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Business briefs: AEP to re-evaluate proposed merger

American Electric Power announced Thursday it plans to re-evaluate the proposed merger of its Wheeling and Appalachian Power subsidiaries, a day after Virginia regulators denied a company request to transfer some of its power plant assets to Appalachian Power.

On Wednesday, utility regulators with the Virginia State Corporation Commission approved Appalachian's proposed purchase of a portion of the John Amos power plant in Poca from Ohio Power, but denied Appalachian's request to purchase 50 percent of the Mitchell power plant in Moundsville from AEP's Ohio subsidiary.

"We are pleased that the Virginia Commission approved transfer of the AEP Ohio-owned portion of Amos Plant to Appalachian Power, but the decision to deny the transfer of half of the Mitchell Plant's generating capacity is disappointing," AEP President Nicholas Akins said in a statement.

Although Virginia regulators also approved a proposed merger between Wheeling and Appalachian Power, Akins said the denial of the Mitchell purchase was a "complicating factor."

Appalachian Power intended to purchase the plant to offset the loss of power generating capacity that will occur when several of its coal-fired plants go offline in 2015. The company already has to buy a significant portion of its power from other companies, which officials say leads to higher costs.

But opponents have said the plan amounted to AEP simply dumping its more-costly coal-fired plants on Appalachian customers, to reduce costs in the Ohio Power network. Virginia regulators said the transfer presented too much risk for customers, as Appalachian has had no prior experience running the Moundsville plant.

Akins said without the Mitchell plant, the combined Appalachian-Wheeling power company would not have enough generating resources to serve the merged company. He said leaving the two companies as they are could be a better deal for customers.

"If the Wheeling Power and Appalachian Power merger does not proceed, our corporate separation order from the Federal Energy Regulatory Commission would allow the transfer of Wheeling Power's existing power purchase agreement with AEP Ohio to AEP Generation Resources to serve those customers at cost-based rates," Akins said.

"This would protect Wheeling Power customers by continuing their existing source of generation supply."

Akins said the company would continue to work with regulators across its network to find the best solution in the matter.

Frontier extends current contracts

Frontier Communications and the Communications Workers of America have agreed to extend the company's current labor contract, which was set to expire Friday, in order to continue labor negotiations.

The current contract, which covers Frontier's 1,600 West Virginia union workers, was set to expire Aug. 2 at midnight.

The CWA and company representatives have been negotiating a month on a new contract, but have yet to reach an agreement. Neither side believed they would be able to complete talks before the contract expires Friday night, according to a press release from the union.

On Thursday, the union agreed to a request from Frontier representatives to extend the current contract to Oct. 12.

This is the first contract Frontier has negotiated with its union workforce, which it inherited when it acquired Verizon's West Virginia landline operations in 2010.

Union workers have said they want the company to continue providing benefits at current levels, as well as continue to improve customer service and infrastructure investments in the state.

Lottery postpones upgrade deadline

The state Lottery announced Thursday it is extending the deadline for upgrading the central computer system that controls state video lottery machines until 2018.

The contract for the Lottery's current AEGIS computer system, provided by Scientific Games International, was set to expire in January 2016.

The system controls and regulates about 16,000 casino and tavern video lottery machines across the state. Retailers and machine owners had expressed concerns that upgrading to a new software system could prove too costly for their businesses.

After conducting talks with retailers and officials at Scientific Games, Lottery Director John Musgrave announced Thursday the contract for the current system had been extended through Jan. 31, 2018.

"This agreement will maximize the lifespan of our system and ultimately save both the state and limited video lottery operators and retailers from the very costly process of making a system change at an earlier date," Musgrave said.

The current system has been in place since 2006.


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