Algonquin Power & Utilities Corp T.AQN

Alternate Symbol(s): AQN | T.AQN.PR.A | AGQPF | T.AQN.PR.D

Utilities Utilities - Diversified

Algonquin Power & Utilities Corp. is a Canada-based diversified international generation, transmission, and distribution company. The Company through its two business groups, the Regulated Services Group, and the Renewable Energy Group, provides sustainable energy and water solutions through its portfolio of electric generation, transmission, and distribution utility investments to over one million customer connections, largely in the United States and Canada. The Company is engaged in renewable energy through its portfolio of long-term contracted wind, solar, and hydroelectric generating facilities. The Company owns, operates, and/or has net interests in over four gigawatts (GW) of installed renewable energy capacity. The Company is focused on its expanding global pipeline of renewable energy and electric transmission development projects, organic growth within its rate-regulated generation, distribution and transmission businesses, and the pursuit of accretive acquisitions.

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Algonquin Power & Utilities Corp

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Post by retiredcfon Jul 06, 2022 8:51am

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Post# 34804468

RBC

July 6, 2022

Algonquin Power & Utilities Corp.
Pending Kentucky Power acquisition receives key regulatory approval; potentially closing in Q3

NYSE: AQN | USD 13.29 | Outperform | Price Target USD 17.00

Sentiment: Neutral Our Take: Neutral

The recent approval from the Public Service Commission (PSC) of West Virginia provides some visibility for the completion of Algonquin's pending (fully funded) acquisition of Kentucky Power potentially in Q3/22. The market has been expecting the acquisition to close for some time, and management previously guided to a mid-2022 completion date.

Details

The PSC of West Virginia issued an order granting consent for Appalachian Power Company (an AEP Company) to enter into ownership and operating agreements with modifications for the jointly owned Mitchell coal-fired generation facility in West Virginia. The companies will also make some non-substantive edits to the ownership agreement, within 10 days of the order, to ensure that it is consistent with the modified operating agreement.
After the Mitchell plant ownership and operating agreements (with modifications) are finalized and approved by the PSC of West Virginia, there will be a 60-day period for the Federal Energy Regulatory Commission (FERC) to approve the transaction. As a result, we believe the transaction may close in the back half of Q3/22.
As background, the Kentucky PSC does not want Kentucky Power to operate and utilize the Mitchell facility after 2028, but the PSC of West Virginia wants Appalachian Power to operate the Mitchell facility beyond 2028 (additional capex required). Details of a transfer or sale (or alternative arrangement) of Kentucky Power's interest in the Mitchell facility to Appalachian Power will be decided at a later date. However, the PSC of West Virginia indicated that they believe Appalachian Power should pay no more than the net salvage value of the plant and equipment.