AEP Inks Deal to Bolster T&D Developments in Ohio, Indiana

Researched by Industrial Info Resources (Sugar Land, Texas)--With Ohio and Indiana "experiencing growth that has not been seen for decades," utility American Electric Power Company Incorporated (NASDAQ:AEP) (AEP) (Columbus, Ohio) recently agreed to sell a 19.9% equity interest in two of its transmission and distribution (T&D) subsidiaries, AEP Ohio and Indiana & Michigan Power, to investment firm KKR & Company Incorporated (NYSE:KKR) (New York, New York) and Canada's Public Sector Pension Investment Board. Both subsidiaries are regulated utilities that build, own and operate T&D infrastructure. Industrial Info is tracking more than $3.1 billion worth of active and planned T&D projects from AEP Ohio and Indiana Michigan Power.

Click on the image at right for a graph detailing active and planned T&D projects from AEP Ohio and Indiana Michigan Power, by state.

AEP expects the deal will close in the second half of the year. "This transaction allows AEP to efficiently finance a growing segment of its business in the Midwest," the company said in a press release. "The proceeds will support AEP's five-year, $54 billion capital growth plan, which includes investments in transmission, distribution and generation projects and will offset a significant amount of AEP's $5.35 billion equity financing needs through 2029."

Ohio accounts for the most active and planned AEP investments of the three affected states, including the West Van Wert-Ohio City Transmission Line Rebuild Project, which started construction last spring. AEP Ohio plans to improve electric reliability for customers in Van Wert County with the $20 million expansion of the Roller Creek Substation in Ohio City and the $14 million expansion of the West Van Wert Substation in Van Wert, which will include new 69-kilovolt (kV) equipment at both facilities and a new, five-mile line connecting them. Both segments are expected to be completed this summer.

AEP Ohio also started construction on a $50 million rebuild of a line from Howard to Shelby, which runs 36 miles and involves replacing aging wooden poles with steel poles. The rebuild is expected to wrap up in the spring of 2026. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can read detailed reports on the Roller Creek and West Van Wert substation expansions, and the Howard-to-Shelby rebuild.

AEP is preparing to begin work in the coming months on its $29 million construction of the Celtic Substation in Plain City, Ohio, which includes installing a 1.5-mile overhead line to tie-in with an existing system, and its $25 million construction of the Grace Substation in Stockport, Ohio, which includes rebuilding a 10.5-mile overhead line to McConnelsville. Currently, the projects are set to wrap up in the Novembers of this year and next year, respectively. Subscribers can read detailed reports on the Celtic and Grace substation projects. Indiana Michigan Power has a series of projects under construction across northern Indiana, including several that are slated to wrap up later this year as part of AEP's Fort Wayne-Bluffton Transmission Line Rebuild Project. The subsidiary is updating about 26 miles of line between Bluffton and Fort Wayne, including:

• a 9.5-mile, $36.3 million stretch from Bluffton to Geneva; see project report
• a two-mile, $3 million stretch within Ossian; see project report
• a four-mile, $5 million stretch from Ossian to Uniondale; see project report

The Ossian-to-Uniondale project will provide looped service between the two substations; other improvements include double-circuit lines and steel poles.

"Executing on our five-year capital plan is critical to meeting growing energy demand and bolstering reliability for our customers," said Bill Fehrman, the chief executive officer of AEP, in the press release. "Electricity demand is anticipated to grow significantly in AEP's footprint by the end of the decade."

Subscribers to Industrial Info's GMI Project and Plant databases can click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.

Subscribers can click here for a full list of detailed reports for active and planned T&D projects from AEP Ohio and Indiana Michigan Power.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).