The Public Service Commission of West Virginia, the state’s energy regulator, has delayed a securitization proposed by American Electric Power (AEP) by two months.
A source familiar with the situation said that the PSC has put an order to delay the proceeding as they look for an advisor to assist them.
The deal, which is being led by Morgan Stanley, would securitize the cost of power purchase agreements (PPAs) and the proceeds would be used to accelerate reimbursements of this cost. PPAs are contracts between electricity producers in which one party sells energy and/or generating capacity to another party, which generally serves end-use retail customers. Instead of building a new power plant, for example, an electric company can opt for a power purchase agreement.
On Aug. 22, AEP filed to securitize the uncollected balance of these costs. The requested securitization amount is up to $422 million. AEP anticipated that the deal would be approved by the W.Va regulator by Dec. 2012, with issuance of bonds scheduled for sometime in 1Q13.