AEP Executives Plan to Ramp Capex Budget 30% to $70B
Building on strong demand and an expected 24 gigawatts of new load growth over the next five years, the leaders of American Electric Power Co. Inc. said July 30 they expect to soon supersize the company’s five-year capital plan to $70 billion from the current $54 billion.
Executives delivered the preliminary update to Columbus-based AEP’s spending plans after reporting second-quarter results that showed normalized total load growth of 4.8% while commercial and industrial load across the company’s 11-state footprint—powered by a surging data-center sector—rose more than 6% for the fourth consecutive quarter.
On top of that, the teams led by President and Chief Executive Officer Bill Fehrman secured about 3 gigawatts of customer commitments from data center operators—who now know what their future energy commitments will be because of new rate structures AEP has developed—as well as manufacturing companies and other big users.
“We believe this amount of committed capacity is differential compared to almost any other utility and we are well prepared to deliver on this for our customers and our states,” Fehrman said on a conference call with analysts. “Beyond the 24 gigawatts, customers are also actively seeking to connect approximately 190 gigawatts of additional load to our system. This is five times our current system size of 37 gigawatts.”
Fehrman and other executives will provide more details in roughly three months on the planned capex bump to $70 billion for the 2026-2030 window. On July 30, they noted that transmission work will account for about 50% of that spending while 10% will go to distribution buildouts and 40% to new generation assets. In AEP’s current 2025-2029 plan, transmission also claims about 40% of allocated dollars while distribution and generation each account for about a quarter of total dollars.
“We have a lot of reshoring of manufacturing and we have an incredible amount of economic development of existing businesses that continue to grow,” he said. “We’re in a tremendously positive place. We’ve got exceptional opportunities to continue to attract these customers and we’re going to do everything in our power to execute on these agreements.”
AEP earned a net profit of more than $1.2 billion on revenues of nearly $5.1 billion in the three months that ended June 30. In the same period of last year, those numbers were $340 million and $4.6 billion, respectively. (This year’s profits were boosted by a Federal Energy Regulatory Commission order on transmission formula rates from 2021 through this year that added $499 million in net income across AEP’s businesses.) Operating profits rose to $766 million from $662 million, with the company’s vertically integrated utilities accounting for nearly $52 million of that increase.
Shares of AEP (Ticker: AEP) rose nearly 4% to more than $113 after the earnings report and conference call. They are now up more than 15% over the past six months, growing the company’s market capitalization to more than $60 billion.
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications T&D World, Healthcare Innovation, IndustryWeek, FleetOwner and Oil & Gas Journal. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.