COLUMBUS, Ohio, March 18, 2003 -
American Electric Power (NYSE: AEP) has sold its water heater rental program to America´s Water Heater Rentals (AWHR)
for $38 million.
The water heater rental program provided customers with the opportunity to rent electric water heaters from AEP. The program, which AEP started in 1988, currently serves 90,000 customers in Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and West Virginia.
AEP will record an after-tax loss of $2.6 million on the sale in the first quarter of 2003. In 2002, AEP also recorded a $4.6 million after-tax, impairment-related loss on the water heater rental program.
“We stopped installing and renting water heaters through plumbing contractors in 2000, but we continued to repair and service the units already installed,” said Marsha Ryan, senior vice president - customer operations for AEP. “Selling the program to AWHR allows us to concentrate on our core utility businesses. We are confident that the customers of the program will continue to receive quality service from a company focused on the rental business.”
As part of the sale, AWHR acquired the customer contracts and the obligation to maintain the units. Information on the change was included in bills recently mailed to customers.
AWHR, with its principal operations in Columbus, is owned in part by a private investment company in St. Louis, Mo., whose interests include financing furnaces, air conditioners and heat pumps for residential customers.
American Electric Power owns and operates more than 42,000 megawatts of generating capacity in the United States and select international markets and is the largest electricity generator in the U.S. AEP is also one of the largest electric utilities in the United States, with almost 5 million customers linked to AEP’s 11-state electricity transmission and distribution grid. The company is based in Columbus, Ohio.
Media:Pat D. Hemlepp
Director, Corporate Media Relations
Analysts: Bette Jo Rozsa
Managing Director, Investor Relations