November 3, 2016 Read More →

A Major U.S. Utility Earmarks $1 Billion for Shift to Renewables

Tom Knox for Columbus Business First:

American Electric Power Company Inc. plans to spend $1 billion on the renewable energy business, in part with funds from the sale of some Ohio power plants.

The Columbus-based electric utility is dipping its toe in the sector, as it expects a capital outlay of $17.3 billion from 2017 to 2019, AEP said Tuesday.

But AEP and fellow utilities’ entrance into the field shows that an industry once largely dominated by small businesses is increasingly competing with large, connected corporations. While AEP won’t be butting in on solar installation on houses, it is targeting everything a step above.

It has formed two related subsidiaries, one that focuses on smaller-scale wind and solar projects and the other focused on larger projects.

AEP Onsite Partners is a “behind-the-meter” company, contracting with, for example, a grocery story that wants solar panels on its roof. Customers include schools, hospitals and businesses.

The target is solar projects that emit 1 to 5 megawatts of power and cost between $2 million and $15 million, Chuck Zebula, AEP’s executive vice president of energy supply, said Tuesday in discussing his company’s third-quarter earnings with investors and stock analysts.

The utility has committed to 21 projects in eight different states with about $75 million in capital investment.

Two years ago another AEP subsidiary installed solar panels near Ohio State University’s football stadium though the amount of power produced is negligible and is more for marketing purposes.

AEP Renewables is in charge of what AEP CEO Nick Akins describes as “utility-scale” projects. These are the wind and solar farms whose power output is sold via long-term power purchase agreements to other utilities, cities and corporations that demand their businesses run on clean energy. Inc., for example, is powering its Central Ohio data centers with wind power. In Utah, AEP (NYSE:AEP) has contracted with Portland-based PacifiCorp on a 20-year, 20-megawatt solar project.

“This stuff is real and it’s happening,” Zebula said.

Full article: AEP plans to spend $1 billion on renewables

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