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November 08, 2019
AEP To Continue Investment in Regulated Businesses and Renewables, Reaffirms Operating Earnings Growth Rate of 5 Percent to 7 Percent
COLUMBUS, Ohio, Nov. 8, 2019 – American Electric Power (NYSE: AEP) will continue focusing capital investments in its regulated operations and contracted renewables as the company builds a cleaner, smarter and more reliable energy system to benefit both customers and shareholders. The company reaffirmed its 2020 operating earnings (earnings excluding special items) guidance range of $4.25 to $4.45 per share, and its projected annual operating earnings growth rate of 5% to 7%. AEP management will discuss the company’s financial outlook and earnings growth strategy at the annual Edison Electric Institute Financial Conference that begins Nov. 10 in Orlando, Fla.
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 plans to invest $33 billion in capital from 2020 through 2024, with the bulk of capital allocated to regulated businesses and contracted renewables. The capital plan outlines a $25.7 billion investment in transmission and distribution operations to implement new technologies and update infrastructure. The company also has $2.3 billion in renewable generation in its capital plan during this same period, including approximately $2.1 billion for competitive, contracted renewable projects.
“Investing in the technology and resources to deliver reliable energy to our customers and value to our investors remains our top priority. AEP’s capital investments reflect our commitment to improving the customer experience through upgrading our equipment and infrastructure, implementing cutting-edge technologies and transitioning to a cleaner, more balanced fuel mix,” said Nicholas K. Akins, AEP chairman, president and chief executive officer.
“We’re directing 78% of our capital to continue updating and improving our energy grid. Whether it’s revitalizing our transmission network or installing the newest equipment on our distribution systems, our focus remains on delivering the reliable and affordable electricity our customers expect.
“We continue to make significant progress in our transition to a clean energy future. This year, we increased our 2030 carbon dioxide emissions target to 70% from 2000 levels and are confident in our ability to cut emissions by more than 80% from 2000 levels by 2050. Our plan to achieve these goals involves a variety of initiatives, including targeted investment in regulated renewable generation. Pending regulatory approval, our North Central Wind project will provide utility customers in Arkansas, Louisiana, Oklahoma and Texas with 1,485 megawatts of clean, renewable energy.
“Thanks to our consistent earnings growth, we have been able to reward our investors with quarterly dividends for more than 109 years. This October, we raised the dividend by 3 cents to 70 cents a share, and over the past two years we’ve increased the dividend an average of 6.3%,” Akins said.
AEP expects to reduce operations and maintenance expenses, net of earnings offsets, through continuation of targeted cost discipline programs and a focus on digitalization of work while continuing to focus on maintaining a strong balance sheet.
American Electric Power, based in Columbus, Ohio, is focused on building a smarter energy infrastructure and delivering new technologies and custom energy solutions to our customers. AEP's approximately 18,000 employees operate and maintain the nation's largest electricity transmission system and more than 219,000 miles of distribution lines to efficiently deliver safe, reliable power to nearly 5.4 million regulated customers in 11 states. AEP also is one of the nation's largest electricity producers with approximately 32,000 megawatts of diverse generating capacity, including about 5,200 megawatts of renewable energy. 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, AEP Energy Partners, AEP OnSite Partners, and AEP Renewables, which provide 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; inflationary or deflationary interest rate trends; volatility in the financial markets, 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 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; 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 generating capacity and the performance of AEP’s generating plants; AEP’s ability to recover fuel and other energy costs through regulated or competitive electric rates; AEP’s 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 and to recover those costs; new legislation, litigation and government regulation, including 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 AEP’s generation plants and related assets; evolving public perception of the risks associated with fuels used before, during and after the generation of electricity, including 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; 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; 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 whom AEP has contractual arrangements, including participants in the energy trading market; actions of rating agencies, including changes in the ratings of AEP debt; the impact of volatility in the capital markets on the value of the investments held by AEP’s pension, OPEB, captive insurance entity and nuclear decommissioning trust and the impact of such volatility on future funding requirements; accounting pronouncements periodically issued by accounting standard-setting bodies; and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes, naturally occurring and human-caused fires, cyber security threats and other catastrophic events.
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