American Electric Power’s renewable energy subsidiary, AEP Clean Energy Resources, completed its purchase of seven wind farms and one battery installation from Sempra Renewables LLC for approximately $1.05 billion. This supports AEP’s long-term strategy to diversify its generation fleet.
AEP will pay Sempra $584 million in cash, which includes $33 million in working capital, and assume $470 million in existing project debt and tax equity obligations, subject to adjustments.
Five of the wind farms are jointly owned with BP Wind Energy, which will retain its ownership of those projects. Twenty employees will join AEP Clean Energy Resources from Sempra Renewables.
“We’ve targeted a total of $2.2 billion in capital investment in competitive, contracted renewables by 2023,” AEP CEO Nicholas K. Akins said in a statement. "The long-term contracts and attractive returns associated with these existing assets will be immediately accretive to earnings and solidify our projected 5 to 7 percent earnings growth rate."
The seven operating wind farms have an average capacity factor of 37 percent. They are located in Colorado, Hawaii, Indiana, Kansas, Michigan, Minnesota and Pennsylvania.
AEP Renewables also recently signed a separate agreement to purchase a 75 percent interest in the Santa Rita East Wind Project currently under construction west of San Angelo, Texas. AEP Renewables will acquire its share of the project upon completion, which is expected in June.
With this acquisition, AEP’s competitive renewable generation portfolio has grown to 1,075 MW of renewable generation in 11 states. It will increase to 1,302 megawatts upon completion of the Santa Rita project.