AEP's $5 Billion in Active Projects Include Coal-Fired Retrofit, Several Power-Line Upgrades

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Researched by Industrial Info Resources (Sugar Land, Texas)--A cooler-than-expected summer depressed sales and profits at American Electric Power Company (NYSE:AEP) (AEP) (Columbus, Ohio), one of the largest U.S. electric utilities, in the third quarter. But officials at the company pointed to improving economic conditions in the 11 states it serves, and plan to continue to invest in its regulated businesses. Industrial Info is tracking nearly $5 billion in active projects involving AEP and its subsidiaries.

Indiana Michigan Power Company, a utility subsidiary of AEP, is planning a $235 million retrofit of the coal-fired Rockport Power Station in Rockport, Indiana. The project involves installing Selective Catalytic Reduction (SCR) technology at Unit 2's Babcock & Wilcox (NYSE:BW) opposed-fired boiler to reduce NOx emissions. Over the summer, an appellate court ruled that AEP also must bear the cost of installing scrubbers at Unit 2, in addition to the SCR. For more information, see Industrial Info's project report.

The Rockport plant, which was named the second-most toxic power plant in Indiana in 2014 by the Environmental Protection Agency, has been the target of ire from residents who complained at a public hearing earlier this month about persistent pollution from the plant and rate hikes from the utility, according to Fort Wayne's The Journal Gazette. Indiana Michigan Power plans to "adjust depreciation of the plant to gain more flexibility as our generation (of electricity) transitions to other energy sources, such as solar, wind and natural gas," according to a statement quoted in The Journal Gazette.

In April, AEP officials announced that over the next three years, the company will invest $17.3 billion in capital, including $13 billion in its transmission and distribution systems and $1.5 billion in new renewable energy, to reduce its dependence on coal. For more information, see April 28, 2017, article - AEP Optimistic About 2017 as it Diversifies from Coal-Fired Power, and August 8, 2017, article - AEP Hopes of Invest in Big Wind Power.

Also in Indiana, AEP is managing Duke Energy Corporation's (NYSE:DUK) (Charlotte, North Carolina) $328 million phase of the Greentown-Reynolds transmission line. The 64-mile overhead project is the first part of a 240-mile line that will connect Duke's substations in Greentown and Reynolds, Indiana. The full project, which includes the construction of 290 towers, is expected to be the largest upgrade to the state's electric grid in decades. For more information, see Industrial Info's project report.

The Public Service Company of Oklahoma, another utility subsidiary, is at work on the Western Oklahoma Transmission Reinforcement Project, which includes a new, $60.3 million line and $20.4 million substation. The line runs 60 miles from the utility's existing substation in Elk City to the new facility in Chisholm, which also will act as a point of intersection between the new line and Oklahoma Gas & Electric's Gracemont Substation in Anadarko. For more information, see Industrial Info's project reports on the new line and Chisholm substation.

In the Mid-Atlantic region, AEP's Appalachian subsidiary is at work on a series of improvements to its lines and substations. AEP Appalachian Power Company's $56 million Fayette County Area Transmission Improvement Project in West Virginia involves building a substation and 16 miles of line, while rebuilding 13 miles of line and installing new equipment at existing substations.

In Virginia, the utility is at work on its $19 million in South Lynchburg Area Improvement Project, which involves adding a substation and more than nine miles of line, while removing more than six miles of older line and a substation, as well as the $28.9 million Fort Blackmore-to-Duffield line, which runs 17 miles from the utility's Hill Substation to Duffield. For more information, see Industrial Info's reports on the Fayette County, South Lynchburg Area and Duffield projects.

AEP's third-quarter sales stood at $4.1 billion, down 12.8% from the same period last year. Profits were reported at $544.7 million, up from a loss of $765.8 million, which was related to a one-time charge related to the value of certain power plants. Excluding that exceptional factor, profits were down 15.1%.

Despite these declines, AEP Chief Executive Officer Nick Akins said in a quarterly earnings release that the overall outlook remains optimistic; for the first time since 2011, all states in AEP's service area have left the recession behind and are recovering economically.

"We experienced industrial sales growth again this quarter across most industries and operating companies, and this industrial growth should positively impact residential and commercial sales in the coming months," Akins said.

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/.