession of and responsibility for all assets and liabilities at its new holdings, save for established pensions and other post-retirement benefit obligations from the period impacted employees were employed by AEP instead.
The sale will be subject to oversight by the Kentucky Public Service Commission and the Federal Energy Regulatory Commission.
