AEP Optimistic on Transmission, Renewables with $4.3 Billion in Projects on Tap

Researched by Industrial Info Resources (Sugar Land, Texas)--American Electric Power (NYSE:AEP) (AEP) (Columbus, Ohio) is optimistic about its growth potential, despite a rough fourth quarter, as the company expects several industrial expansions to come online and global economic conditions to improve this year. In particular, AEP is upping its investment in transmission and distribution (T&D) projects to maintain reliability. Industrial Info is tracking nearly $4.3 billion in active projects involving AEP, more than half of which is attributed to T&D projects.

Click on the image at right for a graph detailing the top 10 U.S. states for AEP projects, by investment value.

AEP announced this week it would invest $6.3 billion in capital expenditures for 2020, "substantially in regulated entities with a particular emphasis on wires." The company reported $153.5 million in earnings for the fourth quarter, compared with $363 million in fourth-quarter 2018, due in part to expenses from previously retired coal-generation assets in Virginia, a recently filed settlement in a Texas base rate case and impairment related to a coal-fired power plant in Conesville, Ohio.

"More than 75% of our capital investments are focused on our wires businesses to enhance service for our customers, including critical transmission investments to replace aging equipment and ensure that we can maintain a reliable, resilient grid," said Nicholas K. Akins, the chief executive officer of AEP, in a quarterly earnings-related press release.

Among AEP's T&D projects nearing or under construction are a series of T&D rebuild projects across the Great Lakes and Mid-Atlantic states, including a 65-mile, $98 million line overhaul from Mishawaka to Fort Wayne, Indiana, connecting the Twin Branch and Robison Park substations; a seven-mile, $27 million line overhaul from LaPorte County, Indiana, to New Buffalo, Michigan, connecting the Bosserman and New Buffalo substations; and a 12-mile, $20 million line overhaul from Haviland to Van Wert, Ohio.

All three of these projects are set to wrap up later this year, at varying times. For more information, see Industrial Info's reports on the Indiana, Indiana-Michigan and Ohio projects.

AEP has been turning its attention to renewable-sourced energy in the past few years, following decades of coal-dominated output. Among the projects on the horizon is an estimated $50 million solar power-generation facility in Lawton, Oklahoma, which is designed to generate 50 megawatts (MW) from ground-mounted photovoltaic (PV) panels. The proposed project is under review and, if approved, would not begin construction until the spring of 2021, at the earliest. For more information, see Industrial Info's project report.

"We've made significant progress in expanding our portfolio of clean energy resources, and the investments we made in our contracted renewables business in 2019 already are contributing positively to earnings," Akins said in the press release.

AEP's slate of coal-power projects point to the resource's rapid decline. Industrial Info is tracking $1.76 billion worth of dismantlement and demolition projects, as well as ash pond and landfill closures, at AEP's coal-fired power plants across the U.S., including three for subsidiary AEP Appalachian Power Company that are set to kick off later this year:

• $30 million dismantlement and demolition of the Philip Sporn Power Station in New Haven, West Virginia; see project report
• $28 million dismantlement and demolition of the Kanawha River Power Station in Glasgow, West Virginia; see project report
• $20 million dismantlement and demolition of a power station in Glen Lyn, Virginia; see project report

In addition to the abovementioned capital-spending projects, Industrial Info is tracking about $60 million worth of maintenance-related projects at AEP facilities. Click here for a list.

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/.