AEP Considers Selling Barge Business

The State Journal
23 March 2015
By Jim Ross

American Electric Power is looking at options for its river transportation business.

In a statement released March 23, the company said it had hired Morgan Stanley & Co. "to explore strategic alternatives for its competitive barge transportation subsidiary, AEP River Operations LLC."

AEP River Operations is one of the largest U.S. inland marine transportation companies providing transportation services for bulk commodities, coal and liquids.

In the Ohio Valley, AEP River Operations is best known for supplying coal and limestone to its power plants along the Ohio River. AEP boats drop barges at Point Pleasant, where other boats take them to the John Amos Power Plant on the Kanawha River between Winfield and St. Albans.

AEP River Operations has a dock at the Mason County, WV community of Lakin.

AEP has been in the river transportation business since the early 1970s, when it bought West Virginia-based O.F. Shearer &Sons. For the next three decades, the river transportation business mainly delivered coal to AEP power plants. About 15 years ago, AEP expanded its river operations with the purchase of MEMCO, a commercial barge operation based in St. Louis. That enabled AEP to enter the contract hauling business for dry goods on the Mississippi River system. AEP recently added a fleet of tank barges so it could haul liquids, also.

In the past seven years, AEP has added 10 new towboats of about 6,000 horsepower each to its fleet servicing the Ohio River. Each boat cost about $13 million. Those boats have been frequent visitors to and hosted open houses at the Point Pleasant river festival each Labor Day.

In its statement released this week, AEP said, "AEP is committed to completing its review of potential alternatives for River Operations as promptly as practicable. There are no assurances that any particular alternative will be pursued or that any transaction will occur, or on what terms. The company does not plan to release additional information about the status of the review of alternatives until a definitive agreement is entered into or the process is otherwise completed."