American Electric Power Company, Inc. (AEP): Análisis PESTLE [Actualizado en Ene-2025]

En el panorama dinámico de la transformación energética, American Electric Power Company, Inc. (AEP) se encuentra en una encrucijada crítica, navegando por complejos desafíos políticos, económicos y tecnológicos que definirán el futuro de la generación de energía sostenible. A medida que el sector de servicios públicos sufre una interrupción sin precedentes, el enfoque estratégico de AEP para las energía renovable, la modernización de la red y la sostenibilidad ambiental se vuelve cada vez más fundamental, ofreciendo una narración convincente de adaptación e innovación en una era de rápido clima y cambio tecnológico.

American Electric Power Company, Inc. (AEP) - Análisis de mortero: factores políticos

Políticas energéticas federales que influyen en la transición de energía renovable

La Ley de Reducción de Inflación de 2022 proporciona $ 369 mil millones para inversiones de energía limpia, impactando directamente la estrategia renovable de AEP. El crédito fiscal de producción (PTC) ofrece $ 0.027 por kilovatio-hora para la producción de energía eólica.

Política federal	Impacto financiero	Año
Ley de reducción de inflación	$ 369 mil millones de inversión de energía limpia	2022-2032
Crédito fiscal de producción	$ 0.027/kWh para energía eólica	2024

Ambientes regulatorios a nivel estatal que afectan la generación de electricidad

AEP opera en 11 estados con diferentes estándares de cartera renovable.

Estado	Estándar de cartera renovable	Año objetivo
Ohio	12.5% ​​de energía renovable	2027
Texas	Capacidad instalada de 10,000 MW	2025

Incentivos gubernamentales para la infraestructura de energía limpia

• Crédito fiscal de inversión (ITC) del 30% para proyectos solares
• El préstamo de Departamento de Energía garantiza hasta $ 300 millones para la modernización de la red
• Subvenciones a nivel estatal para la infraestructura de almacenamiento de energía

Apoyo político a las iniciativas de descarbonización

Objetivo de la administración Biden: electricidad 100% libre de carbono para 2035.

Objetivo de descarbonización	Porcentaje	Año objetivo
Electricidad sin carbono	100%	2035
La generación renovable actual de AEP	33%	2023

American Electric Power Company, Inc. (AEP) - Análisis de mortero: factores económicos

Los precios de los productos básicos de la energía fluctuante que afectan los costos operativos

Los costos operativos de AEP están significativamente influenciados por la volatilidad de los precios de los productos básicos. A partir de 2024, los precios del gas natural promediaron $ 3.45 por millón de BTU, mientras que los precios del carbón oscilaron entre $ 40 y $ 60 por tonelada corta. Los costos de adquisición de combustible de la compañía afectan directamente los gastos de generación de electricidad.

Mercancía energética	2024 Precio promedio	Cambio año tras año
Gas natural	$ 3.45/mmbtu	-12.3%
Carbón	$ 52/tonelada corta	-5.5%
Costo de generación de electricidad	$ 0.068/kWh	+2.1%

Inversión en modernización e infraestructura de la red

AEP asignó $ 3.8 mil millones para la modernización de la red y las mejoras de infraestructura en 2024. El desglose de gastos de capital incluye:

• Infraestructura de transmisión: $ 1.9 mil millones
• Actualizaciones del sistema de distribución: $ 1.2 mil millones
• Integración de energía renovable: $ 700 millones

Desafíos económicos de posibles mecanismos de precios del carbono

El precio potencial del carbono podría imponer desafíos económicos significativos. Impacto estimado de precios de carbono en las operaciones de AEP:

Escenario de precios de carbono	Costo anual estimado	Impacto potencial de ingresos
Bajo precio de carbono ($ 20/tonelada)	$ 280 millones	-3.2% ingresos
Precio medio de carbono ($ 50/tonelada)	$ 620 millones	-6.7% ingresos
Alto precio de carbono ($ 100/tonelada)	$ 1.2 mil millones	-12.5% ​​ingresos

