AEP Completes Purchase Of 724 MW Wind Assets From Sempra
American Electric Power (AEP) announced that its competitive renewable energy subsidiary, AEP Clean Energy Resources, has completed the purchase of Sempra Renewables LLC and its 724 megawatts (MW) of operating wind generation and battery assets for approximately US$1.05 billion. AEP will pay Sempra US$584 million in cash, which includes US$33 million in working capital, and assume US$470 million in existing project debt and tax equity obligations, subject to adjustments.
The purchase includes all or part of seven wind farms and one battery installation in seven states. Following five of the wind farms are jointly owned with BP Wind Energy:
- Auwahi Wind in Hawaii (wind and battery storage)
- Flat Ridge 2 Wind in Kansas
- Mehoopany Wind in Pennsylvania
- Cedar Creek 2 Wind in Colorado
- Fowler Ridge 2 Wind in Indiana
BP Wind Energy will retain its ownership share of those projects.
AEP chairman, president and chief executive officer Nicholas K. Akins said - "We've targeted a total of $2.2 billion in capital investment in competitive, contracted renewables by 2023. The long-term contracts and attractive returns associated with these existing assets will be immediately accretive to earnings and solidify our projected 5 to 7 percent earnings growth rate."
The seven operating wind farms have an average capacity factor of 37 percent. They are located in Colorado, Hawaii, Indiana, Kansas, Michigan, Minnesota and Pennsylvania. They all have long-term, power purchase agreements (PPAs) for 100 percent of the energy produced with investment-grade investor-owned utilities, municipal utilities and electric cooperatives. The project PPAs have an average remaining life of 16 years. AEP operating units AEP Ohio, Indiana Michigan Power and Southwestern Electric Power Company have PPAs with two of the wind farms.
AEP also will acquire all of Sempra Renewables' wind projects currently in development.
Wells Fargo Securities LLC served as the exclusive financial advisor and Bryan Cave Leighton Paisner served as legal advisor for AEP for the acquisition.
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