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American Electric Power Co. said its Appalachian Power unit agreed to buy a West Virginia generating plant from Reliant Energy Inc. for $100 million to help meet demand for electricity.
The natural-gas-fired plant is designed to run during hours of highest demand, Columbus, Ohio-based American Electric and Houston-based Reliant said in separate statements. It's the second purchase of a gas-fired plant announced in four months by American Electric, the largest operator of coal-fired generating plants in the U.S.
Reliant got ``fair value'' for its Ceredo plant near Huntington, West Virginia, the company's chief executive, Joel Staff, said in the statement. The companies said they expect to complete the sale by early 2006, subject to regulatory approval.
Ceredo, which can generate 505 megawatts, enough power for 404,000 average U.S. homes, is Reliant's only plant in West Virginia. American Electric agreed in May to buy Waterford, a gas-fired plant in Ohio, from Public Service Enterprise Group Inc. for $220 million.
Shares of American Electric rose 17 cents to $37.72 in New York Stock Exchange composite trading. Reliant fell 8 cents to $12.62.
American Electric sells power to 3.3 million homes and businesses in seven eastern states. It also owns utilities in Louisiana, Arkansas and Oklahoma and distributes power in Texas.
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