Variaciones económicas regionales que afectan la demanda de electricidad

AEP opera en 11 estados con diferentes condiciones económicas. Variaciones de demanda de electricidad por región en 2024:

Estado	Demanda de electricidad	Tasa de crecimiento económico
Ohio	38,500 gwh	2.1%
Texas	45,200 gwh	3.5%
Indiana	32,700 gwh	1.8%
Michigan	29,600 gwh	1.5%

American Electric Power Company, Inc. (AEP) - Análisis de mortero: factores sociales

Creciente demanda de consumidores de soluciones de energía sostenible

Según la Administración de Información de Energía de EE. UU., El consumo de energía renovable en los Estados Unidos alcanzó el 12,2% en 2022. La cartera de energía renovable de AEP incluye 7,283 MW de capacidad de generación eólica y solar a partir de 2023.

Tipo de energía renovable	Capacidad (MW)	Porcentaje de cartera
Energía eólica	5,745	78.9%
Energía solar	1,538	21.1%

Cambios demográficos de la fuerza laboral en el sector de servicios públicos

La mediana de edad de los trabajadores del sector de servicios públicos es de 43.5 años, con el 25% de la fuerza laboral que se espera que se retire para 2025. AEP emplea a 17,161 trabajadores a partir de 2023, con un enfoque en reclutar talento más joven en tecnología y roles de energía renovable.

Grupo de edad	Porcentaje de la fuerza laboral
Sobre 35	22%
35-50	45%
Más de 50	33%

Percepción pública de la transformación de energía renovable

Una encuesta del Centro de Investigación Pew 2023 indica que el 79% de los estadounidenses apoyan la expansión de energía solar y eólica. AEP ha invertido $ 2.4 mil millones en infraestructura de energía limpia entre 2020-2023.

Comunicación comunitaria en iniciativas de energía limpia

La inversión comunitaria de AEP en programas de energía limpia totalizó $ 37.6 millones en 2023, apoyando a 42 proyectos locales de energía renovable y sostenibilidad en 11 estados.

Tipo de iniciativa	Número de proyectos	Inversión ($)
Proyectos de la comunidad solar	18	15,200,000
Programas de eficiencia energética	24	22,400,000

American Electric Power Company, Inc. (AEP) - Análisis de mortero: factores tecnológicos

Gestión de cuadrícula avanzada y tecnologías de cuadrícula inteligente

AEP ha invertido $ 1.2 mil millones en tecnologías de modernización de la red a partir de 2023. La compañía opera 221,000 millas de líneas de transmisión y distribución en 11 estados. Las inversiones de redes inteligentes han aumentado la confiabilidad de la red en un 35% en los últimos cinco años.

Categoría de tecnología	Monto de la inversión	Tasa de implementación
Infraestructura de medición avanzada	$ 385 millones	68% de cobertura
Sistemas de automatización de cuadrícula	$ 275 millones	Despliegue del 52%
Tecnologías de mantenimiento predictivo	$ 195 millones	Implementación del 47%

Aumento de la inversión en generación de energía renovable

AEP comprometió $ 8.9 mil millones a proyectos de energía renovable para 2026. La capacidad actual de generación renovable es de 3,365 MW, con energía eólica que representa 2,685 MW y una contabilidad solar por 680 MW.

Tipo de energía renovable	Capacidad actual	Inversión proyectada
Energía eólica	2.685 MW	$ 5.2 mil millones
Energía solar	680 MW	$ 2.7 mil millones

Inteligencia artificial y aprendizaje automático para la eficiencia energética

AEP ha implementado sistemas de gestión de energía impulsados ​​por la IA con inversión de $ 142 millones. Los algoritmos de aprendizaje automático han mejorado la precisión de la predicción de energía en un 42% y reducen los costos operativos en un 27%.

