AEP, Kentucky Power ask lawmakers to allow securitization of Mitchell plant to fund Kentucky generation

Kentucky Power and American Electric Power officials told the Senate Natural Resources Committee they plan to ask the General Assembly to authorize securitization of Kentucky Power’s 50% undivided interest in the Mitchell Power Plant, a move they said would lower the plant’s nonfuel costs and free capital to invest in dispatchable generation located inside Kentucky.

The company representatives said securitization would refinance the Mitchell asset at lower rates, producing an estimated reduction in annual nonfuel ownership costs of roughly $34 million and offsetting about one-third of the expected cost of adding a new in-state generating unit. They said the proposal would not require closing Mitchell and that Kentucky Power would retain its 50% ownership unless and until the company later pursued a sale.

Cindy Wiseman, president and chief operating officer of Kentucky Power, introduced the company team and told senators the utility’s priorities are “to stabilize and lower rates, to reduce rate volatility, and expand generation within the Commonwealth.” Bill Fuhrman, president and chief executive officer of American…