This week, the sale of the Gen. James M. Gavin Plant in Cheshire, along with three other electric-generating facilities in Ohio and Indiana, were finalized.
CHESHIRE, Ohio — This week, the sale of the Gen. James M. Gavin Plant in Cheshire, along with three other electric-generating facilities in Ohio and Indiana, were finalized.
American Electric Power sold the four plants to Lightstone Generation LLC, a joint venture of Blackstone (NYSE: BX) and an affiliate of ArcLight Capital Partners LLC (ArcLight), for approximately $2.1 billion.
Not much is known about Lightstone Generation, but that is changing.
This week, letters were sent to both the Gallia and Meigs County Commissions, on behalf of Lightstone Generation, to touch base with the officials and schedule meetings between the Lightstone leadership team and commissioners.
The letters, sent by Steven Arabia, vice president, government affairs, for Lightstone Generation, also said: “Lightstone is a 50-50 joint venture formed by The Blackstone Group L.P. and ArcLight Capital Partners LLC. Together the Lightstone team has extensive experience owning and operating power generation facilities. We are committed to the safe and successful operation of the newly acquired power plants, and to good corporate citizenship.”
Arabia spoke to the Gallipolis Daily Tribune on Tuesday, saying around 400 employees total from the four power plants made the transition to Lightstone. He added, the goal of the upcoming introductory meetings with local officials was to begin to establish relationships.
“We are pleased to be the new owners and operators of Gavin and the other three plants that were part of the transaction,” Arabia said on behalf of Lightstone. “In the months since the transaction was announced, we have been communicating with employees at the plants and going over the typical transition issues. And we are excited to officially welcome them to the Lightstone team.”
Also on Tuesday, local officials chimed in on this new chapter in the tri-county region.
Harold Montgomery, Gallia County Board of Commissioners President, said: “Something of this magnitude in Gallia County is very concerning. Of all the jobs that it encompasses, plus the Gavin Plant being the largest property taxpayer in the county. Our understanding is that this is a continued operation retaining all the employees. We hope (the transfer) is all positive for the employees concerned. AEP has always been a good neighbor to Gallia County and we’re expecting the same from the new holders. We haven’t officially had any contact with them yet, but we’re looking forward to hopefully doing that in the near future and be able to sit down and have discussions with them. We’re very hopeful this works out for everyone.”
Melissa Clark, Gallia County Economic and Community Development Director said: “Gavin Power Plant is a major employer to our area and large contributor to our local economy. Gallia County has always maintained a strong relationship with AEP and we look forward to continuing that relationship with Lightstone Generation.”
Of course, the Gavin Power Plant, and its economic impact, is not limited to its home in Gallia County. Besides employing people from across the region, it contributes to the economic landscape in other ways.
“The Gavin plant has been an economic engine in this area for many years through their direct employment and their use of local suppliers and contractors,” Perry Varnadoe, Meigs County Economic Development Director said. “We look forward to this continuing with Lightstone Generation. They are reaching out to the community to build relationships and that is a positive step.”
In addition, this is an opportunity for Lightstone officials to show how they plan to participate in the communities on “both sides of the river.” AEP still makes its home in Mason County, W.Va. with the Mountaineer Plant in New Haven, W.Va. Mason County Economic Development Authority Director John Musgrave, said the Mountaineer, Gavin, Kyger Creek and John Amos plants all meet an important need in the area and country – energy. And, in an area where some infrastructure is lacking, the all-important power generation component is not. Musgrave added, for generations, this area has been one of the major places for power generation in the United States.
“The power plants are a tremendous asset for the whole region,” Musgrave said. “Energy is an extremely important part of that regional economy.”
Musgrave added, he hopes no jobs are lost as a result of the sale and that power generation continues.
According to a statement from AEP about the sale this week, the company will net approximately $1.2 billion in cash after taxes, repayment of debt associated with these assets and transaction fees.
AEP is investing the proceeds from the sale in its regulated businesses, including transmission and contracted renewable projects. AEP recorded an after-tax gain, subject to customary true-ups, of approximately $130 million from the sale. AEP announced Sept. 14, 2016, that it had reached an agreement to sell the plants to Lightstone Generation. The sale includes 5,200 megawatts of generation all located in the region served by the PJM Interconnection: Lawrenceburg Generating Station, 1,186 MW natural gas, Lawrenceburg, Indiana; Waterford Energy Center, 840 MW natural gas, Waterford, Ohio; Darby Generating Station, 507 MW natural gas, Mount Sterling, Ohio; Gen. James M. Gavin Plant, 2,665 MW coal, Cheshire, Ohio.
Dean Wright, Gallipolis Daily Tribune, contributed to this article. Find it at http://mydailytribune.com/top-stories/12712/sale-finalized-for-gavin-plant