American Electric Power told analysts during its quarterly earnings call that load growth, driven by commercial customers in its service territory, presents opportunities to invest in “critically needed” infrastructure.
CEO Bill Fehrman said during the May 6 call that commercial load increased 12.3% in the first quarter compared with the same period a year ago. The company has forecast “historic” total retail load growth of 8 to 9% over the next three years, driven by large-load demand in Indiana, Ohio, Oklahoma and Texas.
“This growth is not a show-me story. It is happening,” he said. “As we look ahead, AEP is extremely well-positioned to participate in future growth across our footprint … to support increasing electric demand.”
AEP’s capital plan includes customer commitments for over 20 GW of incremental load by 2030 because of data center demand, reshoring, manufacturing and continued economic development. Fehrman said the company’s investment in its 40,000-mile transmission system, which includes the nation’s largest network of 765- and 345-kV lines, has been a driver behind the growth.
“These ultra high-voltage lines position us exceedingly well in attracting hyperscalers [large data centers] to our system. We need consistent, large-load power,” he said. “New infrastructure will allow us to handle this increased demand.”
AEP said it has secured funding this year through two separate transactions that complete its expected equity needs for its five-year, $54 billion capital growth plan. The company said it could invest an additional $10 billion over the next five years.
This year alone, PJM selected AEP’s Transource Energy joint venture and other collaborating regional utilities to complete $1.7 billion in transmission projects. In Texas, the Public Utility Commission approved AEP Texas to build one of the state’s first 765-kV projects in the state. (See PJM Board Approves $6B in Grid Upgrades and Texas PUC Approves 765-kV Transmission Option for Permian Basin.)
Fehrman said the company has determined the capital plan has about 0.3% direct tariff exposure.
The Columbus, Ohio-based company reported first-quarter earnings of $800 million ($1.50/share), compared with just over $1 billion ($1.91/share) from the same period in 2024. It also reaffirmed its operating earnings guidance of $5.75-$5.95/share and maintained its long-term growth rate target of 6 to 8%.
AEP’s share price closed May 7 at $107.48, up four cents since the earnings release.
