AEP Seeking Grants To Assist With Advanced Nuclear Site Exploration in Indiana and Virginia

Rhea-AI Summary

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.

Positive

• Potential access to $85 million in federal grants for SMR development
• Strong local government and community support for both projects
• Partnership with established players TVA and GE Hitachi
• Flexibility to scale SMR sites based on energy needs

Negative

• Commercial implementation at least 10 years away
• Significant regulatory and permitting processes ahead
• Additional funding requirements beyond grant amounts not specified

Insights

Energy Infrastructure Analyst

AEP's strategic move into Small Modular Reactors represents a pivotal shift in utility-scale nuclear deployment. The $50 million and $35 million grant applications for Indiana and Virginia sites respectively signal serious intent to diversify their generation portfolio. The BWRX-300 technology selection for Indiana, capable of 300 MW output, is particularly noteworthy as it's among the most commercially advanced SMR designs.

The partnership with TVA and GE Hitachi adds significant credibility to the Indiana project. The timing aligns with the broader nuclear renaissance, as utilities seek reliable baseload carbon-free generation. The decade-long timeline to commercial operation is realistic given regulatory requirements, suggesting careful project planning rather than rushed deployment.

The existing nuclear operations experience at Cook Nuclear Plant provides valuable operational expertise for SMR implementation. The concurrent pursuit of Cook Plant license extensions through 2054/2057 demonstrates long-term nuclear commitment and operational confidence.

Financial Analyst

The USDOE's $900 million grant program significantly de-risks AEP's SMR investment strategy. By pursuing federal funding, AEP is effectively leveraging public capital to explore next-generation nuclear technology while protecting shareholder interests. The dual-site strategy in different regulatory jurisdictions provides optionality and reduces single-project risk.

The positive local government support, particularly in Spencer County, suggests smoother regulatory pathways and potential tax incentives. Virginia's regulatory framework (Code § 56-585.1:15) supporting SMR development cost recovery provides important financial protection. This regulatory certainty enhances project viability and protects shareholder returns.

For retail investors: Think of this as AEP making a calculated bet on future energy needs with strong government backing and minimal near-term financial exposure. The decade-long timeline means minimal immediate impact on financials, but positions AEP well for future growth in a carbon-constrained environment.

• Indiana Michigan Power Rockport Plant site identified as potential location for a Small Modular Reactor
• Following positive community discussions, Appalachian Power submits grant application to support permitting process at Joshua Falls site

COLUMBUS, Ohio, Jan. 17, 2025 /PRNewswire/ -- American Electric Power (Nasdaq: AEP) is seeking grants from the U.S. Department of Energy (USDOE) to support the Early Site Permit (ESP) process for two potential Small Modular Reactor (SMR) sites. Through its Indiana Michigan Power (I&M) operating company, AEP is announcing that property at the Rockport Plant in Spencer County, Indiana, has been identified as a potential SMR site. Previously AEP, through its Appalachian Power operating company, had announced it was beginning the ESP process for company-owned Joshua Falls property in Campbell County, Virginia.

Through a grant funding partnership with the Tennessee Valley Authority (TVA) and GE Hitachi Nuclear Energy (GEH), I&M is seeking $50 million to begin the early stages of SMR development at the Rockport Plant site. If awarded funds, I&M will conduct ESP activities, as well as a Preliminary Safety Analysis Report, which is required for a potential future Construction Permit, at the site utilizing the GEH BWRX-300 technology. This includes gathering public input from community members, collecting detailed site information, and deployment planning for the use of a GEH BWRX-300 at the site. This SMR unit is capable of generating 300 megawatts (MW) of electricity.

"AEP is proud to be an industry leader in bringing the next generation of nuclear power to our customers," said Bill Fehrman, AEP president and chief executive officer. "The demand for power is growing at a pace not seen in decades. Not only is AEP working to bring solutions tailored to the current power needs of our states, such as new natural gas and fuel cells, we are also excited about the potential that SMRs have to meet the growing needs of the future."

SMRs offer tremendous potential to provide safe, reliable and clean energy 24 hours a day, 365 days a year. The relatively small footprint allows SMRs to be constructed in areas that were not previously feasible for nuclear energy generation. SMR sites can also be scaled to match the energy needs of the state. A single SMR unit can generate up to 500 MW of clean energy, depending on the design of the unit.

Both grant applications were submitted under the USDOE's Generation III+ Small Modular Reactor Program. The program is offering up to $900 million in grants.

I&M has applied as a subrecipient under TVA's application, with GEH as the reactor technology provider. I&M will host a public open house mid-year. Local and state officials have expressed their support for the project. Last year, Spencer County officials approved an ordinance supporting new generation at the Rockport Plant site, including the use of SMRs.

