AEP Completes Sale Of Its Share Of South Texas Project To Co-Owners; Company Preparing To File For Stranded Cost Recovery In Texas
COLUMBUS, Ohio – American Electric Power (NYSE: AEP) subsidiary AEP Texas Central Company (TCC) completed the sale of its 25.2 percent share of the South Texas Project (STP) nuclear plant to STP co-owners Texas Genco LLC and CPS Energy (formerly City Public Service of San Antonio) for approximately $314 million. AEP will use the proceeds from the sale to reduce capitalization at AEP Texas Central Company.
STP is a 2,500-megawatt nuclear plant located in Matagorda County, Texas, approximately 90 miles southwest of Houston. AEP's 25.2 percent share of the plant was approximately 630 megawatts.
Texas Genco purchased 13.2 percent of STP for approximately $164 million and CPS Energy purchased 12 percent of STP for approximately $150 million, after adjustments. Texas Genco now owns 44 percent of STP, and CPS Energy owns 40 percent. The City of Austin continues to own 16 percent of STP. The plant is operated by STP Nuclear Operating Company.
"With the closing of the sale of AEP´s share of STP, AEP Texas enters the last stage of the transition to the competitive market envisioned by Texas lawmakers and the Governor when they enacted the industry restructuring legislation in 1999. We will file at the Public Utility Commission of Texas (PUCT) soon for the true-up of the difference between the book value and the market value of our generation, referred to as our stranded costs, as authorized by the statute," said Charles Patton, AEP Texas, president and chief operating officer.
AEP announced plans in December 2002 to sell all 4,497 MW of the generation assets owned by its TCC subsidiary to determine their market value for calculating stranded costs (the amount that the book value exceeds the market value of the assets) under Texas restructuring legislation. AEP completed sale of 3,813 MW of these generating assets, including eight natural gas plants, one coal-fired plant and one hydro plant, to a joint venture of Sempra Energy Partners and Carlyle/Riverstone Global Energy and Power Fund July 1, 2004.
AEP continues to work toward completing the sale of TCC's 7.8 percent share of Oklaunion Plant but expects to receive approval from the Public Utility Commission of Texas to proceed with its stranded costs recovery filing while the Oklaunion sale proceeds toward closing.
American Electric Power owns more than 36,000 megawatts of generating capacity in the United States and is the nation´s largest electricity generator. AEP is also one of the largest electric utilities in the United States, with more than 5 million customers linked to AEP's 11-state electricity transmission and distribution grid. The company is based in Columbus, Ohio.
Source: AEP