American Electric Power(US:AEP)2025-10-29 14:02Financial Data and Key Metrics Changes - American Electric Power reported third quarter 2025 operating earnings of $1.80 per share, a decrease from $1.85 per share in the same period last year, primarily due to the prior year's sale of the onsite partners' distributed resources business [24][25] - Year-to-date operating earnings totaled $4.78 per share, up from $4.38 per share in 2024, representing a 9% year-over-year increase [25][26] - The company reaffirmed its 2025 full-year operating earnings range of $5.75-$5.95 per share, guiding to the upper half of this range, and introduced a 2026 operating earnings guidance range of $6.15-$6.45 per share, reflecting an approximate 8% increase [9][26] Business Line Data and Key Metrics Changes - Significant commercial and industrial load growth of nearly 8% on a rolling 12-month basis as of September 30, 2025, was noted, driven by favorable rate changes and strong transmission investment execution [25][26] - The company has secured 28 GW of contracted load additions, up from the previously reported 24 GW, which are backed by energy service agreements or letters of agreement [10][11] Market Data and Key Metrics Changes - AEP projects a system peak demand of 65 GW by 2030, with a load growth of almost 76% in the next five years, particularly in Indiana, Ohio, Oklahoma, and Texas [10][11] - The company highlighted that large annual capital budgets from hyperscalers reinforce the conviction of demand growth, with significant contributions from data centers and reshoring of manufacturing [9][10] Company Strategy and Development Direction - AEP announced a new long-term operating earnings growth rate of 7%-9% for 2026-2030, with an expected 9% CAGR over the five-year period, supported by a $72 billion capital plan [7][8] - The company is focused on operational excellence and engaging with regulators to achieve constructive outcomes that benefit both customers and shareholders [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and team, emphasizing the importance of affordability and financial strength while executing the capital plan [20][35] - The management team is actively working with legislators and policymakers to reduce regulatory lag and improve forecasted regulated ROEs to 9.5% by 2030 [15][16] Other Important Information - AEP's capital plan includes over $7 billion for renewable energy deployment, reflecting the company's commitment to balancing customer demands for both gas and renewables [75] - The company has secured significant agreements for turbines and high-voltage transmission equipment, positioning itself well for future growth [54] Q&A Session Summary Question: Earnings step up and Ohio rate case filing - Trevor explained that earnings growth is driven by the capital plan, with significant CapEx deployed in 2027 and 2028, and positive legislative outcomes will manifest during this period [39][40] Question: Composition of equity needs - Trevor noted that the company anticipates 30%-40% equity for the capital plan, with proactive measures already taken to address growth equity needs [42][43] Question: Earnings growth in 2028-2030 - Trevor indicated that the company expects to be at or above the high end of the growth rate in 2028, 2029, and 2030, with a flat growth assumption during those years [50][51] Question: Data center load growth and transmission capacity - Bill highlighted that 80% of the incremental load growth is tied to data centers, and the company is well-positioned to connect these customers efficiently [71][73] Question: Balance between renewables and gas - Bill stated that the company is focused on aligning generation planning with state energy policies, with a significant capital plan for renewables [75] Question: Future growth beyond 2030 - Trevor expressed confidence in the potential for continued load growth beyond 2030, emphasizing the importance of signed contracts and ongoing discussions [85][86]