American Electric Power is looking at possible partners for a merger, according to reports that the company is declining to confirm.
The Columbus-based utility is in preliminary talks with Entergy Corp., a New Orleans-based utility, according to unnamed sources who spoke with The Energy Daily, a trade publication, in a story published yesterday. The sources said a deal is not imminent.
In a separate report, dealReporter, a division of The Financial Times, said on Thursday that AEP is working with the investment bank Lazard to find a merger partner. The talks, which have grown more intense in recent months, have included Entergy, the story said.
AEP, Entergy and Lazard declined The Dispatch's request to comment.
The reports arrive at a time of consolidation among electric utilities. Exelon Corp. of Illinois is seeking approval to acquire Constellation Energy of Maryland. Duke Energy, which serves parts of Ohio, has announced plans to merge with Progress Energy; both companies are based in North Carolina. An Ohio-based company, Dayton Power & Light, has announced its intentions to merge with AES Corp. of Arlington, Va.
Columbus-based AEP is one of the largest electricity utilities in the country, with 5 million customers in 11 states. Entergy has 2.7million customers in four states, and it is the nation's second-largest generator of nuclear power. The two companies each have service territories in Texas, Louisiana and Arkansas, which could lead to economies of scale if they were to merge.
If AEP is talking to Entergy, it probably sees a merger as an opportunity to reduce its reliance on coal-fired power plants, said Kenneth B. Medlock III, an energy economist at Rice University in Houston.