Tecnologías emergentes de almacenamiento y transmisión de baterías

AEP ha desarrollado 250 MW de capacidad de almacenamiento de batería con $ 315 millones asignados a tecnologías de almacenamiento de energía. Las actualizaciones de tecnología de transmisión han reducido la pérdida de energía en un 18% en toda la red.

Tecnología de almacenamiento	Capacidad actual	Inversión
Baterías de iones de litio	180 MW	$ 215 millones
Sistemas de batería de flujo	70 MW	$ 100 millones

American Electric Power Company, Inc. (AEP) - Análisis de mortero: factores legales

Cumplimiento de las regulaciones ambientales

AEP incurrió en $ 1.4 mil millones en gastos de cumplimiento ambiental en 2023. La compañía opera bajo la Ley de Aire Limpio, la Ley de Agua Limpia y los marcos regulatorios de la Ley de Conservación y Recuperación de Recursos.

Regulación	Costo de cumplimiento	Impacto anual
Acto de aire limpio	$ 687 millones	Reducción de 52.4 millones de toneladas de emisiones de CO2
Acto de agua limpia	$ 342 millones	Cumplimiento de la descarga de agua al 98.7%
Cumplimiento de RCRA	$ 371 millones	Optimización de gestión de residuos

Marcos regulatorios del mercado de energía federal y estatal

AEP opera bajo las regulaciones de FERC en 11 estados, con activos regulatorios por un total de $ 3.2 mil millones en 2023. Los marcos regulatorios a nivel estatal varían, impactando las operaciones de transmisión y distribución.

Cuerpo regulador	Jurisdicción	Impacto regulatorio
Ferc	Federal	Inversiones de transmisión de $ 1.8 mil millones
Comisiones estatales de servicios públicos	11 estados	Ajustes base de tasa de $ 1.4 mil millones

Desafíos legales potenciales relacionados con las emisiones de carbono

AEP enfrenta riesgos de litigio potenciales con $ 2.3 mil millones estimados en posibles exposiciones legales relacionadas con el carbono. Los compromisos actuales de reducción de carbono se dirigen al 80% de reducción para 2030.

Categoría de riesgo legal	Exposición estimada	Estrategia de mitigación
Litigio de emisión de carbono	$ 2.3 mil millones	Reducción de emisiones del 80% para 2030
Potencial de demanda ambiental	$ 456 millones	Medidas de cumplimiento proactivas

Requisitos reglamentarios para la integración de energía renovable

AEP ha comprometido $ 4.5 mil millones a la infraestructura de energía renovable, cumpliendo con los estándares de cartera renovable a nivel estatal en los territorios operativos.

Estándar renovable	Inversión	Capacidad renovable
Energía eólica	$ 2.1 mil millones	3,420 MW
Energía solar	$ 1.4 mil millones	1.280 MW
Almacenamiento de la batería	$ 1 mil millones	620 MWh

American Electric Power Company, Inc. (AEP) - Análisis de mortero: factores ambientales

Compromiso con los objetivos de reducción de emisiones de carbono

Objetivos de reducción de carbono: AEP comprometido a reducir las emisiones de carbono del 80% para 2030 desde los niveles de referencia de 2005.

Año	Objetivo de reducción de emisiones de carbono	Emisiones de año basal (millones de toneladas métricas)
2005	Base	146
2030	Reducción del 80%	29.2

Transición del carbón a fuentes de energía renovables

AEP planea retirar 8.5 gigavatios de capacidad de generación a carbón para 2030.

Fuente de energía	Porcentaje actual	Porcentaje proyectado de 2030
Carbón	42%	15%
Energía renovable	22%	50%

Inversiones en generación de energía eólica y solar

La inversión de energía renovable proyectada AEP de $ 8.7 mil millones entre 2022-2026.

