American Electric Power (Nasdaq: AEP), the parent company of Indiana Michigan Power, today reported fourth-quarter 2024 earnings, prepared in accordance with Generally Accepted Accounting Principles (GAAP), of $664 million or $1.25 per share, compared with GAAP earnings of $336 million or $0.64 per share in fourth-quarter 2023. Operating earnings for fourth-quarter 2024 were $660 million or $1.24 per share, compared with operating earnings of $647 million or $1.23 per share in fourth-quarter 2023.
Year-end 2024 GAAP earnings were $2.97 billion or $5.60 per share, compared with GAAP earnings of $2.21 billion or $4.26 per share for year-end 2023. Year-end 2024 operating earnings were $2.98 billion or $5.62 per share, compared with operating earnings of $2.72 billion or $5.25 per share for year-end 2023. Operating earnings is a non-GAAP measure representing GAAP earnings excluding certain items. A full reconciliation of GAAP earnings to operating earnings for the quarter and year-to-date is included in the tables at the end of this news release.
“AEP is delivering on our commitment to provide safe, reliable and affordable power for the customers we serve. In 2024, we experienced significant load growth in our commercial class, largely due to economic development in Indiana, Ohio and Texas. We anticipate 8-9% annual total retail load growth from 2025-2027 and ultimately expect to serve more than 20 gigawatts of new load by the end of the decade. Our $54 billion, five-year capital plan that we announced in the fall supports this opportunity as we build infrastructure that meets the needs of our customers, communities and the states that we serve. Further, as we continue to review the full scope of our infrastructure needs, we are evaluating $10 billion of potential incremental investment across our service territory and regional transmission grids. In addition, we are investing in tailored solutions for new individual large loads to meet their requirements and timelines while mitigating rate impacts to existing customers,” said Bill Fehrman, AEP president and chief executive officer.
“Based on the needs of our states, we have filed for approval of 2.3 gigawatts of natural gas generation in PSO and SWEPCO and have active requests for proposals for new generation in Appalachian Power, Indiana Michigan Power and PSO. In addition, our team continues identifying innovative solutions to bring large loads online. Late last year, AEP announced an agreement with Bloom Energy to acquire up to 1 gigawatt of fuel cells to enable data center customers to continue to expand their operations while transmission infrastructure is built. This week, AEP Ohio filed with the Public Utilities Commission of Ohio for approval to install the first two projects, totaling 100 megawatts, using this fuel cell technology.
“Looking to the future, we have engaged in the early-site permit process for small modular reactors at locations in Indiana and Virginia and are leveraging public and private partnerships to advance this work. AEP is a leader in the energy industry, and our engagement in these partnerships is necessary to ensure appropriate risk sharing among the stakeholders while supporting technologies to serve the unprecedented load growth.
“Having reliable, resilient power is equally important to our customers. Approximately two-thirds of our $54 billion capital plan represents investment in our transmission and distribution systems to make our service more reliable. This includes the use of additional advanced metering and smart grid technologies, coupled with traditional reliability work like vegetation management, to strengthen our system’s ability to withstand weather events while reducing the cost of operations and maintenance,” Fehrman said.
AEP Executive Vice President and Chief Financial Officer Trevor Mihalik added, “The $2.82 billion minority equity interest transaction we announced in early January for our Ohio and Indiana Michigan Transmission Companies gives us financial flexibility to redeploy the proceeds and support economic growth in our states, while maintaining our commitment to a strong balance sheet. This was a creative and effective way to finance the growth we are seeing, equivalent to issuing common stock at $170 per share, a significant premium to our current share price. We recently submitted the necessary regulatory filing and expect to close on the transaction in the second half of the year.”
Fehrman concluded, “We are laying a strong foundation for the future at AEP, and our team has made significant progress over the past year. We are entering 2025 with a more streamlined structure and a renewed focus on execution as we advance our capital plan, drive operational excellence, work every day on behalf of our customers and deliver on our commitments to all of our stakeholders.”
EARNINGS GUIDANCE
AEP management reaffirms its 2025 operating earnings guidance range of $5.75 to $5.95 per share. Operating earnings could differ from GAAP earnings for matters such as mark-to-market adjustments, divestitures, impairments or changes in accounting principles. AEP management is not able to forecast if any of these items will occur or any amounts that may be reported for future periods. Therefore, AEP is not able to provide a corresponding GAAP equivalent for earnings guidance.
