- 2022 operating earnings guidance narrowed to $4.97-$5.07 per
share and midpoint raised to $5.02;
2023 operating earnings guidance range of $5.19 to $5.39
announced
- Emission reduction targets accelerated, including new net zero
goal by 2045 and 80% reduction in full Scope 1 emissions by 2030
from 2005 baseline
- Strategic review of retail energy business will begin; company
on track to divest unregulated renewable assets and complete
Kentucky sale
COLUMBUS, Ohio, Oct. 4, 2022
/PRNewswire/ -- American Electric Power (Nasdaq: AEP) plans to
invest in its regulated businesses, accelerate its carbon reduction
targets and streamline the business to drive value for customers,
communities and investors. AEP leadership will share the company's
financial plan and strategy with analysts in New York City today. The presentation will be
webcast live at 1:30 p.m. ET at
https://aep.com/investors/events.
AEP narrowed its 2022 operating earnings (earnings excluding
special items) guidance range to $4.97-$5.07 per
share, raising the midpoint to $5.02
per share. The company also announced its 2023 operating earnings
guidance range of $5.19 to
$5.39 per share with a projected
annual operating earnings growth rate of 6% to 7%.
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 committed to providing maximum value to our customers
and stakeholders, while de-risking and simplifying the business
through active management of our portfolio," said Julie Sloat, AEP president and chief financial
officer. "Our strategic vision prioritizes delivering clean,
reliable energy and service offerings that boost and empower the
communities we serve, all while maintaining affordability for our
customers and offering significant shareholder value."
The company plans to invest $40
billion in capital from 2023 through 2027 with an emphasis
on transmission, distribution and renewable energy. AEP will
allocate $26 billion to transmission
and distribution operations to continue building a modern,
efficient, reliable and resilient energy grid. During the same
period, AEP plans to invest $9
billion in regulated renewable generation.
"Nearly all of our capital will be allocated to our regulated
businesses, and 90% of our future investment will focus on wires
and renewables," Sloat said. "This approach will enable us to
enhance service for customers, advance the clean energy transition
and take advantage of a robust pipeline of growth opportunities in
the grid and renewable energy space. Our high-growth transmission
business has a long runway of investment opportunities focused on
improving system performance, increasing reliability and resiliency
and enhancing market efficiency."
As the company transitions to a clean energy future, AEP is
adjusting its near-term carbon dioxide emission reduction target
from a 2000 baseline to a 2005 baseline, upgrading its 80%
reduction by 2030 target to include full Scope 1 emissions and
accelerating its net-zero goal by five years to 2045.
"AEP has a proven track record of reducing fleet emissions and
repeatedly has reached our goals ahead of schedule," said
Nicholas K. Akins, AEP chair and
chief executive officer. "Raising our carbon reduction targets
reflects our progress in reducing our environmental footprint and
delivering more low-emissions energy to our customers. We're
confident we can continue this momentum to a net-zero future by
integrating more clean energy resources, strengthening the energy
grid and harnessing the power of emerging technologies. In addition
to environmental benefits, renewable resources offer stability for
customers from fuel price volatility."
AEP announced Sept. 30 that it
expects to complete the sale of its Kentucky operations to Liberty in January 2023. Earlier this year, AEP also
announced it would sell its portfolio of contracted, unregulated
renewable energy assets. The sales process for those renewable
resources began in August 2022 and is
on track to close during the second quarter of 2023. AEP also will
initiate a strategic review of its retail business as part of its
ongoing strategy to de-risk and streamline the company.
"The sale of our unregulated, contracted renewable assets and
our Kentucky operations will allow
us to shift capital to revitalize our transmission and distribution
systems and implement energy solutions to benefit our customers and
communities," Sloat said. "We're beginning a strategic review of
our retail business as we focus on growth in our regulated
businesses and simplify the structure of the company."
American Electric Power, based in Columbus, Ohio, is powering a cleaner,
brighter energy future for its customers and communities. AEP's
approximately 16,700 employees operate and maintain the nation's
largest electricity transmission system and more than 224,000 miles
of distribution lines to safely deliver reliable and affordable
power to 5.5 million regulated customers in 11 states. AEP also is
one of the nation's largest electricity producers with
approximately 31,000 megawatts of diverse generating capacity,
including more than 7,100 megawatts of renewable energy. The
company's plans include growing its renewable generation portfolio
to approximately 50% of total capacity by 2030. AEP is on track to
reach an 80% reduction in carbon dioxide emissions from 2005 levels
by 2030 and has committed to achieving net zero by 2045. AEP is
recognized consistently for its focus on sustainability, community
engagement, and diversity, equity 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, including COVID-19, and any associated disruption of
AEP's business operations due to impacts on economic or market
conditions, costs of compliance with potential government
regulations and employees' reactions to those regulations,
electricity usage, supply chain issues, customers, service
providers, vendors and suppliers; the economic impact of escalating
global trade tensions including the conflict between Russia and Ukraine, and the adoption or expansion of
economic sanctions or trade restrictions; 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 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; 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 AEP's generation plants and related assets; the risks associated
with fuels used before, during and after the generation of
electricity, including coal ash and 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 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,
naturally occurring and human-caused fires, 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