Clean energy giant American Electric Power (NYSE:AEP) is ensuring that the sector in the US is–in simple terms–here to stay.
On Wednesday (July 26), the company announced its plans for what it calls a “major clean energy project”, called the Wind Catcher Energy Connection, will have the capacity to generate roughly 9 million megawatt-hours of new wind energy to customers in Arkansas, Louisiana, Oklahoma, and Texas.
According to the company’s press release, its subsidiaries, Public Service and Southwestern Electricity are asking utility regulators in those four states approval plans to purchase a 2,000 megawatt wind farm under construction in Oklahoma. The project, which is under development by Invenergy, will be the largest single-site wind project in the US, second largest in the world, when it’s finished.
“AEP is moving to a cleaner energy future, driven by new technologies and the expectations of our customers and shareholders. We are diversifying our generation mix to include more renewables, and we’re also investing in a smarter, more efficient and resilient electricity grid to support these new resources and technologies,” Nicholas K. Akins, the company’s CEO said in the release. “This project is consistent with our strategy of investing in the energy resources of the future, and it will save our customers money while providing economic benefits to communities.”
Total investment for the project will total $4.5 billion, inclusive of costs, while the company expects there will be $7 billion in customer savings over a 25-year period.
In an interview with the Washington Post, Akins said “there’s a rebalancing of the generation resources,” in not only the company but in the country.
“There’s no doubt that there’s the expectation to move to that cleaner energy economy, and an opportunity for us to rebalance our fleet, which has historically been predominantly coal,” Akins told the publication.
According to the Post, the project is expected to be completed by 2020, and will allow the company to take advantage of the production tax credit for wind energy. As the publication states, the credit is being phased out, but will still apply to projects that are starting between 2017 and 2019.
Since American Electric Power made the project’s announcement on Wednesday, the company’s share price has increased marginally by 2.67 percent to $70.67 at the close on Thursday (July 27). Year-to-date, the company’s share price has increased 12.25 percent.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.