- Reaffirmed 2022 operating earnings guidance range of
$4.97-$5.07 per share and midpoint of $5.02; 2023 operating earnings guidance range of
$5.19 to $5.39 per share
- Five-year, $40 billion capital
plan emphasizes investment in wires and renewables
- Company's 10-year regulated generation plan outlines nearly
15,700 MW of renewables and energy storage to meet capacity needs,
manage customer affordability and support 2045 net zero target
COLUMBUS, Ohio, Nov. 11,
2022 /PRNewswire/ -- American Electric Power (Nasdaq:
AEP) will continue to invest in its regulated operations as the
company builds a cleaner, more resilient energy system to benefit
both customers and shareholders. The company reaffirmed its 2022
narrowed operating earnings guidance range of $4.97 to $5.07 per
share with an increased midpoint of $5.02 and its 2023 guidance range of $5.19 to $5.39 per
share with a projected annual operating earnings growth rate of 6%
to 7%. AEP management will share the company's earnings growth
strategy at the annual Edison Electric Institute Financial
Conference that begins Nov. 13 in
Hollywood, Florida.
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 has a proven track record of exceeding earnings projections
and raising our guidance while delivering reliable energy and
advancing toward a clean energy future," said Julie Sloat, AEP president and chief financial
officer. "We're committed to building upon this success by actively
managing the business and executing our strategy to ensure we're in
the best position to generate value for our customers, communities
and investors."
AEP will invest nearly all capital in its regulated businesses
as it de-risks and streamlines its portfolio. The company's
five-year, $40 billion capital
investment plan allocates $26 billion
to wires and $9 billion to regulated
renewables.
"Our high-growth transmission business contributes more than
half of our earnings per share and provides significant
opportunities to deploy capital," Sloat said. "From 2023 through
2027, we're investing $15 billion to
continue constructing modern, resilient transmission infrastructure
that supports the evolving needs of our customers and a clean
energy economy."
The company recently announced its new target of reaching net
zero carbon dioxide emissions by 2045. It also adjusted its
near-term carbon dioxide emission reduction target from a 2000
baseline to a 2005 baseline and upgraded its 80% reduction by 2030
target to include full Scope 1 emissions.
"We see a clear pathway to achieve our accelerated carbon
reduction goal and continue to explore new technologies to close
the gap," said Nicholas K. Akins,
AEP chair and chief executive officer. "Over the next 10 years, our
regulated generation plan outlines nearly 15,700 megawatts of
long-term investment potential in renewables and energy storage to
meet our capacity needs to serve our customers and support the
transition to net zero. Diversifying our generation portfolio also
will be key as we focus on managing affordability for our customers
and reducing the impact of fuel price volatility."
AEP raised its quarterly dividend to 83
cents a share in October, an increase of 5 cents per share. The company's dividend growth
is in line with its long-term growth rate and within its targeted
payout ratio of 60-70%.
"This quarter marks our 450th consecutive quarterly
cash dividend, and we're pleased to continue rewarding our valued
shareholders with increased returns," Akins said.
AEP expects to close on the sale of its Kentucky operations in January 2023 and is targeting completion of its
unregulated contracted renewables sale in the second quarter of
2023. The company also plans to complete the review of its retail
business in the first half of 2023.
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 2032. 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