American Electric Power Co. (NYSE: AEP) may sell its Kentucky Power utility if state regulators don’t approve a customer rate increase to help pay for added emissions control costs, according to Bloomberg.
Building a natural-gas fired plant to replace Kentucky Power’s 1,078 MW Big Sandy coal facility, which is scheduled to be retired by 2015, could cost $470 million, a company spokesperson was quoted as saying. AEP, which owns the utility, released a plan June 9 saying it would close Big Sandy Unit 2 and convert Unit 1 to natural gas to comply with proposed rules from the U.S. Environmental Protection Agency (EPA).
AEP has not yet asked state regulators for a rate increase because the rules have not been implemented, the article said.
The likeliest buyers for Kentucky Power could be PPL Corp and Duke Energy Corp., which both own power companies in Kentucky, according to the article. However, PPL just acquired Louisville Gas and Electric Co. on November 1.
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