COLUMBUS, Ohio, May 13, 2024
/PRNewswire/ -- American Electric Power (Nasdaq: AEP) announced
today it will retain its retail energy business, AEP Energy. The
company is reaffirming its 2024 operating earnings guidance of
$5.53 to $5.73 per share, long-term growth rate of 6% to
7% and FFO/Debt target of 14% to 15%.
AEP management will meet with investors tomorrow at the Citi
2024 Energy Conference. The company's updated cash flow forecast is
available at https://www.aep.com/investors/ in the investor
presentation for the conference. There is no change to AEP's equity
financing plan resulting from this decision.
"We determined that AEP Energy fits into our current portfolio
and strategy by providing value to our customers and investors,"
said Ben Fowke, AEP interim chief
executive officer and president. "As load continues to grow in our
deregulated states, AEP Energy keeps us closely connected to
opportunities to support this demand and provide tailored energy
solutions to customers."
AEP Energy is a certified competitive retail electricity and
natural gas supply provider operating in 28 service territories in
six states and Washington, D.C.
with 700,000 customers.
Today, AEP also announced it signed an agreement to sell
its distributed resources business, AEP OnSite Partners. AEP
expects to net approximately $315
million in cash after taxes and transaction fees. The sale
is expected to close in the third quarter of 2024, pending
regulatory approvals.
At American Electric Power, based in Columbus, Ohio, we understand that our
customers and communities depend on safe, reliable and affordable
power. Our nearly 17,000 employees operate and maintain more than
40,000 miles of transmission lines, the nation's largest electric
transmission system, and more than 225,000 miles of distribution
lines to deliver power to 5.6 million customers in 11 states. AEP
also is one of the nation's largest electricity producers with
approximately 29,000 megawatts of diverse generating capacity,
including nearly 6,000 megawatts of renewable energy. AEP is
investing $43 billion over the next
five years to make the electric grid cleaner and more reliable. We
are on track to reach an 80% reduction in carbon dioxide emissions
from 2005 levels by 2030 and have a goal to achieve net zero by
2045. AEP is recognized consistently for its focus on
sustainability, community engagement 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 economic
impact of increased global trade tensions including the conflicts
in Ukraine and the Middle East, and the adoption or expansion of
economic sanctions or trade restrictions; inflationary or
deflationary interest rate trends; volatility and disruptions in
the financial markets precipitated by any cause, including failure
to make progress on federal budget or debt ceiling matters,
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, subsidiaries and tax credits,
and anticipated securitizations, do not materialize or do not
materialize at the level anticipated, 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; limitations or
restrictions on the amounts and types of insurance available to
cover losses that might arise in connection with natural disasters
or operations; 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; the impact of pandemics and
any associated disruption of AEP's business operations due to
impacts on economic or market conditions, costs of compliance with
potential government regulations, electricity usage, supply chain
issues, customers, service providers, vendors and suppliers; 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 generation plants and related assets; the impact of federal tax
legislation on results of operations, financial condition, cash
flows or credit ratings; the risks associated with fuels used
before, during and after the generation of electricity and the
byproducts and wastes of such fuels, including coal ash and spent
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 or regulatory proceedings or investigations; AEP's
ability to efficiently manage 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; the
impact of changing expectations and demands of customers,
regulators, investors and stakeholders, including focus on
environmental, social and governance concerns; 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,
wildfires, cyber security threats and other catastrophic events;
and the ability to attract and retain the requisite work force and
key personnel.
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SOURCE American Electric Power