By Suzanne Herel

American Electric Power reported fourth-quarter earnings of $191 million ($0.39/share), compared with $346 million ($0.71/share) for the same period last year. Full-year earnings were $1.634 billion ($3.34/share), compared with $1.48 billion ($3.04/share) in 2013.

The Columbus, Ohio-based company attributed the fourth-quarter drop to the termination of a long-term coal contract.

However, CEO Nicholas Akins said the company benefited from successful regulatory proceedings in several states.

“The reliable performance of our generation fleet during colder-than-normal temperatures in 2014 gave us the ability to advance spending from future years into 2014. Those shifts, combined with our initiatives to put in place sustainable process improvements, will help us manage the revenue challenges presented by the Ohio deregulation transition and the 2016-2017 PJM capacity market results,” Akins said.

Chief Financial Officer Brian Tierney referenced PJM’s Capacity Performance proposal, urging the Federal Energy Regulatory Commission to approve the changes quickly to stabilize PJM’s markets and ensure its reliability amid impending coal unit retirements.

“In regards to the challenges we face for 2015, I think you’re well aware of them — from the earnings shortfall from the PJM capacity pricing and the retail stability rider, the lower natural gas prices and power prices and their impact on our system sales,” he said. The rider was approved by the Public Utilities Commission of Ohio to help the company transition to a competitive market.

Tierney also confirmed that AEP has hired an investment bank to help evaluate the company’s alternatives regarding the disposition of its unregulated businesses.