DER - Solar

AEP agrees to sell its distributed resources business to Basalt

AEP agrees to sell its distributed resources business to Basalt
(AEP's Traverse Wind Energy Center became one of the largest wind farms in operation in the U.S. with an expected output of 3.8 million MWh annually. Courtesy: AEP.)

American Electric Power (AEP) has agreed to sell its distributed resources business, AEP OnSite Partners (OnSite), to funds advised by Basalt Infrastructure Partners LLC. AEP expects to net approximately $315 million in cash after taxes and transaction fees, subject to customary closing adjustments. The sale is expected to close in the third quarter of 2024, pending regulatory approvals.

“I’m grateful to the AEP OnSite Partners team and thank them for their contributions to AEP over the past decade. This sale will allow the distributed resources business and its valued employees to continue to succeed,” said Ben Fowke, AEP interim chief executive officer and president. “AEP is focused on a strong balance sheet as we direct capital to our regulated operations to provide reliable, affordable energy to our customers. The proceeds from the sale will be used to support our financing plan as we make these investments to benefit customers and deliver value to all of our stakeholders.”

AEP OnSite Partners owns, operates, and maintains behind-the-meter assets and distributed energy resources and sells the output to schools, municipalities, hospitals, and other commercial and industrial customers. Its portfolio includes more than 300 MW of projects across nearly 100 U.S. sites.

Basalt plans to retain all 45 employees affected by this sale, which is subject to regulatory approval from the Federal Energy Regulatory Commission and federal clearance pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

RBC Capital Markets served as AEP’s financial advisor for the sale process. Morgan Lewis & Bockius LLP served as legal counsel to AEP.

American Electric Power, based in Columbus, Ohio, boasts nearly 17,000 employees. It operates and maintains more than 40,000 miles of transmission lines, comprising the nation’s largest electric transmission system. AEP controls more than 225,000 miles of distribution lines that deliver power to 5.6 million customers in 11 states. AEP also is one of the nation’s largest electricity producers, with approximately 29,000 megawatts of diverse generating capacity, including nearly 6,000 megawatts of renewable energy. AEP has invested more than $43 billion over the next five years to make the electric grid cleaner and more reliable.

In March, AEP completed the sale of its 50% interest in New Mexico Renewable Development (NMRD) to Exus North America Holdings. AEP netted approximately $104 million in cash after taxes, transaction fees, and other customary adjustments. The sale portfolio includes nine operating solar developments totaling 185 MW and six projects under development with an estimated output of 440 MW.

In August 2023, American Electric Power finalized the sale of its then-1,365 MW renewables portfolio to IRG Acquisition Holdings, a partnership owned by Invenergy, CDPQ, and funds managed by Blackstone Infrastructure, at an enterprise value of $1.5 billion including project debt. That portfolio included 14 projects made up of 1,200 MW of wind and 165 MW of solar in 11 states.

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