Tipo de energía renovable	Capacidad actual (MW)	Capacidad planificada para 2030 (MW)
Energía eólica	2,089	5,200
Energía solar	537	3,000

Estrategias de adaptación del cambio climático para la infraestructura energética

AEP asignó $ 2.4 mil millones para resiliencia y modernización de la red en 2023.

Estrategia de adaptación de infraestructura	Monto de la inversión	Mejora de resiliencia esperada
Endurecimiento de la cuadrícula	$ 1.2 mil millones	35% mejoró la resistencia de la tormenta
Desarrollo de microrredes	$ 600 millones	12 nuevas ubicaciones de microrredes
Tecnologías de cuadrícula inteligente	$ 600 millones	20% mejoró la eficiencia energética

American Electric Power Company, Inc. (AEP) - PESTLE Analysis: Social factors

Public pressure for sustainability pushes AEP toward its net-zero carbon goal by 2045.

You are seeing a clear split between public and investor pressure for aggressive decarbonization and the political realities in AEP's service territories. AEP has set an accelerated, aspirational net-zero carbon emissions goal for 2045, moving it up from the previous 2050 target. But honestly, the path is getting rockier. Public pressure from environmental groups and investors remains high, still pushing for faster coal plant retirements and more renewable energy additions.

The challenge is that 10 of AEP's 11 states are politically conservative, which makes it hard to push through clean energy mandates that would discontinue burning coal and natural gas. The CEO has stated the company will defer to state policy, which signals a potential slowdown in the pace of emission reduction. Still, the company is committing capital to the transition, with over $7 billion earmarked for solar, wind, and storage projects in its updated capital plan.

Consumer groups are challenging rate increases, questioning why residential customers should pay for AI-driven load growth.

The massive surge in demand from data centers, largely driven by Artificial Intelligence (AI) and hyperscale cloud providers, is creating a social equity problem. AEP is seeing a load growth bonanza, but consumer organizations are rightly asking why residential customers should foot the bill for the necessary grid upgrades. In the first half of 2025 alone, power companies, including AEP, applied for a total of $29 billion in rate increases, a staggering 142% increase year-over-year.

For a concrete example, AEP Ohio filed a request in May 2025 for a distribution base rate increase, which would raise the average residential customer's monthly bill by roughly $3.95, or 2.14%, for 1,000 kWh usage. The company is working to mitigate this by implementing new mechanisms, like the dedicated tariff for data centers approved by the Public Utilities Commission of Ohio, which is designed to ensure these high-demand users (like the 5,000 MW of data center load expected in Central Ohio by 2030) contribute more directly to the infrastructure costs. The goal is to limit annual residential rate hikes to around 3.5% over the next five years, even with the new $72 billion capital plan.

Demographic shifts and economic development in service territories influence customer demand and revenue streams.

The most significant shift AEP is managing is the change in its customer mix, driven by a massive economic development boom in its service areas. This is a huge opportunity, but it shifts the risk profile. The company forecasts an impressive 8%-9% annual retail load growth from 2025 through 2027. This growth is almost entirely commercial and industrial (C&I), with C&I sales surging 12.3% year-over-year in the first quarter of 2025. Residential load is actually seeing declines, which is a key point to remember.

Here's the quick math on the customer mix shift:

Customer Segment	Approximate % of Total Retail Sales (2024/2025)	Projected % of Total Retail Sales (2027)
Commercial	34%	45%
Residential/Industrial	66%	55%

This growth is backed by signed agreements for 28 GW of new load by 2030, with data centers making up the lion's share at 13 GW. This means AEP is defintely becoming more reliant on a smaller number of very large, industrial customers.

Changing customer expectations require investment in energy efficiency and electric vehicle infrastructure.

Customers-both residential and commercial-expect more than just reliable power now; they want tools to manage their usage and infrastructure to support electrification. AEP is responding with significant investments in energy efficiency (EE) and electric vehicle (EV) infrastructure, which are core social expectations today.

