- 2024 operating earnings guidance range of $5.53 to $5.73 per
share announced
- Five-year, $43 billion capital
plan emphasizes investments in wires and renewables to
support needs of customers
- Economic development strategy bolsters strong load projections
over the next three years
COLUMBUS, Ohio, Nov. 10, 2023 /PRNewswire/ -- American Electric
Power (Nasdaq: AEP) will continue to actively manage its portfolio
and invest in its regulated operations to generate value for
customers, communities and investors. The company reaffirmed its
narrowed 2023 operating earnings guidance range of $5.24 to $5.34 per
share with a midpoint of $5.29 and
announced its 2024 guidance range of $5.53 to $5.73 per
share. AEP also reaffirmed its projected long-term growth rate of
6% to 7% and FFO/Debt target of 14% to 15%. AEP management will
share the company's earnings growth opportunities with investors
and analysts at the annual Edison Electric Institute Financial
Conference that begins Nov. 12 in
Phoenix, Arizona.
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. AEP is unable to forecast if any of these items
will occur or any amounts that may be recorded for future periods.
Therefore, AEP is not able to provide a corresponding GAAP
equivalent for earnings guidance.
"AEP is investing in a cleaner, more resilient energy system of
the future, fulfilling our commitments to stakeholders and powering
growth," said Julie Sloat, AEP
chair, president and chief executive officer. "We're keeping
customers at the center of our strategy, which is reflected in our
five-year capital plan that bolsters our work to deliver reliable
and affordable energy.
"By effectively managing our business while making these needed
investments and capitalizing on the benefits of the Inflation
Reduction Act, we have reduced our projected customer rate impacts
across AEP's operating companies to 3% annually over the next five
years. We're working with regulators, policymakers and other
stakeholders in our states on strategies to ensure timely recovery
of costs, while managing bill impacts for customers," Sloat
said.
AEP will invest nearly all capital in its regulated businesses
as it simplifies and de-risks operations. The company's five-year,
$43 billion capital investment plan
allocates more than $27 billion to
transmission and distribution.
"Our robust capital investment plan includes $16 billion for transmission and $11.3 billion in distribution to continue to
modernize the grid, increase reliability, integrate renewable
resources and build infrastructure for new customers," Sloat
said. "We have a significant pipeline of opportunities to invest in
our wires infrastructure as we upgrade the system to benefit
customers and deliver on our 6%-7% EPS growth.
"In our vertically integrated states, our current integrated
resource plans identify a significant need for new generation over
the next decade as electrification and economic development
contribute to increased load. We're investing $9.4 billion in regulated renewables over
the next five years to support the needs of our customers with
fuel-free power. This is part of our plan to add 21.5 gigawatts of
new, diverse generation resources between 2024 and 2033. Load
projections in most of our service territory remain strong,
reinforced by our focus on economic development to bring jobs and
growth opportunities to our communities," Sloat said.
AEP completed the sale of its 1,365 MW unregulated renewables
portfolio in August, netting approximately $1.2 billion. The company remains on track with
the previously announced sales processes for its retail and
distributed resources businesses, its share of a renewable energy
joint venture and two non-core transmission joint ventures. AEP
expects to complete the previously announced strategic review of
its Transource Energy joint venture this year.
"The sales and strategic review of our non-core and competitive
businesses will be key in streamlining the company, shifting
capital to our regulated operations and strengthening our balance
sheet," said Sloat.
AEP raised its quarterly dividend to 88
cents a share in October, an increase of 5 cents per share. This is the company's
454th consecutive cash dividend, and AEP has paid a cash
dividend on its common stock every quarter since 1910.
"Our dividend growth is in line with our earnings growth range
and targeted payout ratio of 60% to 70%," Sloat said.
At American Electric Power, based in Columbus, Ohio, we understand that our
customers and communities depend on safe, reliable and affordable
power. Our nearly 17,000 employees operate and maintain more than
40,000 miles of transmission lines, the nation's largest electric
transmission system, and more than 225,000 miles of distribution
lines to deliver power to 5.6 million customers in 11 states. AEP
also is one of the nation's largest electricity producers with
nearly 29,000 megawatts of diverse generating capacity, including
approximately 6,100 megawatts of renewable energy. AEP is investing
$43 billion over the next five years
to make the electric grid cleaner and more reliable. We are on
track to reach an 80% reduction in carbon dioxide emissions from
2005 levels by 2030 and have a goal to achieve net zero by 2045.
AEP is recognized consistently for its focus on sustainability,
community engagement and inclusion. AEP's family of companies
includes utilities AEP Ohio, AEP Texas, Appalachian Power (in
Virginia and West Virginia), AEP Appalachian Power (in
Tennessee), Indiana Michigan
Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power
Company (in Arkansas, Louisiana, east Texas and the Texas
Panhandle). AEP also owns AEP Energy, which provides
innovative competitive energy solutions nationwide. For more
information, visit aep.com.
