American Electric Power was expected to close a $2.6 billion dollar deal in January to sell Kentucky Power to Liberty Utilities, but the Federal Energy Regulatory Commission denied the transaction Thursday.
Regulators said the companies failed to provide complete information to evaluate the effect on customer rates, and proposed insufficient protections for ratepayers.
“We deny, without prejudice, authorization for the Proposed Transaction because Applicants have failed to demonstrate that the Proposed Transaction will not have an adverse effect on rates,” commissioners wrote Thursday.
They also noted contradictions in the application: The companies said there would be no rate impacts while acknowledging potential changes to Kentucky Power’s cost of debt that would impact rates.
Commissioner Willie L. Phillips noted it’s only the fifth out of nearly 2,000 applications to be denied in the last 10 years.
A second commissioner said the commission failed to act responsible by relaying the decision almost a year late.
“Such an order might have been acceptable had the Commission issued it six months ago,” commissioner James P. Danly said.
A spokesperson for American Electric Power said they are disappointed in the commission.
“We are thoroughly reviewing the order and are working with Liberty to determine the best path forward to securing FERC’s approval of the transaction,” Tammy Ridout, managing director of external communications, said.
FERC denied the transaction without prejudice, meaning the companies could re-apply to get the deal done.
