AEP Signs Agreement To Sell New Mexico Solar Assets

American Electric Power (Nasdaq: AEP) has entered into an agreement to sell its 50% interest in New Mexico Renewable Development, LLC (NMRD) to Exus North America Holdings, LLC (Exus). AEP and PNM Resources, which also owns 50% of NMRD, plan to sell the portfolio of 15 solar projects totaling 625 megawatts (MW) to Exus for approximately $230 million subject to true-up adjustments at close. AEP’s share of the sale is approximately $115 million, and AEP expects to receive about $104 million in cash after tax, transaction fees and other customary adjustments. The sale is expected to close in February 2024 and will not have a material impact on financial results.

“This sale is another step forward on our path to simplify our business and focus on investing in our core regulated operations, and we continue to execute on our strategy to de-risk the company. Earlier this year, we completed the $1.5 billion sale of other parts of our contracted renewables business. The proceeds from these sales are strengthening our balance sheet and supporting our continued efforts to create an energy system that benefits customers by providing safe, reliable and affordable electricity,” said Julie Sloat, AEP chair, president and chief executive officer.

AEP launched the sale process for NMRD in June. The NMRD portfolio includes nine operating solar developments totaling 185 MW and six projects under development with an estimated output of 440 MW. The sale is subject to regulatory approval by the Federal Energy Regulatory Commission, New Mexico regulatory approvals associated with one of NMRD’s projects and clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

KeyBanc Capital Markets is serving as financial advisor and Foley & Lardner LLP is serving as legal counsel to AEP and PNM Resources.