SWEPCO Finalizes Purchase Of VEMCO – Lower Rates For VEMCO Customers Begin In October
SHREVEPORT, La., Oct. 4, 2010 – American Electric Power (NYSE: AEP) utility subsidiary AEP Southwestern Electric Power Company (SWEPCO) finalized the purchase of Valley Electric Membership Corporation (VEMCO) for approximately $102 million, including payment for VEMCO patronage capital, commonly known as capital credits, after closing of sale. VEMCO serves 30,000 residential, commercial and industrial customers in Caddo, DeSoto, Grant, Natchitoches, Red River, Sabine, Vernon and Winn parishes.
SWEPCO and Valley Electric received approvals from the Department of Justice, the Federal Energy Regulatory Commission, the Federal Trade Commission, and the Federal Communications Commission. Led by Commissioners Foster Campbell and Clyde Holloway, the Louisiana Public Service Commission completed review of the transaction and approved the purchase Sept.15. Approval from the Arkansas Public Service Commission was received Oct. 1.
SWEPCO signed a letter of intent to purchase the assets of Valley Electric Nov. 17, 2009, and the VEMCO and AEP Board of Directors approved the corresponding purchase and sale agreement in January 2010. The Valley Electric Board unanimously recommended a voluntary dissolution of the cooperative, and more than 95 percent of those voting Valley Electric members approved the Plan of Dissolution and sale of assets to SWEPCO. As a result of the acquisition, electric rates for former Valley Electric members will be lowered approximately 20 percent in October.
“We are thrilled to begin serving our new customers and providing them with the opportunity to benefit from 20 percent lower rates and refunds on their capital credits,” said Venita McCellon-Allen, SWEPCO president and chief operating officer. “Valley members also will gain access to SWEPCO’s additional resources for reliability and service, especially during storm recovery. We appreciate their continued patience and understanding during this lengthy process.”
“Our membership is excited about the substantial savings in rates offered by SWEPCO and I’m proud of our Valley members who have weathered the storm of higher rates through the hot summer months,” said Tom Epperson, President and CEO of VEMCO.
The VEMCO acquisition adds 41,000 meters and more than 7,000 miles of distribution lines, 90 miles of transmission lines, 29 substations and three service centers. VEMCO’s 98 employees will join SWEPCO’s work force of some 1,460 across three states.
“Adding Valley’s service area will more than double the size of SWEPCO’s geographic footprint in Louisiana and bring economic growth opportunities with SWEPCO’s lower rates along the I-49 and Toledo Bend corridors,” said McCellon-Allen.
SWEPCO serves 474,000 customers in three states, including 180,000 in Northwest Louisiana (six parishes), 114,000 in western Arkansas, and 180,000 in East and North Texas. SWEPCO’s headquarters are in Shreveport, La. News releases and other information about SWEPCO can be found at www.swepco.com.
American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP’s transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. AEP’s utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east and north Texas). AEP’s headquarters are in Columbus, Ohio. News releases and other information about AEP can be found at www.aep.com.
SWEPCO Corporate Communications:
Scott McCloud, 318-469-2293
Kacee Kirschvink, 318-780-7615
VEMCO Public Relations Contact:
Lester Lee, 318-352-3601, ext. 111
Director, Investor Relations