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American Electric Power Company, Inc. (AEP), headquartered in Columbus, Ohio, stands as one of the largest electric utilities in the United States. Delivering electricity to more than 5 million customers across 11 states, AEP is integral to the nation's power infrastructure. The company owns nearly 38,000 megawatts of generating capacity and the largest electricity transmission system in the U.S., boasting a 39,000-mile network. AEP’s operations span various subsidiaries including AEP Ohio, AEP Texas, Appalachian Power, Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company.
In terms of energy generation, about 42% of AEP's capacity is derived from coal, 27% from natural gas, 21% from renewable sources and hydro, 8% from nuclear, and 2% from demand response. The company is actively enhancing its generation portfolio by focusing on renewable energy to meet growing customer demands sustainably. AEP is also committed to reducing its carbon footprint, targeting an 80% reduction in CO2 emissions from 2005 levels by 2030, and achieving net zero by 2045.
AEP is investing $43 billion over the next five years to modernize the grid and ensure reliable, affordable power. Their strategic initiatives include de-risking the business, controlling costs, and fostering economic growth through energy infrastructure investments.
American Electric Power's financial performance has been robust despite economic challenges. The company reaffirmed its 2024 operating earnings guidance range of $5.53 to $5.73 per share, reflecting a solid long-term growth rate of 6% to 7%, and a targeted FFO/Debt ratio of 14% to 15%.
Recently, AEP has engaged in significant business transactions, including the sale of its distributed resources business, AEP OnSite Partners, and the completion of its sale of New Mexico Renewable Development assets, netting considerable capital to support its strategic goals. Furthermore, AEP’s emphasis on sustainability and community engagement continues to earn the company recognition and strengthen its market position.
American Electric Power (AEP) and its affiliate Transource Energy have been selected to invest approximately $1.7 billion in transmission system upgrades across the PJM region. The projects, approved by the PJM Board, will enhance reliability and power availability in Indiana, Maryland, Ohio, Virginia, and West Virginia.
Of the total investment, about $1.1 billion will be executed through Transource Energy's joint venture with Dominion Energy and FirstEnergy Transmission, called Valley Link Transmission Company. This includes two 765 kilovolt transmission lines across West Virginia, Virginia, and Maryland. The remaining $600 million will be allocated to AEP's Transmission Companies and operating companies in Indiana, Ohio, and Virginia.
The projects, selected through the Regional Transmission Expansion Plan (RTEP) process, are scheduled to be in service by 2029. They range from constructing new lines and stations to upgrading existing power lines and replacing substation equipment.
PJM Interconnection has selected multiple electric transmission projects to be jointly developed by Dominion Energy (D), American Electric Power, and FirstEnergy through their newly formed Valley Link Transmission Company joint venture. The projects will span across Virginia, West Virginia, and Maryland.
The key developments include:
- A 260-mile 765-kilovolt transmission line with two substations between Putnam County, WV and Frederick County, MD
- A 155-mile 765-kV transmission line with a substation between Campbell County, VA and Fauquier County, VA
- A new substation in Caroline County, VA
These infrastructure investments aim to address the region's growing power demands, enhance grid reliability, and support economic development. The projects are in early development stages, with detailed plans for permitting, regulatory approvals, and public participation expected in the coming months.
PJM Interconnection has selected multiple electric transmission projects to be jointly developed by FirstEnergy Transmission, Dominion Energy, and American Electric Power through its Transource Energy affiliate. The companies will collaborate through the newly formed Valley Link Transmission Company joint venture.
The selected projects include:
- A 260-mile 765-kilovolt transmission line and two substations between Putnam County, WV, and Frederick County, MD
- A 155-mile 765-kV transmission line and substation between Campbell County, VA, and Fauquier County, VA
- A new substation in Caroline County, VA
The projects, proposed through PJM's Regional Transmission Expansion Plan Open Window process in September 2024, aim to address reliability needs, support economic development, and meet growing power demands across Virginia, West Virginia, and Maryland. The development is in early stages, with detailed plans for permitting, regulatory approvals, and public participation expected in the coming months.
Indiana Michigan Power (I&M), an American Electric Power (AEP) company, has received approval from the Indiana Utility Regulatory Commission (IURC) for its large load tariff settlement. The settlement, jointly filed with major tech companies and consumer advocacy groups, establishes new requirements for large energy consumers, particularly data centers.
The approved order requires new large load customers to make long-term financial commitments proportional to their size, ensuring costs are recovered from these customers rather than existing ones. A key modification requires IURC review for any reduction exceeding 20% of a large load customer's contracted peak capacity.
