Power & Coal - Operations and Strategy
| AEP unit nears closing on lignite asset purchase |  |
November 03, 2009 4:38 PM ET
By Barry Cassell
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American Electric Power Co. Inc.'s Southwestern Electric Power Co. unit hopes to close in the fourth quarter on a deal to acquire lignite mining assets that support the Dolet Hills power plant, AEP said in an Oct. 30 Form 10-Q filing. In April, SWEPCO agreed to purchase 50% of the Oxbow mine's lignite reserves for $13 million, and Dolet Hills Lignite Co. LLC agreed to purchase 100% of all associated mining equipment and assets for $16 million from North American Coal Corp. and its affiliates, Red River Mining Co. and Oxbow Property Co. LLC. Cleco Power LLC will acquire the remaining 50% interest in the lignite reserves for $13 million. North American Coal is a lignite mining unit of NACCO Industries Inc. "SWEPCO expects to complete the transaction in the fourth quarter of 2009," AEP said in the SEC filing. "Consummation of the transaction is subject to regulatory approval by the [Louisiana Public Service Commission] and the [Arkansas Public Service Commission] and the transfer of other regulatory instruments. If approved, DHLC will acquire and own the Oxbow Mine mining equipment and related assets and it will operate the Oxbow Mine. The Oxbow Mine is located near Coushatta, Louisiana and will be used as one of the fuel sources for SWEPCO's and Cleco's jointly-owned Dolet Hills Generating Station." Dolet Hills Lignite Co. is a wholly owned lignite mining subsidiary of SWEPCO that is a consolidated variable interest entity. The SNL database shows the Dolet Hills plant with 672 MW of operating capacity. |
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