Dive Brief:
- Officials at American Electric Power won't directly tie the company's Ohio rate proposal to the fate of its merchant fleet, but SNL reports the two are closely linked.
- During an earnings call with investors and analysts, AEP chief Nicholas Akins said the company's goal was to remove volatility from its unregulated investments.
- AEP recently hired Goldman Sachs to advise on the potential sale of seven power plants in Ohio and Indiana as power prices have fallen.
Dive Insight:
Earlier this month it was revealed that American Electric Power is considering the sale of seven power plants that comprise its merchant generation fleet — five coal and two natural gas facilities located in the PJM Interconnection. The decision whether to do so appears to be tied to a rate plan and purchased power agreement Ohio regulators are considering, SNL reports.
During the company's earnings call, AEP Chairman, President and CEO Nicholas Akins told analysts, "Obviously, we are going to have to go through the evaluation process to determine exactly what we do, but our going-in position is we are a regulated utility and the two things we were trying to get out of this process was to make sure we took the volatility out of that, out of the unregulated business, and were able to make long-term investments."
AEP reported fourth-quarter 2014 earnings of $191 million or 39 cents/share, compared with $346 million during the same period a year before. Operating earnings were $232 million.
Atkins said the company saw positive overall load growth for the fifth consecutive quarter and experienced commercial sales increases for the year for the first time since 2008. "Residential sales growth also increased year-over-year, which is consistent with the economic improvement in the states where we operate," Atkins said. "Although the significant growth that we've seen from shale gas operations may be impacted by declining oil prices, other parts of our diversified industrial base should benefit from lower fuel prices."