The company's EE programs are delivering tangible results:

• 2024 EE Investment: Approximately $108 million
• Customer Energy Reduction (2024): Approximately 490,000 MWh
• EE Incentives Provided (2024): Approximately $70 million

On the EV front, AEP is pushing hard to support the projected 18.7 million EVs on U.S. roads by 2030. They offer residential customers rebate programs for charging infrastructure and EV-specific off-peak rates in jurisdictions like Virginia and Oklahoma. Plus, AEP is leading by example, committing to replace 100% of its own fleet of 2,300 cars and light-duty trucks with EV alternatives by 2030. It's a clean one-liner: customers want to plug in, and AEP is building the outlets.

Next Step: Strategy Team: Analyze the regulatory risk of the 3.5% annual residential rate hike target against the $72 billion capital plan by the end of the quarter.

American Electric Power Company, Inc. (AEP) - PESTLE Analysis: Technological factors

Unprecedented load growth from data centers with 28 gigawatts of contracted incremental load by 2030

The technological revolution, particularly the explosive growth of Artificial Intelligence (AI) and cloud computing, is driving an unprecedented surge in electricity demand from data centers, fundamentally reshaping American Electric Power Company, Inc.'s (AEP) operational and capital strategy. This is a massive opportunity, but it also creates immense pressure on grid infrastructure. AEP's commercial load growth, largely fueled by data center expansion, jumped +12.3% in the first quarter of 2025 alone.

The company is now planning for a future where its system peak demand is projected to reach 65 gigawatts (GW) by 2030, nearly double the current peak of 37 GW. To meet this, AEP has escalated its five-year capital plan to $72 billion, a 33% increase from the previous $54 billion plan. This capital is crucial for building the transmission and distribution infrastructure needed for this new load.

The sheer scale of demand is staggering. The company has secured 28 GW of large load contracts to be signed by 2030, with 22 GW specifically for data centers. That's a huge, defintely sticky revenue base.

Metric	Value (as of Q3 2025)	Implication
Five-Year Capital Plan (Through 2030)	$72 billion	Aggressive infrastructure build-out to support new load.
Contracted Load Additions (by 2030)	28 GW	A confirmed, massive increase in long-term demand.
Projected System Peak Demand (by 2030)	65 GW	Requires substantial new generation and transmission capacity.

Grid modernization uses Distribution Automation Circuit Reconfiguration (DACR) to improve reliability

To handle the increased load and maintain reliability, AEP is heavily investing in smart grid technology, which is a core component of its distribution modernization efforts. The key technology here is Distribution Automation Circuit Reconfiguration (DACR).

DACR uses advanced sensors and controls to automatically detect an outage, isolate the fault, and reroute power around the problem area, often restoring service within minutes. In July 2025, the Public Utilities Commission of Ohio (PUCO) approved AEP Ohio's plan to invest $350.7 million in these upgrades. This investment will add DACR technology to an additional 412 circuits across AEP Ohio's service territory.

This is a practical, immediate reliability improvement. Previous DACR installations have already prevented an estimated 41 million minutes of customer interruptions. With these additions, nearly half of AEP Ohio's 1,600 circuits will be equipped with DACR, creating a more resilient and self-healing grid.

AEP is investing in energy storage, including an agreement for up to 1 gigawatt of Bloom Energy fuel cells for large customers

The timeline mismatch between data center construction (months) and large-scale grid build-out (years) requires innovative, near-term solutions. AEP is using distributed energy resources (DERs) to bridge this gap and provide power quickly to its largest customers.

The company secured an agreement for up to 1 gigawatt (GW) of Bloom Energy solid oxide fuel cells. This is the largest utility fuel cell technology initiative in the nation, and it's a smart way to manage the immediate demand spike. These fuel cells are installed on the customer's site and are designed to not send energy back to the grid, which helps manage system stability.

