Financial Data and Key Metrics Changes - AEP reported the strongest ever second quarter operating earnings in its 100-year history, with operating earnings of $1.43 per share or $766 million, representing a 14% increase year-over-year from $1.25 per share in 2024 [9][27] - The company is guiding to the upper half of its 2025 operating earnings range of $5.75 to $5.95 per share, reflecting strong year-to-date results [10][39] - AEP reaffirmed its long-term operating earnings growth rate of 6% to 8% [10] Business Line Data and Key Metrics Changes - Operating earnings for vertically integrated utilities increased to $0.56 per share, up $0.10 from the previous year, driven by rate changes and increased load from data centers [28] - The transmission and distribution utility segment earned $0.42 per share, up $0.01 from last year, supported by rate changes and retail sales gains [29] - Generation and Marketing produced $0.17 per share, up $0.05 from last year, with favorable energy margins [31] Market Data and Key Metrics Changes - AEP expects to have 24 gigawatts of incremental load by the end of the decade, up from 21 gigawatts, primarily driven by data centers and reshoring [12] - The company has a significant interconnection queue with approximately 190 gigawatts of additional load seeking to connect to its system, which is five times its current system size of 37 gigawatts [12][35] Company Strategy and Development Direction - AEP is executing a $54 billion capital plan and expects to announce a new five-year capital plan of approximately $70 billion, with allocations of 50% to transmission, 40% to generation, and 10% to distribution [11] - The company is focused on aligning its business with regulatory goals and has secured large load tariffs in multiple states to support economic development [14][15] - AEP is exploring innovative power solutions, including small modular reactors (SMRs) and Bloom fuel cells, to meet growing customer demands [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute its growth strategy, citing strong regulatory support and a disciplined approach to capital allocation [10][18] - The management team highlighted the importance of safety, service, and reliability while navigating complex operational and regulatory landscapes [18][19] - AEP's leadership emphasized the need for continued collaboration with regulators to support infrastructure investments and customer affordability [20][21] Other Important Information - AEP Texas was granted approval for a significant transmission project, and the company has received positive regulatory outcomes in several states [19][23] - The company has a strong liquidity position with over $5.6 billion supported by $6 billion in credit facilities [36][37] Q&A Session Summary Question: CapEx increase and financing needs - Trevor Mihalik indicated that the company has proactively financed its existing capital plan and does not have near-term equity needs, providing flexibility for future financing [42][44] Question: ROE trajectory and impact of regulatory changes - Trevor Mihalik confirmed that the ROE is expected to increase due to the new regulatory mechanisms in Texas, potentially by 50 to 100 basis points [46][48] Question: Plans for small modular reactors (SMRs) - William J. Fehrman discussed the focus on early site permit work for SMRs, emphasizing strong regulatory support in Virginia and Indiana [52][53] Question: Ongoing impact of NOLC changes - Kate Sturgess noted that the ongoing impact from the NOLC change is expected to be around 3 cents per share annually [56][57] Question: Update on West Virginia case - William J. Fehrman provided an update that the West Virginia case is awaiting an order expected in late August or early September [59] Question: CapEx opportunities and future increases - Trevor Mihalik highlighted the tremendous growth opportunities across AEP's service territory, indicating that further increases in CapEx could be possible [64][66] Question: Data center activity and connection timelines - William J. Fehrman explained that AEP's transmission system is attractive for data centers, with wait times for connections typically ranging from five to seven years [70][71]