American Electric Power Co. Inc. is shopping AEP Texas Inc.'s 355-MW merchant share of the Oklaunion coal plant in Wilbarger County, Texas.
"This is part of our ongoing strategy to become a fully regulated energy company focused on investment in infrastructure and energy innovations. We hope to have a potential buyer for our merchant share of Oklaunion identified by the end of the year and the sale closed in the first half of 2018, pending regulatory approvals," AEP spokeswoman Melissa McHenry said in an Oct. 10 email response that confirmed reports of the potential transaction.
AEP Texas has a 20-year wholesale power contract with AEP Energy Partners LP for its unregulated share of the 650-MW coal plant. This contract expires in January 2027, according to SNL Energy data.
"After sale of the AEP Texas interest in Oklaunion, the lease between AEP Texas and AEP Energy would be terminated, and AEP will no longer have merchant ownership interest in the plant," McHenry said.
AEP utility Public Service Co. of Oklahoma owns 102 MW, or slightly less than 16%, of the Oklaunion plant and operates the facility. McHenry said the utility will retain its ownership interests in Oklaunion and continue to operate the plant after any potential transaction.
AEP management said in July that the company is still exploring the sale of its remaining merchant coal units in Ohio, Conesville unit 4 and Cardinal unit 1, consisting of about 1,250 MW.