The best part? These are customer-funded projects. All costs for the fuel cell projects are covered by the large customers, like data centers, under a special contract, which minimizes direct capital risk for AEP's general rate base. Separately, AEP's overall capital plan includes more than $7 billion for solar, wind, and storage projects, showing a broader commitment to energy storage and renewable integration.

Increased digitalization of the grid heightens the criticality of cybersecurity risk management

As AEP deploys smart grid technologies like DACR and integrates massive digital loads from data centers, the entire system becomes more interconnected and, consequently, more vulnerable to cyberattacks. Digitalization is a double-edged sword. The criticality of cybersecurity risk management has never been higher, especially in the utility sector, which is classified as critical infrastructure.

The risks are compounded by escalating geopolitical tensions and increasingly complex supply chains, which are identified as key drivers of cyber risk complexity in 2025. A successful attack could disrupt the operation of the DACR systems, compromise customer data, or even lead to widespread power outages-a major operational and financial risk. The company must dedicate significant operational expenditure to advanced technologies like Artificial Intelligence (AI) and machine learning (ML) for real-time threat detection and anomaly analysis to stay ahead of increasingly sophisticated threats.

• Threat: Sophisticated cyberattacks targeting operational technology (OT) systems like SCADA (Supervisory Control and Data Acquisition) used for grid control.
• Action: Implement adaptive risk management, focusing on cloud governance and securing critical third-party vendors who are integrated into the digital infrastructure.
• Risk: A widening skills gap in the cybersecurity field complicates the ability to effectively manage these complex risks.

American Electric Power Company, Inc. (AEP) - PESTLE Analysis: Legal factors

SEC Settlement and Accounting Controls

You need to be clear-eyed about the cost of past regulatory missteps, even as you look to the future. American Electric Power Company, Inc. (AEP) closed a significant chapter in January 2025 by agreeing to a settlement with the Securities and Exchange Commission (SEC).

The settlement, which involved a civil penalty of $19 million, resolved an investigation into AEP's relationship with Empowering Ohio's Economy, a 501(c)(4) social welfare organization, and issues with its internal accounting and disclosure controls.

The SEC order specifically noted that AEP employees directed contributions totaling $1.2 million from Empowering Ohio's Economy to other 501(c)(4) organizations associated with politicians, which AEP had allegedly misled investors about in a 2020 press release.

AEP neither admitted nor denied the findings, but the payment was fully accrued in the third quarter of 2024. This one-time cost is now behind the company, but the need for defintely tight governance remains paramount.

Data Center Tariff and Cost Recovery in Ohio

The legal landscape is actively shifting to support AEP's massive infrastructure buildout, especially for high-demand customers like data centers. The Public Utilities Commission of Ohio (PUCO) adopted AEP Ohio's 2024 Data Center Tariff (DCT) settlement on July 9, 2025.

This tariff is a critical mechanism for cost recovery, ensuring that the burden of grid upgrades needed for surging demand doesn't fall unfairly on residential and small business customers.

The core of the new rule is financial commitment: large new data center customers (those with a load of 25,000 kW or greater) are required to pay for a minimum of 85% of their subscribed energy, even if their actual usage is lower.

This 'skin in the game' approach is necessary because data center load in Central Ohio alone is expected to hit 5,000 MW by 2030, requiring significant, front-loaded transmission investment.

Timely Recovery of Infrastructure Costs

The ability to recover new investment costs through regulated rates is the lifeblood of a utility's financial health. AEP has a massive 5-year capital plan (2025-2029) of $54 billion, with a potential for an additional $10 billion, heavily weighted toward transmission and distribution.

Success here depends entirely on favorable state regulatory decisions and Federal Energy Regulatory Commission (FERC) approvals. The good news is that 2025 has seen several positive outcomes that support AEP's projected 6%-8% long-term earnings per share (EPS) growth.

