Dive Brief:
- Officials at Dynegy are "very interested" in purchasing American Electric Power's generation fleet in Ohio, Columbus Business First reported, after state regulators last week rejected a power purchase agreement (PPA) that would have guaranteed the facilities a profit.
- Analysts say it is likely AEP will sell the plants following the decision, and though Dynegy lobbied against the PPAs the company is seen as a likely suitor for the assets.
- AEP has proposed PPAs for other generation facilities, but would have to show better benefits to consumers.
Dive Insight:
Business is business.
Dynegy officials lobbied against guaranteed profits for AEP's generation fleet in Ohio, meeting with regulators and the state's governor in an attempt to scuttle the arrangement. Now that it appears those efforts were successful, they may be first in line to acquire the power plants.
Columbus Business First reports Dynegy would likely be interested in the facilities where it would already own a stake alongside AEP. Last year Dynegy reached a deal to pay $2.8 billion for Duke Energy's retail electricity business in Ohio, Pennsylvania and Michigan and the utility's stake in 10 Midwest power plants totaling 6,100 MW in the PJM Interconnection's footprint. That gives the company about 5,000 MW in Ohio once the deal goes through.
Last week Ohio utility regulators rejected AEP's proposal to guarantee income for two aging coal plants, though it did say the deals would have been legal. The utility has similar proposals still pending for larger facilities, but analysts say the decision likely means AEP will sell the plants.
"Dynegy would be very interested," Dean Ellis, managing director of regulatory affairs for Dynegy, told Columbus Business First.
