American Electric Power (AEP) has extended a deadline for the submittal of bids on all 29 of the power generation units of its AEP Texas Central Co. subsidiary, which have a total capacity of 4,497 MW.

AEP is seeking bids on the assets in an effort to accurately determine their market value and the company’s associated stranded costs. The assets include 12 separate plant sites with a net book value of $1.8 billion as of Dec. 31, 2001.

The company’s plans to divest these assets, first announced Dec. 17, 2002, received approval from the Public Utility Commission of Texas (PUCT) in May. Under the approval, the PUCT said AEP Texas Central could sell its generation assets in order to determine by how much the book value exceeds the market value of the assets.

AEP had originally set a deadline for the submittal of bids on the assets of July 18, noted AEP spokesperson Melissa McHenry. “It was always flexible and so just because of the level of interest that we’ve received and also, working through the process, the deadline’s been moved a little bit,” she told NGI. A date for the new deadline hasn’t been set, but the company is looking at the first part of August, McHenry said.

“That’s just the first phase of the bid process,” the spokesperson said. The first phase is a non-binding, initial bid process, McHenry noted, while the second phase involves a short list of bidders on the assets.

AEP hopes to finalize an agreement for the sale of the plants by late October, McHenry confirmed, with two caveats attached to that timeline. First, it assumes that there are no additional changes in the timing of the bid process and, second, that a single purchaser would buy all of the plants. “We would prefer to have one buyer,” she said, but the company would also “work with multiple buyers, ideally by type of fuel.”

Plants included in the divestiture are:

AEP in June noted that the divestiture plan does not include power plants owned by other AEP subsidiaries in Texas — AEP Texas North Co. or Southwestern Electric Power Co. — as AEP is not seeking stranded cost recovery for those generating assets.

©Copyright 2003 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.