American Electric Power Plans to Sell U.S. Wind, Solar Farms
American Electric Power Plans Sale of U.S. Wind and Solar Farms
(Bloomberg) -- American Electric Power is planning to sell some or all of of its renewable-energy portfolio in order to focus on its core utility business.
“This move will simplify and de-risk the company while allowing us to redeploy capital to our regulated businesses, where we see a meaningful pipeline of investment opportunities to enhance service for customers across our footprint,” AEP said Thursday in its fourth-quarter earnings report.
The Columbus, Ohio-based company owns four solar farms and 10 wind farms with another under construction across the U.S. that could be sold. An AEP representative declined to comment on the value of those assets, which are owned through its subsidiary AEP Renewables and have a combined capacity of about 1,600 megawatts of power.
BloombergNEF estimates U.S. wind farms have an average buyout value of about $920,000 per megawatt, while solar farms sell for an average of $800,000. That would value AEP’s portfolio at about $1.45 billion.
Wind and solar farms are gaining appeal with many companies and investors drawn to less polluting energy alternatives to fossil fuels as U.S. President Joe Biden pushes for a pollution-free electric grid by 2035. AEP’s move is also the latest example of a big power company selling off non-core assets to focus on its key regulated businesses.
Read more: American Electric Power 4Q Operating EPS Beats Estimates
AEP shares rose 1.6% to $85.95 at 10:27 a.m. in New York, its biggest intraday increase in about three weeks.
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