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AEP, Conoco form venture
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October 2, 1997: 10:18 a.m. ET
Companies to buy, lease, manage and finance corporate energy sources
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NEW YORK (CNNfn) - DuPont's Conoco subsidiary and American Electric Power Co. said Thursday they are forming two companies to provide businesses with a variety of energy management services.
The first company, AEP Conoco Energy Capital, will acquire and lease power-producing assets at industries and the sites of large commercial customers. It also will provide financing for new energy projects.
The second company, AEP Conoco Energy Management Services, will specialize in energy utilization and reduction assistance, energy and fuel procurement, project management and technical support.
"These ventures can significantly reduce energy costs for industrial or commercial customers today and position these customers to gain maximum benefit from electronic deregulation in the future," said E. Linn Draper Jr., AEP's chairman, president and chief executive officer.
AEP and DuPont each will initially invest approximately $125 million in equity and finance any additional funds needed.
The companies said the market potential for the venture is estimated at $100 billion.
The venture initially expects to sign up 16 DuPont facilities throughout the country and add approximately 17 more in the coming years. The majority of DuPont's 80 domestic sites also will be customers of the venture.
The energy assets of the initial participants are valued at $500 million. That amount is expected to grow to more than $1 billion in the near term.
Customers will be able to sell and lease back their existing energy assets, freeing up capital for core business activities.
--Cyrus Afzali
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