The utility giant’s commercial power load rose 12.4% year-on-year in the first quarter, with hyperscale data centers set to further increase demand.
One of the nation’s largest utility operators said they are continuing to commit to a $54 billion capital plan over the next five years to support growing electricity demand, driven primarily by demand for hyperscale data centers across the United States, manufacturing resumes and growth in key economic developments.
American Electric Power Inc. (AEP), based in Columbus, Ohio, operates 11 regulatory utilities in the Midwest, saying the Trump administration’s tariff policy will have minimal impact on a multi-billion dollar capital plan, including customer commitments for new commercial power over 20 gigawatts by 2030.
According to Factset, the Ohio utility giant easily beat Wall Street’s earnings estimates to $5.333 billion at $1.34 per share.
Emphasizing the strong performance of utility operators in the first quarter, Fehrman said the company plans to invest more than $54 billion in capital expenditures to expand its transmission and distribution system and strengthen its power grid across the country.
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Nationally, AEP’s commercial power loads have increased 12.4% from a year ago across the company’s 11 state footprint, driven primarily by historic large-scale load growth from commercial and industrial customers in Indiana, Ohio, Oklahoma and Texas.
The new transmission project also supports the growing power needs of the oil and gas industry in the Permian Basin of West Texas. In 2023, Texas Gov. Greg Abbott signed the law to develop an electrical reliability plan for the area.
Faleman, who was appointed AEP president and CEO in August 2024 after former CEO Julia Float suddenly resigned early in the year, reconfirmed the company’s annual operating profit guidance of $5.75 to $5.95 per share, and its long-term growth rate is 6% to 8% per year.
“This guidance is strengthened by a balanced, flexible five-year capital plan, with the possibility of incremental investments of up to $10 billion over the same period,” Fehrman told analysts, adding that AEP should add infrastructure to support the company’s increased electricity demand.
According to Fowke, AEP responded to several questions from analysts about increasing power demand for artificial intelligence (AI)-led hyperscale data centers and other large-scale projects, AEP said it is working with a variety of stakeholders and policymakers in areas where the company regulates utilities to address these issues.
“As it grows to meet the demands of our generation, we are engaged with key stakeholders and align our thoughtful investments in the new generation with their needs and state policies,” Faleman said. “Our team has been committed to developing creative energy solutions that keep our customers’ needs at the best.”
According to Fehrman, AEP has submitted integrated resource plans submissions with utility regulators in Arkansas, Indiana, Kentucky, Michigan, Virginia and West Virginia to support capacity generation obligations in those states. Since the last quarter, AEP has said it has connected Amazon and Google’s hyperscale AI-DATA centers in Indiana with “representing billions of dollars.” At the same time, tech customers in Ohio and Texas are planning a project to get online in 2025.
“As we further modernize our energy grid, we can hope to continue working with federal policymakers, regulators and state legislators,” Fehrman said. “Beyond the operating footprint of 11 states, more than 500 existing and potential customers are now actively requesting that a load of approximately 80 gigawatts be connected to the transmission system.”
As of 2:16pm on EST, AEP shares had risen 0.72% at $108.22 on the NASDAQ Stock Exchange.
