AEP Receives Approval From West Virginia Commission To Transfer Amos Generation To Appalachian Power

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Dec 16, 2013, 07:26 ET

COLUMBUS, Ohio, Dec. 16, 2013 /PRNewswire/ -- American Electric Power (NYSE: AEP) received approval Dec. 13 from the Public Service Commission of West Virginia (West Virginia PSC) to transfer the AEP Ohio-owned portion of John E. Amos Plant Unit 3 to Appalachian Power. The West Virginia PSC deferred making a decision about the merger of Wheeling Power with Appalachian Power and the transfer of 50 percent of the 1,600-megawatt (MW) Mitchell Plant to Appalachian Power.

"We are pleased that the West Virginia Public Service Commission approved the Amos transfer and recognized that our Appalachian Power customers would benefit from the low-cost, reliable electricity that Amos can provide," said Nicholas K. Akins, AEP president and chief executive officer. "Although the West Virginia Commission recognized the benefits of acquiring Mitchell, they deferred ruling on the Wheeling Power merger and the transfer of the Mitchell generation, as we had requested given the prior ruling of the Virginia Commission. We are confident that we can address the West Virginia Commission's concerns in a way that will allow our Wheeling Power customers to become part of Appalachian Power and all of our West Virginia customers to benefit from the low-cost Mitchell generation. In the meantime, our Wheeling customers will continue to be served through an agreement with AEP Generation Resources whose generation assets will include 50 percent of the Mitchell Plant."

"We expect the final approvals from the Federal Energy Regulatory Commission by year end which will allow transfer of the 867 megawatts of Amos Plant Unit 3 to Appalachian Power and 50 percent of Mitchell Plant to Kentucky Power by Jan. 1," Akins said.

AEP filed in December 2012 for approval from West Virginia PSC and the Virginia State Corporation Commission (Virginia SCC) to transfer AEP Ohio's two-thirds ownership (867 MW) of Amos Plant Unit 3 (1,300 MW) and 800 MW of the 1,600-MW generating capacity of Mitchell Plant to Appalachian Power. The Virginia SCC agreed to the transfer of Unit 3 of the Amos Plant and the Wheeling Power merger July 31. The Virginia SCC did not approve the ownership transfer of the Mitchell Plant generation.

AEP also filed to transfer ownership of the remaining 800 MW of the 1,600-MW generating capacity of Mitchell Plant to Kentucky Power. The Kentucky Public Service Commission approved that transfer Oct. 7.

The Federal Energy Regulatory Commission (FERC) approved transfer of the ownership of the Amos and Mitchell generating capacity and the merger of Wheeling Power into Appalachian Power April 29. 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 remains pending before the FERC, along with other tariff filings related to corporate separation. AEP anticipates a decision on these related filings by Dec. 31.

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. AEP also owns the nation's largest electricity transmission system, a nearly 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, 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. News releases and other information about AEP can be found at www.aep.com.

This report made by American Electric Power and its Registrant Subsidiaries contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and each of its Registrant Subsidiaries believe that their expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are: the economic climate, growth or contraction within and changes in market demand and demographic patterns in AEP's service territory; inflationary or deflationary interest rate trends; volatility in the financial markets, particularly developments affecting the availability of capital on reasonable terms and developments impairing AEP's ability to finance new capital projects and refinance existing debt at attractive rates; the availability and cost of funds to finance working capital and capital needs, particularly during periods when the time lag between incurring costs and recovery is long and the costs are material; electric load, customer growth and the impact of retail competition, particularly in Ohio; weather conditions, including storms and drought conditions, and AEP's ability to recover significant storm restoration costs through applicable rate mechanisms; available sources and costs of, and transportation for, fuels and the creditworthiness and performance of fuel suppliers and transporters; availability of necessary generating capacity and the performance of AEP's generating plants; AEP's ability to recover increases in fuel and other energy costs through regulated or competitive electric rates; AEP's ability to build or acquire generating capacity and transmission lines and facilities (including the ability to obtain any necessary regulatory approvals and permits) when needed at acceptable prices and terms and to recover those costs (including the costs of projects that are cancelled) through applicable rate cases or competitive rates; new legislation, litigation and government regulation, including oversight of nuclear generation, energy commodity trading and new or heightened requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances, or additional regulation of fly ash and similar combustion products that could impact the continued operation and cost recovery of AEP's plants and related assets; evolving public perception of the risks associated with fuels used before, during and after the generation of electricity, including nuclear fuel; a reduction in the federal statutory tax rate that could result in an accelerated return of deferred federal income taxes to customers; timing and resolution of pending and future rate cases, negotiations and other regulatory decisions, including rate or other recovery of new investments in generation, distribution and transmission service and environmental compliance; resolution of litigation; AEP's ability to constrain operation and maintenance costs; AEP's ability to develop and execute a strategy based on a view regarding prices of electricity, coal, natural gas and other energy-related commodities; prices and demand for power that AEP generates and sells at wholesale; changes in technology, particularly with respect to new, developing or alternative sources of generation; AEP's ability to recover through rates or market prices any remaining unrecovered investment in generating units that may be retired before the end of their previously projected useful lives; volatility and changes in markets for electricity, coal, natural gas and other energy-related commodities; changes in utility regulation, including the implementation of Electric Security Plans and the transition to market and expected legal separation for generation in Ohio and the allocation of costs within regional transmission organizations, including PJM and SPP; AEP's ability to successfully manage negotiations with stakeholders and obtain regulatory approval to terminate the Interconnection Agreement; changes in the creditworthiness of the counterparties with whom AEP has contractual arrangements, including participants in the energy trading market; actions of rating agencies, including changes in the ratings of AEP debt; the impact of volatility in the capital markets on the value of the investments held by AEP's pension, other postretirement benefit plans, captive insurance entity and nuclear decommissioning trust and the impact on future funding requirements; accounting pronouncements periodically issued by accounting standard-setting bodies; and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes, cyber security threats and other catastrophic events.

SOURCE American Electric Power