American Electric Power told financial analysts during its fourth-quarter earnings conference call Feb. 13 that the company is evaluating $10 billion of potential incremental investment because of increasing interest from data centers and other large loads looking to build in its 11-state service territory.
“The tech companies are fast movers, and AEP will be there to support them with whatever technology solution they want to deploy, but we need to ensure that we are protected and compensated,” CEO Bill Fehrman told analysts.
The Columbus, Ohio-based company announced a record $54 billion capital plan in the fall that will last through 2029. Fehrman said AEP expects 20 GW of new load by the end of the decade, much of it in Ohio and Texas.
The utility added 450 MW in its home state in December. It expects an additional 4.7 GW of data center load to come online by year-end.
“We are investing in tailored solutions for new individual large loads to meet their requirements and timelines while mitigating rate impacts to existing customers,” Fehrman said.
AEP already has filed for approval of 2.3 GW of natural gas generation in its Public Service Co. of Oklahoma (PSO) and Southwestern Electric Power Co. service territories. It also has active requests for new generation proposals in Appalachian Power, Indiana Michigan Power and PSO to meet demand.
The company is waiting on a ruling from the Public Utilities Commission of Ohio over proposed tariffs for new large-scale data centers that would require them to pay 85% of their projected energy use each month to cover the cost of infrastructure. AEP filed a settlement agreement with PUCO in October.
“Clearly, we’re going to make sure that this doesn’t fall on the shoulders of our existing customers, and make sure that the appropriate parties who are driving the incremental cost will pay for the incremental cost,” Fehrman said.
AEP reported year-end earnings of $2.97 billion ($5.60/share), an increase from 2023’s performance of $2.21 billion ($4.26/share). For the quarter, earnings were $664 million ($1.25/share), compared to last year’s fourth quarter of $336 million ($0.64/share).
The company’s share price closed at $100.99 on Feb. 13, off $1.36 from its previous close.
