To meet its divestiture requirements and pay down some debt,American Electric Power Co. said it will sell a 500 MW naturalgas-fired plant in Texas to TECO Power Services for $265 million incash. Columbus, OH-based AEP was required by the Federal EnergyRegulatory Commission to sell the Frontera facility, located nearthe Texas-Mexican border, to complete its Central and South WestCorp. merger.

AEP said the sale to the TECO Power Services subsidiary wouldclose in March and would have a positive effect on its earnings,with cash to pay down debt. The deal still is contingent uponcompletion of the Hart-Scott Rodino antitrust review.

Frontera is a natural gas-fired combined cycle plant located nearMission, TX in the Rio Grande Valley. CSW Energy built the merchantplant before the AEP merger was completed in June 2000 (see Daily GPI,June 16, 2000). It began simple-cycleoperation in July 1999 and combined-cycle operation in May 2000.

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