This report made by American Electric Power and its Registrant
Subsidiaries contains forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934. Although AEP
and each of its Registrant Subsidiaries believe that their
expectations are based on reasonable assumptions, any such
statements may be influenced by factors that could cause actual
outcomes and results to be materially different from those
projected. Among the factors that could cause actual results to
differ materially from those in the forward-looking statements are:
changes in economic conditions, electric market demand and
demographic patterns in AEP service territories; the impact of
pandemics and any associated disruption of AEP's business
operations due to impacts on economic or market conditions, costs
of compliance with potential government regulations, electricity
usage, supply chain issues, customers, service providers, vendors
and suppliers; the economic impact of increased global trade
tensions including the conflicts in Ukraine and the Middle East, and the adoption or expansion of
economic sanctions or trade restrictions; inflationary or
deflationary interest rate trends; volatility and disruptions in
the financial markets precipitated by any cause, including failure
to make progress on federal budget or debt ceiling matters,
particularly developments affecting the availability or cost of
capital to finance new capital projects and refinance existing
debt; the availability and cost of funds to finance working capital
and capital needs, particularly if expected sources of capital,
such as proceeds from the sale of assets or subsidiaries, do not
materialize, and during periods when the time lag between incurring
costs and recovery is long and the costs are material; decreased
demand for electricity; weather conditions, including storms and
drought conditions, and AEP's ability to recover significant storm
restoration costs; limitations or restrictions on the amounts and
types of insurance available to cover losses that might arise in
connection with natural disasters or operations; the cost of fuel
and its transportation, the creditworthiness and performance of
fuel suppliers and transporters and the cost of storing and
disposing of used fuel, including coal ash and spent nuclear fuel;
the availability of fuel and necessary generation capacity and the
performance of generation plants; AEP's ability to recover fuel and
other energy costs through regulated or competitive electric rates;
the ability to transition from fossil generation and the ability to
build or acquire renewable generation, transmission lines and
facilities (including the ability to obtain any necessary
regulatory approvals and permits) when needed at acceptable prices
and terms, including favorable tax treatment, and to recover those
costs; new legislation, litigation and government regulation,
including changes to tax laws and regulations, oversight of nuclear
generation, energy commodity trading and new or heightened
requirements for reduced emissions of sulfur, nitrogen, mercury,
carbon, soot or particulate matter and other substances that could
impact the continued operation, cost recovery, and/or profitability
of generation plants and related assets; the impact of federal tax
legislation on results of operations, financial condition, cash
flows or credit ratings; the risks associated with fuels used
before, during and after the generation of electricity and the
byproducts and wastes of such fuels, including coal ash and spent
nuclear fuel; timing and resolution of pending and future rate
cases, negotiations and other regulatory decisions, including rate
or other recovery of new investments in generation, distribution
and transmission service and environmental compliance; resolution
of litigation or regulatory proceedings or investigations; AEP's
ability to constrain operation and maintenance costs; prices and
demand for power generated and sold at wholesale; changes in
technology, particularly with respect to energy storage and new,
developing, alternative or distributed sources of generation; AEP's
ability to recover through rates any remaining unrecovered
investment in generation units that may be retired before the end
of their previously projected useful lives; volatility and changes
in markets for coal and other energy-related commodities,
particularly changes in the price of natural gas; the impact of
changing expectations and demands of customers, regulators,
investors and stakeholders, including heightened emphasis on
environmental, social and governance concerns; changes in utility
regulation and the allocation of costs within regional transmission
organizations, including ERCOT, PJM and SPP; changes in the
creditworthiness of the counterparties with contractual
arrangements, including participants in the energy trading market;
actions of rating agencies, including changes in the ratings of
debt; the impact of volatility in the capital markets on the value
of the investments held by AEP's pension, other postretirement
benefit plans, captive insurance entity and nuclear decommissioning
trust and the impact of such volatility on future funding
requirements; accounting standards periodically issued by
accounting standard-setting bodies; other risks and unforeseen
events, including wars and military conflicts, the effects of
terrorism (including increased security costs), embargoes,
wildfires, cyber security threats and other catastrophic events;
and the ability to attract and retain the requisite work force and
key personnel.
WEBSITE DISCLOSURE
AEP may use its website as a distribution channel for material
company information. Financial and other important information
regarding AEP is routinely posted on and accessible through AEP's
website at https://www.aep.com/investors/. In addition, you may
automatically receive email alerts and other information about AEP
when you enroll your email address by visiting the "Email Alerts"
section at https://www.aep.com/investors/.
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SOURCE American Electric Power