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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--American Electric Power (NYSE:AEP) (Columbus, Ohio) plans to make about $33 billion of capital expenditures (capex) over the 2019-2023 period, according to first-quarter earnings information released by the company. In its year-earlier first-quarter earnings statement, the utility holding company said it planned in invest $17.7 billion over three years (2018-2020).
For the 2019-2023 period, AEP plans to direct all of its capex to regulated businesses and contracted renewables. Three-quarters of that $33 billion -- roughly $24.75 billion -- will be allocated to the company's wires business, both its own regulated assets and its share of a joint venture transmission holding company. That transmission joint venture is regulated at the federal level as its projects cross state lines.
Industrial Info is tracking about 277 AEP capital projects valued at about $3.44 billion. The states with the highest levels of scheduled project activity include:
AEP's owned transmission assets will receive about $8.3 billion in new investment over the next five years. The same level of investment is scheduled for the company's distribution business and its transmission joint venture business, AEP executives told investors on April 25.
Click on the image at right to see a pie chart of AEP's capex for the next five years.
In a separate investor event, the SunTrust Robinson Humphrey Utility & Power Summit, held April 3, AEP executives provided a more detailed breakdown of their planned $33 billion capital spend, by year and by utility.
By year, the largest capital investments will be made in 2019, at about $7.8 billion. In 2020, capex is expected to fall to $5.8 billion across the AEP system before rising to $6.1 billion, $6.5 billion and $6.7 billion in 2021, 2022 and 2023, respectively.
Click on the image at right to see a bar chart of AEP's system-wide capex by year for 2019-2023.
By operating utility, the largest recipients of investment capital over the 2019-2023 period are: AEP Transmission Holding Company ($8.25 billion), AEP Texas Company ($5.76 billion), Appalachian Power Company ($4.27 billion), Ohio Power Company ($3.21 billion) and Indiana Michigan Power Company ($2.89 billion).
Click on the image at right to see a listing of AEP's planned capital spending over 2019-2023 by utility.
At a third recent event, the CECP CEO Investor Forum, held in Chicago May 8, Nicholas Akins, AEP's chairman, president and chief executive, said the utility holding company has lowered carbon dioxide (CO2) emissions by 59% between 2000 and 2018. Further reductions are planned in the coming decades.
Click on the image at right to see AEP's goals for lowering CO2 emissions.
Akins also detailed the significant changes in AEP's generation portfolio: less coal, more gas and more renewables. Coal now accounts for about 46% of AEP's generation, down from 70% in 2005. Further reductions will lower King Coal's share of the portfolio to 27%. Natural gas accounted for 27% of AEP's generation portfolio in 2019, up from 19% in 2005. That share is expected to dip to 22% in the future. Renewables will comprise about 16% of the company's generation fleet this year, up from 4% in 2005. In the future, AEP sees renewables accounting for 40% of its generating capacity.
Click on the image at right to see how AEP's generation portfolio has changed and is expected to continue evolving.
AEP owns 40,000 miles of transmission assets and has 32,000 megawatts (MW) of generation assets under its ownership or covered by a purchased power agreement (PPA). The company serves 5.4 million customers in regulated markets across the country.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
For the 2019-2023 period, AEP plans to direct all of its capex to regulated businesses and contracted renewables. Three-quarters of that $33 billion -- roughly $24.75 billion -- will be allocated to the company's wires business, both its own regulated assets and its share of a joint venture transmission holding company. That transmission joint venture is regulated at the federal level as its projects cross state lines.
Industrial Info is tracking about 277 AEP capital projects valued at about $3.44 billion. The states with the highest levels of scheduled project activity include:
- Texas (49 projects valued at $715 million)
- Indiana (37 projects, $665 million in TIV)
- Ohio (71 projects valued at $554 million)
- West Virginia (37 projects, $498 million in TIV), and
- Michigan (22 projects valued at $303 million)
AEP's owned transmission assets will receive about $8.3 billion in new investment over the next five years. The same level of investment is scheduled for the company's distribution business and its transmission joint venture business, AEP executives told investors on April 25.
In a separate investor event, the SunTrust Robinson Humphrey Utility & Power Summit, held April 3, AEP executives provided a more detailed breakdown of their planned $33 billion capital spend, by year and by utility.
By year, the largest capital investments will be made in 2019, at about $7.8 billion. In 2020, capex is expected to fall to $5.8 billion across the AEP system before rising to $6.1 billion, $6.5 billion and $6.7 billion in 2021, 2022 and 2023, respectively.
By operating utility, the largest recipients of investment capital over the 2019-2023 period are: AEP Transmission Holding Company ($8.25 billion), AEP Texas Company ($5.76 billion), Appalachian Power Company ($4.27 billion), Ohio Power Company ($3.21 billion) and Indiana Michigan Power Company ($2.89 billion).
At a third recent event, the CECP CEO Investor Forum, held in Chicago May 8, Nicholas Akins, AEP's chairman, president and chief executive, said the utility holding company has lowered carbon dioxide (CO2) emissions by 59% between 2000 and 2018. Further reductions are planned in the coming decades.
Akins also detailed the significant changes in AEP's generation portfolio: less coal, more gas and more renewables. Coal now accounts for about 46% of AEP's generation, down from 70% in 2005. Further reductions will lower King Coal's share of the portfolio to 27%. Natural gas accounted for 27% of AEP's generation portfolio in 2019, up from 19% in 2005. That share is expected to dip to 22% in the future. Renewables will comprise about 16% of the company's generation fleet this year, up from 4% in 2005. In the future, AEP sees renewables accounting for 40% of its generating capacity.
AEP owns 40,000 miles of transmission assets and has 32,000 megawatts (MW) of generation assets under its ownership or covered by a purchased power agreement (PPA). The company serves 5.4 million customers in regulated markets across the country.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
