COLUMBUS, Ohio, April 30, 2001 -
CONSOL Energy Inc. (NYSE:CNX) and American Electric Power (AEP) have entered into a memorandum of understanding regarding the proposed sale of AEP´s affiliate mines in Ohio and West Virginia to CONSOL Energy.
Under the proposed agreement, CONSOL Energy would purchase the stock of Windsor Coal Company in West Liberty, W.Va., Southern Ohio Coal Company in Wilkesville, Ohio, and Central Ohio Coal Company in Cumberland, Ohio.
In addition, AEP would enter into coal supply agreements with CONSOL Energy to purchase approximately 34 million tons of coal from these and other CONSOL Energy affiliate mines through 2008. The coal would be utilized at various AEP coal-fired power plants, including the Muskingum River, Cardinal and Gen. James. M. Gavin plants.
Federal Worker Adjustment and Retraining Notification Act, or WARN, notices will be given to employees at the three mines. The notices alert them to the potential sale and indicate that their employment with AEP would end on or about June 30, 2001, when it is anticipated that the agreement with CONSOL would be closed.
Employees have been aware of the possible sale since last August when the company announced plans to pursue a sale and retained the investment banking firm Rothschild Inc. to market the properties.
As part of the proposed agreement, AEP would retain ownership of, and continue to manage, the area of reclaimed coal lands known as ReCreation Land.
Definitive agreements must be negotiated by the parties and must be approved by the Boards of Directors of both companies following due diligence.
- Southern Ohio Coal Company is located near Wilkesville, Ohio, about 25 miles southwest of Athens. Southern Ohio Coal consists of two underground coal mines - Meigs No. 2 and Meigs No. 31 - a coal preparation plant and a general office. The company employs 680 workers.
- Windsor Coal Company is located at West Liberty, W.Va., about 10 miles north of Wheeling. Currently not in operation, Windsor produced coal for use at AEP´s Cardinal generating station and for sale to customers outside the AEP System, and had a staff of 225 employees.
- Central Ohio Coal Company is located near Cumberland, Ohio, about 30 miles southeast of Zanesville. Currently not in operation, the mine produced coal for AEP´s Muskingum River Plant at Beverly, Ohio, and had 147 employees.
- ReCreation Land consists of some 35,000 acres near Zanesville that was surface-mined and reclaimed by Central Ohio Coal Company. AEP has made the area available for public use since 1961 through cooperative agreements with the Ohio Department of Natural Resources.
American Electric Power is a multinational energy company based in Columbus, Ohio. AEP owns and operates more than 38,000 megawatts of generating capacity, making it one of America’s largest generators of electricity. The company is also a leading wholesale energy marketer and trader, ranking second in the U.S. in electricity volume. AEP provides retail electricity to more than 7 million customers worldwide and has more than $45 billion in assets, primarily in the U.S. with holdings in select international markets. Wholly owned subsidiaries are involved in power engineering and construction services, energy management and telecommunications.
The comments set forth above include forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, including (1) statements concerning the Company’s plans, objectives, expected performance and expenditures and (2) other statements that are other than statements of historical fact. These forward-looking statements reflect assumptions, and involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially from forward-looking statements are electric load and customer growth, abnormal weather conditions, availability of generating capacity, the ability to recover net regulatory assets and other stranded costs in connection with deregulation of generation, the outcome of environmental regulation and litigation, the impact of fluctuation in commodity prices and interest rates, and other risks and unforeseen events over which the Company has no control. The reader is also directed to the Company’s periodic filings with the Securities and Exchange Commission for additional factors that may impact the Company’s results of operations and financial condition. Furthermore, historical results may not be indicative of the Company’s future performance.