AEP sells cogeneration plant

has reached an agreement to sell its Plaquemine Cogeneration Facility in Plaquemine, Louisiana, to

.

Under terms of the agreement, Dow will pay AEP $64m at closing. The sale agreement allows AEP to participate in gross-margin sharing on the Plaquemine facility for five years. Dow will also reduce AEP’s existing below-current-market long-term power supply contract with Dow in Texas by 50 megawatts.

AEP retains the rights to any judgment paid by Tractebel Energy Marketing - now known as Suez Energy Marketing N.A. Inc - for breaching a long-term contract to purchase power generated by the Plaquemine plant. AEP received a judgment of $123m plus interest in August 2005. That judgment is under appeal.

The sale, which must be approved by the Federal Energy Regulatory Commission and must receive antitrust clearance from the Federal Trade Commission or the Department of Justice under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, is expected to close in December 2006. Proceeds from the transaction will be used to reduce debt.