American Electric Power said it is off to an “excellent start for 2019,” beating analysts’ expectations for the first quarter and completing a deal with Sempra Energy that adds more than 700 MW of wind generation.
The Columbus, Ohio-based company began the week by announcing its competitive renewable subsidiary, AEP Clean Energy Resources, had completed the purchase of Sempra Renewables for $1.05 billion. The deal includes Sempra’s 724-MW portfolio of operating wind generation, battery assets and development staff.
Asked during a conference call with financial analysts why AEP is buying, and not building, wind and solar, CFO Brian Tierney said the deal takes the company to “the next level.”
“We’re very selective in the assets we looked at, looking for high-quality contracted assets with creditworthy counterparties,” Tierney said. “What this opportunity brought with it was a lot of wind, some battery, contracted with high-quality counterparties, but it also brought a team with it, and that team is something that we didn’t organically have from a development standpoint. So we got not just a team, but also development projects in the pipeline that we wouldn’t have had otherwise.”
The acquisition means AEP has now spent $1.5 billion of the $2.2 billion it has committed to renewable energy projects.
“We’re looking at opportunities as they become available,” Tierney said.
CEO Nick Akins did not participate in the call. AEP said Akins was not “feeling well,” but he expects to be back at work “soon.”
The company’s share price rose from its $83.52 open on Thursday to close the week at $84.71. It is up 32.1% since reaching its nadir of $64.11 in June.
— Tom Kleckner