The settlement comes amid significant economic developments, including AWS's $11 billion data center investment near New Carlisle and Google's $2 billion facility in Fort Wayne. I&M, serving over 600,000 customers, delivered more than 85% emission-free energy in 2023 through its diverse generation portfolio including nuclear, wind, hydro, and solar sources.
American Electric Power (AEP) reported strong financial results for 2024, with GAAP earnings of $5.60 per share and operating earnings of $5.62 per share, representing a 7% increase from 2023. The company's fourth-quarter 2024 GAAP earnings were $664 million ($1.25 per share), compared to $336 million ($0.64 per share) in Q4 2023.
Commercial load grew significantly by 10.6% in 2024, driven by economic development in Indiana, Ohio, and Texas. AEP anticipates 8-9% annual total retail load growth from 2025-2027 and expects to serve over 20 gigawatts of new load by decade's end.
The company reaffirmed its 2025 operating earnings guidance of $5.75 to $5.95 per share and is executing a five-year, $54 billion capital plan. Additionally, AEP is evaluating $10 billion of potential incremental investment across its service territory and regional transmission grids.
American Electric Power (AEP) has achieved recognition on the JUST 100 list for the fifth consecutive year, maintaining its position in the top 20 for the third year running and securing second place in the utilities industry. The JUST 100, compiled by JUST Capital in partnership with CNBC, evaluates America's largest publicly traded companies based on their commitment to stakeholder priorities.
The assessment covered 940 companies, examining their performance in areas such as employee investment and community support. AEP's President and CEO Bill Fehrman emphasized the company's dedication to empowering team members and positively impacting local communities, while focusing on providing reliable and affordable energy services.
American Electric Power (AEP) has announced its Board of Directors has declared a quarterly cash dividend of $0.93 per share on the company's common stock. The dividend will be paid on March 10, 2025, to shareholders of record as of February 10, 2025.
This marks AEP's 459th consecutive quarterly dividend, maintaining an unbroken streak of quarterly dividend payments that began in July 1910, demonstrating over a century of consistent shareholder returns.
American Electric Power (AEP) is pursuing grants from the U.S. Department of Energy for Small Modular Reactor (SMR) development at two sites. Through Indiana Michigan Power, AEP is seeking $50 million in partnership with TVA and GE Hitachi for the Rockport Plant site in Indiana, utilizing GEH BWRX-300 technology capable of generating 300MW. Additionally, through Appalachian Power, AEP has applied for a $35 million grant for the Joshua Falls site in Virginia.
The projects are part of the USDOE's Generation III+ Small Modular Reactor Program, offering up to $900 million in grants. Both sites have received local support, with Spencer County officials approving an ordinance for new generation at Rockport. The Virginia project saw over 100 attendees at a public meeting in December 2024.
AEP estimates commercial SMR use is at least a decade away. The company emphasizes SMRs' potential to provide reliable, clean energy 24/7, with units capable of generating up to 500MW depending on design.
American Electric Power (AEP) has announced a strategic partnership where KKR and PSP Investments will acquire a 19.9% equity interest in AEP's Ohio and Indiana & Michigan Transmission Companies for $2.82 billion. The transaction, valued at 30.3 times LTM P/E, represents approximately 5% of AEP's total transmission rate base.
The proceeds will support AEP's five-year, $54 billion capital growth plan and offset a significant portion of the company's $5.35 billion equity financing needs through 2029. The deal is expected to be immediately accretive to AEP's earnings and credit profile upon closing, which is anticipated in the second half of 2025.
The transaction requires FERC approval and CFIUS clearance. Customers and employees will not experience changes, and AEP will maintain controlling interest in the transmission assets while continuing to operate and maintain the Transcos' infrastructure.
American Electric Power (AEP) has appointed Trevor I. Mihalik as executive vice president and chief financial officer, effective January 20, 2024. Mihalik, who brings over 34 years of energy industry experience, will succeed Chuck Zebula, who will serve as senior advisor to the CEO before retiring in March.
Mihalik joins AEP from Sempra, where he most recently served as group president overseeing San Diego Gas and Electric and Southern California Gas Company subsidiaries. His responsibilities at AEP will include accounting and tax, treasury and risk, corporate planning and budgeting, investor relations, procurement, supply chain, strategy, and corporate regulatory functions.
The appointment comes as AEP focuses on improving operating performance and executing its multibillion-dollar capital plan to meet increasing energy demand. Mihalik's experience includes leadership roles at Iberdrola Renewables Holdings, Chevron Natural Gas, and Bridgeline Holdings.
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