CHESHIRE, Ohio — The Gen. James M. Gavin Plant in Cheshire was sold, along with three other plants in Ohio and Indiana, to a pair of private-equity firms Tuesday by Columbus, Ohio-based American Electric Power Co.
The deal with Blackstone and ArcLight Capital Partners LLC was reported to be for $2.17 billion. In addition to the Gavin Plant, the deal also includes facilities in Lawrenceburg, Ind., and Waterford and Mount Sterling in Ohio. All told, the four plants generate about 5,200 megawatts of electricity in Indiana and Ohio.
The Gavin plant alone has a capacity of 2,665 megawatts. One megawatt can provide for the electricity needs of about 1,000 homes.
The Lawrenceburg, Waterford and Mount Sterling facilities are each gas-fired plants, while the Cheshire plant is coal-fired.
The sale is expected to close in the first quarter of 2017. AEP expects to net about $1.2 billion in cash after taxes, repayment of debt and transaction fees. The sale is also 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.
AEP announced in January 2015 that the company was exploring strategic alternatives for these power plants, including a potential sale. All of this generating capacity is located in the region served by the PJM Interconnection.
“AEP’s long-term strategy has been to become a fully regulated, premium energy company focused on investment in infrastructure and the energy innovations that our customers want and need,” said Nicholas K. Akins, AEP chairman, president and chief executive officer. “This transaction advances that strategy and reduces some of the business risks associated with operating competitive generating assets.”
Blackstone and Arc Light Capital each own large power-generating facilities around the world, according to Melissa McHenry, director of external communications for AEP in Columbus. She added that AEP officials met with Gavin employees on Wednesday to explain the situation.
“All of the employees who are at Gavin now will have jobs after the sale,” she said. “The new company wants the employees to continue operating the plant. We had a nice meeting (Wednesday) with the employees of the plant just to explain what has happened.”
Because AEP had been actively seeking a buyer for more than a year, McHenry said the news of the sale wasn’t unexpected to Gavin’s workforce.
“We’ve been doing a strategic review of the four plants for more than a year, so it wasn’t new news for the employees,” she said. “They knew (the sale) was a possibility.”
“Our employees have done an incredible job operating these power plants in PJM, and I’m confident that they will contribute to the future success of Blackstone and ArcLight. We will continue to operate these plants safely in the coming months while working closely with the Blackstone and ArcLight teams to obtain the regulatory approvals necessary to complete the sale. We also will be working with employees and community leaders to ensure a smooth transition,” Akins said.
About 400 employees are affected by the sale, McHenry said, adding that 290 are at Gavin, AEP’s largest plant in Ohio and a major employer in Gallia and Meigs counties in Ohio, and Mason County, W.Va.
Reach Michael Johnson at 740-446-2342, ext. 2102, or on Twitter @OhioEditorMike.