Public Service Commission approves sale of Kentucky Power
FRANKFORT, Ky. (WYMT) - The Kentucky Public Service Commission officially approved the sale of Kentucky Power from American Electric Power to Liberty Utilities, Inc. Thursday.
After an announcement in October 2021, Liberty officially filed to purchase Kentucky Power and AEP Kentucky Transmission Company, LLC in January 2022 for more than $2.8 billion, including taking on more than $1.2 billion in debt. American Electric Power is set to net $1.4 billion in cash after taxes and fees, which company officials indicated to the KSPC they would re-invest in renewable energy in other subsidiaries.
Liberty told the KPSC that it plans to retain all Kentucky Power employees with the same or similar pay and benefits.
The sale was approved with modifications, including a requirement that Kentucky Power customers receive a $30 million payment to make up for continued subsidization of activities with other AEP affiliates. Failure to address the issue will result in an additional $45 million payment to Kentucky Power customers.
Other modifications require the creation of a $43.5 million fund to offset restoration expenses and a proposed $40 million fuel adjustment clause credit.
Early Thursday, officials with Kentucky Power released a statement about the sale:
“The order from the KPSC affirms that Liberty’s ownership of Kentucky Power is the best path forward for customers, communities and employees. This is a significant step in completing the transaction by second quarter 2022 to ensure that customer benefits associated with Liberty’s commitments to customers and supporting economic growth in eastern Kentucky are realized. AEP is reviewing the details of the order and the additional conditions it contains. Additional regulatory approvals from the Federal Energy Regulatory Commission and the Public Service Commission of West Virginia are expected in the near future to allow the sale to be finalized by second quarter 2022 and the related benefits for customers to begin.”
Kentucky Power serves approximately 165,000 customers across 20 counties in Eastern Kentucky. The company also owns and operates the Big Sandy Natural Gas Plant in Lawrence County, and has a stake in the Mitchell coal-fired plant in Marshall County, W. Va.
You can read the documentation related to Wednesday’s ruling here.
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