American Electric Power has revealed it’s been issued two subpoenas from the Securities and Exchange Commission (SEC) as part of an investigation into the company’s involvement in Ohio legislation that eventually led to a politician’s bribery conviction.
In its regular quarterly 10-Q disclosure filing to the SEC on Nov. 2, AEP said it had received subpoenas from the commission in 2021 and 2022. The first subpoena requested documents related to the passing of Ohio House Bill 6 and to the company’s policies and financial processes. The second sought additional documents related to the investigation.
AEP said it is “cooperating fully” with the SEC’s investigation and is discussing resolving the inquiry with the commission and “potential claims under the securities law.”
“The outcome … cannot be predicted and could subject AEP to civil penalties and other remedial measures,” AEP said in the filing. “Management is unable to determine a range of potential losses that is reasonably possible of occurring, but management does not believe the results of this investigation or a possible resolution thereof will have a material impact on results of operations, cash flows or financial condition.”
The Columbus, Ohio-based company said it “does not believe that AEP was involved in any wrongful conduct in connection with the passage of HB 6.”
The legislation provided $1 billion in subsidies to a pair of coal plants in which AEP has a 43% stake and two nuclear plants. AEP lobbied for the bill’s passage, which resulted in the federal indictment of Ohio House Speaker Larry Householder for his role in taking bribes from another in-state utility, FirstEnergy, to pass the legislation. Householder was convicted and imprisoned earlier this year. (See Former Ohio House Speaker Householder Sentenced to 20 Years in Prison.)
AEP executives did not address the 10-Q filing during its quarterly earnings conference call with financial analysts, who did not ask any questions about it.
The disclosure took a little shine off AEP’s reported quarterly earnings of $954 million ($1.83/share). That was an improvement from the same period in 2022, when earnings were $684 million ($1.33/share).
AEP CEO Julie Sloat said the company continues to de-risk and simplify its business. She pointed to the completed sale of its 1,365-MW unregulated renewables portfolio that netted about $1.2 billion, and the sales processes for the company’s retail and distributed resources businesses that remain on track.
AEP continues its strategic review of the Transource Energy joint venture with Evergy. Sloat said the review is expected to be completed before the year is up.
Sloat said the company’s commercial load growth was up 7.5% year over year, attributing the vast majority of the increase to data centers in Ohio and Texas.
AEP’s share price closed Friday at $79.72, a gain of $3.24 (4.2%) over the last two days of the week.
OGE Earnings Down
OGE Energy, parent company of Oklahoma Gas & Electric, also reported third-quarter results Thursday, delivering earnings of $241.9 million ($1.20/diluted share). That compared unfavorably with the same period a year ago, when earnings were $262.8 million ($1.31/diluted share).
Although earnings were down year over year from 2022, OGE CEO Sean Trauschke told financial analysts the “solid” performance was due to operational excellence. OG&E sent a new hourly peak on Aug. 21 during the height of the summer’s heat, and did so without calling for public conservation, he said.
“Our system was designed, built and operated for conditions like we saw this summer, and I’m proud of our team for always meeting our customers’ need for reliable and safe electricity, and always keeping affordability top of mind,” Trauschke said.
The company’s share price gained 75 cents after earnings were posted, closing Friday at $35.25.
