American Electric Power (NYSE: AEP), which is about to retire several barge-served coal plants, said March 23 that it has engaged Morgan Stanley & Co. LLC to explore strategic alternatives for its competitive barge transportation subsidiary, AEP River Operations LLC.
AEP River Operations is one of the largest U.S. inland marine transportation companies providing transportation services for bulk commodities, coal and liquids.
AEP said it is committed to completing its review of potential alternatives for River Operations as promptly as practicable. There are no assurances that any particular alternative will be pursued or that any transaction will occur, or on what terms, the company cautioned. The company said it does not plan to release additional information about the status of the review of alternatives until a definitive agreement is entered into or the process is otherwise completed.
AEP is one of the largest electric utilities in the United States, delivering electricity to more than 5.3 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 MW of generating capacity in the U.S.
The company didn’t tie this strategic review to coal plant retirements. But it does have several power plants that take their coal via barge that are due to be shut by June 1 of this year. The AEP deactivations are (with MW ratings from the AEP website):
- Big Sandy 2, Kentucky, 800 MW, deactivate by June 1, 2015
- Clinch River 3, Virginia, 235 MW, June 1, 2015
- Glen Lyn 5-6, Viginia, 335 MW, June 1, 2015
- Kammer 1-3, West Virginia, 630 MW, June 1, 2015
- Kanawha River 1-2, West Virginia, 400 MW, June 1, 2015
- Muskingum River 1-5, Ohio, 1,440 MW, June 1, 2015
- Picway 5, Ohio, 100 MW, June 1, 2015
- Sporn 1-4, West Virginia, 600 MW, June 1, 2015
- Tanners Creek 1-4, Indiana, 995 MW, June 1, 2015
Also, Big Sandy Unit 1 (260 MW) in eastern Kentucky will be switched from coal-to-gas, along with Clinch River Units 1-2 (470 MW in total) in Virginia.
- As the name implies, the Kanawha River power plant is located on the Kanawha River in southern West Virginia. The AEP website indicates only rail and truck deliveries of coal to this plant from nearby mines, but U.S. Energy Information Adminstration coa delivery data shows that the primary delivery route is via river.
- Tanners Creek is located on the Ohio River and takes coal via barge.
- The Big Sandy power plant is located on the Big Sandy River with deliveries via rail and truck.
- The Muskingum River plant is located on a river by that name in Ohio and takes coal via train, with EIA again indicating river as the primary delivery mode.
- Picway is on the Scioto River in central Ohio and takes coal via train. Its other four units were retired long ago.
- Clinch River is on a river by that name in Virginia and takes coal via rail and truck.
- Glen Lyn is on the New River in Virginia and takes coal via rail and truck.
- Kammer is on the Ohio River in northern West Virginia and takes coal via barge.
- Sporn is on the Ohio River and takes coal via barge.
Headquartered in St. Louis, Missouri, AEP River Operations has a fleet of over 2,900 hopper barges. Complementing its barge operations is a fleet of over 80 boats ranging in horsepower from 1,550 hp fleet boats to its lower river big tow 11,000 hp boats. In 2014, it moved over 69 million tons of cargo.