The Virginia State Corporation Commission announced this week that it would allow AEP's Appalachian Power Company to acquire the remaining portion of AEP Ohio's 2,900 MW coal-fired Amos Plant Unit it didn't already own, as well as complete Appalachian's merger with AEP-owned Wheeling Power.
West Virginia must still weigh on on the Amos matter.
However, the Commission fell short of allowing Appalachian Power to acquire half of AEP Ohio's 1,600 MW Mitchell coal-fired power plant. Regulators believed that the risks outweighed the benefits, citing Virginia's lack of knowledge concerning the plant's operations, as well as worries of an increasingly specialized generation fleet. Regulators said approving both acquisitions would have raised the percentage of coal-fired electricity produced by Appalachian Power Company's generation fleet to a projected 87% by 2017.
AEP President and CEO Nicholas Akins released the following statement:
We are pleased that the Virginia Commission approved transfer of the AEP Ohio-owned portion of Amos Plant to Appalachian Power, but the decision to deny the transfer of half of the Mitchell Plant's generating capacity is disappointing. Although the Virginia Commission approved the merger of Wheeling Power with Appalachian Power, denial of the Mitchell Plant ownership transfer is a complicating factor because there will be insufficient generation resources to serve the merged company. AEP intends to bring this matter to the attention of the parties and the Public Service Commission of West Virginia in the asset transfer case and may reevaluate the merger.
The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.