American Electric Power Sells More Than 1 GW of Renewable Portfolio to IRG Aquisition

• American Electric Power (AEP) has entered into an agreement to sell its 1,365-megawatt (MW) unregulated, contracted renewables portfolio to IRG Acquisition Holdings at an enterprise value of $1.5 billion. The sale portfolio includes 14 projects, representing 1,200 MW of wind and 165 MW of solar in 11 states.

What happened? 

American Electric Power (AEP), a Columbus-based energy company, has entered into an agreement to sell its 1,365-megawatt (MW) portfolio of renewable energy projects to IRG Acquisition Holdings, a partnership owned by Invenergy, CDPQ and funds managed by Blackstone Infrastructure. The sale portfolio includes 14 projects, representing 1,200 MW of wind and 165 MW of solar in 11 states. The sale will take place at an enterprise value of $1.5 billion including project debt and is expected to close in the second quarter of 2023. AEP expects to net approximately $1.2 billion in cash after taxes, transaction fees and other customary adjustments. 

Why does it matter? 

This sale is part of AEP's commitment to de-risking the company and prioritizing investments in its core regulated businesses. The proceeds from the sale will be directed to the significant pipeline of opportunities to enhance service for customers across its footprint and advance its clean energy transition. AEP plans to invest approximately $40 billion over the next five years in its regulated wires and generation business with a focus on adding 17,000 MW of new generation resources and more resilient, efficient transmission and distribution infrastructure to serve customers. The sale is also subject to satisfaction of customary closing conditions, including regulatory approval by the Federal Energy Regulatory Commission, clearance from the Committee on Foreign Investment in the United States and approval under applicable competition laws. 

What's next? 

AEP currently delivers power to about 5.6 million regulated customers in 11 states and is one of the nation’s largest electricity producers with approximately 31,000 megawatts of diverse generating capacity, including more than 6,900 megawatts of renewable energy. The company's plans include growing its renewable generation portfolio to approximately 50% of the total capacity by 2032. AEP will continue to pursue its long-term commitment to sustainability and clean energy while providing reliable, cost-effective service to its customers across the nation.