AEP Generating seeks Indiana okay for sale of 1,096-MW Lawrenceburg plant

AEP Generating Co. (AEG) and Lightstone Generation LLC, acting on behalf of itself and its wholly owned subsidiary Lawrenceburg Power LLC, on Oct. 12 petitioned the Indiana Utility Regulatory Commission for approval of the sale of AEG’s 1.096-MW Lawrenceburg Generating Facility, located in Lawrenceburg, Indiana, to the Lightstone entities.

Lightstone Generation is a newly-established joint venture of The Blackstone Group LP, a leading global alternative asset manager, and ArcLight Capital Partners LLC, a specialized private equity firm exclusively focused on the energy industry. Lawrenceburg is a combined-cycle, gas-fired facility.

On Sept. 13, AEG and its affiliate, AEP Generation Resources Inc., entered into an agreement with Lightstone Generation (f/k/a Burgundy Power LLC) for the sale of all of AEG’s right, title, and interest in the Lawrenceburg facility to Lightstone Generation, subject to the satisfaction of various conditions, including the receipt of applicable regulatory approvals.

The application said the Lightstone entities have the necessary technical, financial, and managerial capability to own and operate the facility. Blackstone and ArcLight have significant investments and experience owning and operating power generation in North America and Europe. Combined they have managed, owned, and/or operated more than 38,000 MW of power generation globally, including operations In the PJM Interconnection, the Midcontinent Independent System Operator, New York ISO, the Electric Reliability Council of Texas and the California Independent System Operator markets.

The joint venture will leverage the collective management and capital resources of Blackstone and ArcLight, including Blackstone’s Kindle Energy LLC asset management team and ArcLight’s affiliates Consolidated Asset Management Services (CAMS) and Eastern Generation LLC. Kindle currently provides asset management services for Blackstone with respect to 1,600 MW across four power plants and a coal mine in Texas. CAMS currently manages over 30 power plants representing over 8,000 MW of generating capacity, and Eastern Generation owns and operates seven facilities for ArcLight with a total capacity of approximately 5,000 MW.

American Electric Power (NYSE: AEP) announced Sept. 14 that it has signed an agreement to sell four competitive power plants totaling approximately 5,200 MW for about $2.17 billion to a newly formed joint venture of Blackstone (NYSE: BX) and ArcLight Capital Partners LLC. Besides Lawrenceburg, the to-be-sold plants are:

  • Waterford Energy Center, 840 MW, natural gas, located at Waterford, Ohio;
  • Darby Generating Station, 507 MW, natural gas, located at Mount Sterling, Ohio; and
  • Gen. James M. Gavin Plant, 2,665 MW, coal, located at Cheshire, Ohio.

The sale is expected to close in the first quarter of 2017. It is subject to regulatory approvals from the Federal Energy Regulatory Commission, the Indiana Utility Regulatory Commission and federal clearance pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.