The leaders of American Electric Power Co. Inc. say “an incredible backlog” of customer projects will help them reach their lofty 2025 commercial load growth target of 24% after a first quarter in which commercial sales rose more than 12%.
The 12.3% commercial load growth rate early this year was the third quarter in the past four during which that metric topped 12% for Columbus-based AEP. Data centers account for a large portion of that growth and of what’s in the pipeline for the rest of this year and through 2027. Over the next three years, President and CEO Bill Fehrman and his team expect AEP’s total retail sales growth rate to more nearly triple from its 3.0% pace of 2024.
Anchoring those assumptions are customer commitments totaling a whopping 20 gigawatts of incremental load by 2030—which equates to more than half of AEP’s 2024 total summer peak load. And while one prominent data center developer, Microsoft, last month said it will pull back on some of its plans (including a $1 billion project in AEP’s Ohio footprint), Fehrman and CFO Trevor Mihalik say they’re relying on demonstrated demand from multiple customer classes to build their forecasts.
“We’ve got an incredible backlog that wants to come onto our system and we’re very excited about working with those customers,” Fehrman said on a May 6 conference call discussing AEP’s Q1 results. “I don’t really see a reduction in our load coming from data centers or hyperscalers—or the industrials for that matter, because we’ve contracted […] about 6 gigawatts of industrial load as well across the system and [that has] really given us a diversity that will strengthen the company overall.”
“You’ll continue to see additional load coming on over the next several years,” he said. “I wouldn’t say it’s shaped towards the back end or anything to that regard. I think it’s really more just a steady increase in commercial load coming on.”
AEP teams also have been working with regulators across the company’s footprint to set up data center-specific rate structures or tariffs for large-load customers more generally. Fehrman noted May 6 that the company received commission approvals for such rate plans in Indiana, Kentucky and West Virginia.
During the first three months of this year, AEP’s total normalized retail load growth was 3.2%, slightly below the company’s pace for all of 2024. That helped translate into adjusted operating earnings of $823 million, up from $670 million in early 2024. Revenues climbed to $5.46 billion from $5.03 billion.
Shares of AEP (Ticker: AEP) rose nearly 1% to $108.43 after the earnings report. Over the past six months, they have climbed more than 12%, growing the company’s market capitalization to nearly $58 billion.
