COLUMBUS, Ohio, Aug. 2 /PRNewswire-FirstCall/ -- American Electric Power
(NYSE: AEP), through its Columbus Southern Power (CSP) utility subsidiary, has
signed an agreement to purchase Monongahela Power Company's Ohio transmission
and distribution operations for approximately $55 million, plus traditional
working capital adjustments. Monongahela Power is a subsidiary of Allegheny
Energy (NYSE: AYE).
If the Public Utilities Commission of Ohio (PUCO) orders AEP to go through
with this transaction, the transaction will be contingent on the receipt of
required regulatory approvals from the U.S. Securities and Exchange Commission
(SEC), the Federal Energy Regulatory Commission (FERC), and Hart-Scott-Rodino
clearance by the Department of Justice or the Federal Trade Commission. If
approved, the parties expect to complete the sale by the end of 2005.
The purchase agreement responds to an order issued by the PUCO on June 14,
2005, that ordered CSP and Monongahela Power to discuss potential terms and
conditions of a transaction through which Monongahela Power would transfer its
Ohio service territory to CSP. The order was issued in an effort to resolve
issues related to Monongahela Power's planned transition to market-based rates
in Ohio.
"We are pleased that the negotiations with Allegheny were productive and
that we were able to comply with the Commission's order," said Kevin E.
Walker, president and chief operating officer of AEP Ohio. "We now will focus
on working with these communities and their leaders, as well as our new
customers and our new employees on transition and system integration issues
moving forward."
According to the terms of the purchase agreement, AEP will acquire 29,000
Monongahela Power customers in six counties located in southeastern Ohio, and
all transmission and distribution assets located in Ohio serving those
customers, including 1,167 distribution line miles, 59 transmission line miles
and 19 substations. The agreement also calls for the transfer of 24 Allegheny
employees to AEP. The sale will include a power purchase agreement under which
Allegheny will provide AEP 100 percent of its power requirements to serve the
retail load in this area through May 31, 2007. AEP already is interconnected
at transmission voltages with this service territory. CSP intends to take
responsibility for providing service to the customers and facilities on
Jan. 1, 2006, subject to regulatory approvals.
AEP Ohio provides electricity to 1.4 million customers of major AEP
subsidiaries Columbus Southern Power Company and Ohio Power Company in Ohio,
and Wheeling Power Company in the northern panhandle of West Virginia. AEP
Ohio is based in Gahanna, Ohio, and is a unit of American Electric Power.
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.
This report made by AEP and certain of its 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: electric load and customer growth; weather
conditions, including storms; available sources and costs of, and
transportation for, fuels and the creditworthiness of fuel suppliers and
transporters; availability of generating capacity and the performance of AEP's
generating plants; the ability to recover regulatory assets and stranded costs
in connection with deregulation; the ability to recover increases in fuel and
other energy costs through regulated or competitive electric rates; new
legislation, litigation and government regulation including requirements for
reduced emissions of sulfur, nitrogen, mercury, carbon and other substances;
timing and resolution of pending and future rate cases, negotiations and other
regulatory decisions (including rate or other recovery for new investments,
transmission service and environmental compliance); oversight and/or
investigation of the energy sector or its participants; resolution of
litigation (including pending Clean Air Act enforcement actions and disputes
arising from the bankruptcy of Enron Corp.); AEP's ability to constrain its
operation and maintenance costs; AEP's ability to sell assets at acceptable
prices and on other acceptable terms, including rights to share in earnings
derived from the assets subsequent to their sale; the economic climate and
growth in AEP's service territory and changes in market demand and demographic
patterns; inflationary trends; AEP's ability to develop and execute a strategy
based on a view regarding prices of electricity, natural gas, and other
energy-related commodities; changes in the creditworthiness and number of
participants in the energy trading market; changes in the financial markets,
particularly those affecting the availability of capital and AEP's ability to
refinance existing debt at attractive rates; actions of rating agencies,
including changes in the ratings of debt; volatility and changes in markets
for electricity, natural gas, and other energy-related commodities; changes in
utility regulation, including membership and integration into regional
transmission structures; accounting pronouncements periodically issued by
accounting standard-setting bodies; the performance of AEP's pension and other
postretirement benefit plans; prices for power that AEP generates and sells at
wholesale; changes in technology and other risks and unforeseen events,
including wars, the effects of terrorism (including increased security costs),
embargoes and other catastrophic events.
SOURCE American Electric Power
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Related links:
http://www.aep.com
Company News On-Call:
http://www.prnewswire.com/comp/042050.html
CONTACT:
Media, Terri Flora, General Manager,
Communications of AEP Ohio, +1-614-883-6675, or Analysts, Julie
Sloat, Vice President, Investor Relations of American Electric
Power, +1-614-716-2885
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