Tuesday, January 6, 2015

More coal-fired power plants for sale

American Electric Power is shopping its merchant power plants, including several along the Ohio River, according to the electric utility trade press.

Among the plants for sale is Gavin at Cheshire, Ohio. Because Ohio has deregulated its electric utility industry, AEP has separated its generation and distribution assets.

As the article explains, merchant power plants sell electricity into the open market, while power plants in tightly regulated states like West Virginia have rates that are negotiated with state agencies. Companies can expect a certain rate of return in regulated states, but with merchant plants the business is far more risky.