American Electric Power (AEP) will continue its progress toward a clean energy future by investing in its regulated businesses and renewable generation. The company's 2021 operating earnings (earnings excluding special items) guidance range of US$4.51 to US$4.71 per share reflects its projected annual operating earnings growth rate of 5% to 7%.
Operating earnings could differ from those prepared in accordance with Generally Accepted Accounting Principles (GAAP) for matters such as impairments, divestitures, or changes in accounting principles. The AEP is unable to forecast if any of these items will occur or any amounts that may be recorded for future periods. Therefore, the company is not able to provide a corresponding GAAP equivalent for earnings guidance.
The AEP plans to invest US$37 billion in capital from 2021 through 2025, with the bulk allocated to regulated businesses and renewables. The AEP's capital plan includes US$26.7 billion in transmission and distribution (T&D) operations investments to continue updating infrastructure and implementing new technologies to benefit customers. During the same period, the AEP plans to invest US$2.8 billion in regulated renewable generation and US$2.1 billion in competitive, contracted renewable projects.
"As the AEP transitions to a cleaner energy future, we're creating new solutions for customers, while also bringing value to our shareholders. The company's capital investments reflect our commitment to enhancing service and delivering reliable, clean energy and advanced technologies that exceed our customers' expectations," said Nicholas K. Akins, AEP chairman, president, and chief executive officer.
"We plan to invest 14% of our capital through 2025 in renewable energy within and outside our traditional service territory, and we project renewables will represent approximately 40% of our fuel mix by 2030. As part of our ongoing efforts to diversify our energy portfolio, the AEP received approval this year to move forward with the North Central wind facilities, which will bring 1485 MW of clean energy to Southwestern Electric Power Co. and Public Service Company of Oklahoma customers in Arkansas, Louisiana, and Oklahoma.
"Another significant piece of our capital plan is our investment in wires, with 71% allocated to improving and updating the energy grid. By integrating new technologies to optimize distribution and transmission networks, we'll be better equipped to continue delivering reliable and affordable clean energy to customers. We also announced a goal to replace 100% of the company's 2300 cars and light-duty trucks with electric vehicle (EV) alternatives by 2030, and we plan to transition medium- and heavy-duty vehicles as electric or hybrid models become available.
"The AEP's strong financial performance continues to provide value to our shareholders. This year, we increased our quarterly dividend by 4 cents to 74 cents a share and delivered our 442nd consecutive quarterly cash dividend," Akins said.