"We are excited that Indiana Michigan Power is exploring SMR technology and is looking at its Rockport generation site in Spencer County as its home," said Indiana State Representative Steve Bartels and Indiana State Senator Daryl Schmitt in a joint statement. "An SMR here would mean hundreds of great jobs for the area, provide local fiscal support to enhance the quality of life, local services, and create educational opportunities for our young people to help them build a career in energy production."

Additionally, in November 2024, the Indiana Office of Energy Development issued a siting report performed by Purdue University which identifies Rockport as a suitable site.

"The flexibility of our generation portfolio has allowed us to provide reliable, affordable power to our customers," said Steve Baker, I&M president and chief operating officer. "Our fleet includes reliable baseload generation from coal and the Cook Nuclear Plant, as well as renewable energy from wind and solar. We're excited that the next generation of nuclear technology could be a part of I&M's future."

I&M has safely operated Cook Nuclear Plant in Bridgman, Michigan since 1975. The facility has reliably powered I&M customers since then and the company is seeking to extend the operating license for Cook Plant through 2054 for unit 1 and 2057 for unit 2. Additionally, the company is looking at how to best meet the near-term energy needs of customers.

Appalachian Power has applied under a separate grant category. No technology provider has been identified at this time. Appalachian Power continues to evaluate technology providers to determine what is commercially viable at the site and aligns with Virginia's energy needs.

In November 2024, Appalachian Power announced that it was beginning exploration to see if the Joshua Falls site was suitable for an SMR. Today, Appalachian Power submitted a grant proposal requesting $35 million to offset the costs of the work necessary for the ESP.

In Virginia, Appalachian Power held a public meeting in December 2024, attended by more than 100 individuals interested in learning more about the project. Appalachian Power is continuing to keep the community informed as the project progresses. The company will submit an application to the Virginia State Corporation Commission this spring requesting approval pursuant to Virginia Code § 56-585.1:15, which supports the recovery of SMR development costs.

"Appalachian Power has heard tremendous support for our SMR proposal, and we're listening to, and working with, those who have concerns," said Aaron Walker, Appalachian Power president and chief operating officer. "We are at the beginning of a long and exciting journey. Our state and local leaders understand how SMRs can benefit our customers, and we are grateful for their support."

AEP's commercial use of an SMR is estimated to be at least a decade away. Permitting and regulatory processes are in place to ensure safety and reliability of the facilities. SMRs are a promising future energy resource, but I&M and Appalachian Power are working with state regulators, stakeholders, and leaders to meet quickly-growing energy needs and energy policy goals. Several other SMR projects in the US and Canada are currently engaged in the regulatory process.

Customers can learn more about the Appalachian Power's SMR at: appalachianpower.com/smr

More information about SMRs is available at indianamichiganpower.com/smr, and details about the proposal for Rockport will be added soon.

About AEP
Our team at American Electric Power (Nasdaq: AEP) is committed to improving our customers' lives with reliable, affordable power. We are investing $54 billion from 2025 through 2029 to enhance service for customers and support the growing energy needs of our communities. Our nearly 16,000 employees operate and maintain the nation's largest electric transmission system with 40,000 line miles, along with more than 225,000 miles of distribution lines to deliver energy to 5.6 million customers in 11 states. AEP also is one of the nation's largest electricity producers with approximately 29,000 megawatts of diverse generating capacity. We are focused on safety and operational excellence, creating value for our stakeholders and bringing opportunity to our service territory through economic development and community engagement. Our family of companies includes AEP Ohio, AEP Texas, Appalachian Power (in Virginia, West Virginia and Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana, east Texas and the Texas Panhandle). AEP also owns AEP Energy, which provides innovative competitive energy solutions nationwide. AEP is headquartered in Columbus, Ohio. For more information, visit aep.com.

 

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SOURCE American Electric Power

FAQ

How much grant funding is AEP seeking for its SMR projects?

AEP is seeking $50 million for the Rockport Plant site in Indiana and $35 million for the Joshua Falls site in Virginia, totaling $85 million in grant funding.

What is the power generation capacity of AEP's planned SMR at Rockport?

The planned GEH BWRX-300 SMR unit at Rockport will be capable of generating 300 megawatts (MW) of electricity.

When does AEP expect its SMR projects to be commercially operational?

AEP estimates that commercial use of SMRs is at least a decade away due to permitting and regulatory processes.

Who are AEP's partners in the Rockport SMR project?

AEP is partnering with Tennessee Valley Authority (TVA) and GE Hitachi Nuclear Energy (GEH) for the Rockport SMR project.

What was the community response to AEP's Joshua Falls SMR project in Virginia?

The December 2024 public meeting for the Joshua Falls SMR project attracted over 100 interested individuals, with Appalachian Power reporting tremendous support for the proposal.