Here's the quick math on key 2025 regulatory wins that enable cost recovery:

Regulatory Achievement (2025)	Jurisdiction/Entity	Financial Impact/Scope
Transmission Upgrades Award	PJM Interconnection	$1.7 billion in awarded transmission upgrades
Fuel Cost Recovery Approval	Public Service Company of Oklahoma	$554 million in approved fuel cost recovery
Annual Transmission Expense Recovery	Kentucky Power	Appeal secured recovery of $14 million annually
Large Load Tariffs Approved	Indiana, Kentucky, West Virginia	Enables cost recovery for serving new data center/industrial demand

Still, not every case is a win. For instance, AEP Texas received a reduced annual rate increase of $70 million after a settlement, and AEP faces uncertainty in West Virginia over the recovery of $321 million in ENEC costs.

Environmental Litigation Risks: Coal Ash and Nuclear Fuel

Legal risks tied to environmental compliance, particularly legacy issues, remain a consistent drag on the utility sector. For AEP, the main concerns revolve around the disposal and cleanup of coal ash and spent nuclear fuel.

The regulatory environment for coal ash (Coal Combustion Residuals or CCR) is tightening, driven by the EPA's focus on legacy impoundments-older, often unlined storage ponds.

A specific legal risk materialized in August 2025 when a federal judge in the U.S. District Court for the Southern District of Ohio upheld the EPA's 2022 decision against the James M. Gavin coal-fired power plant. This ruling denies the plant additional time to comply with 2015 requirements for safer coal ash storage, setting a precedent that compliance deadlines are firm.

Key ongoing litigation risks for AEP include:

• Managing the costs and liabilities associated with the Legacy CCR Surface Impoundment Rule.

• Litigation over whether the 2015 rules prohibit leaving coal ash in contact with groundwater.

• Uncertainty regarding federal oversight and storage costs for spent nuclear fuel.

American Electric Power Company, Inc. (AEP) - PESTLE Analysis: Environmental factors

The clear action here is to closely track the rate case outcomes in key states like Ohio and Texas. Finance: project the impact of a 10-basis-point change in financing cost on the new $72 billion capital plan by the end of the quarter. That's your defintely most important near-term risk.

AEP targets an 80% reduction in carbon dioxide emissions from 2005 levels by 2030.

American Electric Power Company, Inc. is executing a clear, aggressive decarbonization strategy, anchored by a goal to achieve net-zero carbon dioxide (CO2) emissions by 2045. The near-term milestone is an 80% reduction in Scope 1 greenhouse gas (GHG) emissions from the 2005 baseline by the year 2030. This is a crucial metric to watch, as the company has already achieved a 64% reduction between 2005 and 2024, demonstrating significant progress through coal plant retirements and conversions.

The company has retired or sold approximately 14,000 megawatts (MW) of coal-fueled generation since 2011, with plans to retire or convert an additional approximately 4,100 MW of coal generation by the end of 2028.

Plans include adding nearly 14,000 megawatts of regulated wind and solar capacity through 2033.

To meet the massive energy demands from new load customers-like data centers, which are driving a system peak demand projection of 65 gigawatts (GW) by 2030-AEP is aggressively expanding its regulated renewable portfolio.

The company plans to add nearly 14,000 megawatts of regulated wind and solar capacity through 2033, which will grow the renewable generation portfolio to approximately 50% of its total capacity by that year. This is a huge capital commitment, supported by the five-year, $72 billion capital plan announced in late 2025.

The capacity additions break down as follows, showing a strong preference for wind power in the short to medium term:

Renewable Capacity Addition	Planned Megawatts (MW) through 2033	Investment Focus
New Regulated Wind	Up to 8,982 MW	Leveraging large-scale projects like the North Central wind project (1,484 MW) in Oklahoma.
New Regulated Solar	Up to 7,470 MW (2024-2033)	Focus on regulated states; includes projects like Indiana Michigan Power's St. Joseph Solar Farm.
Regulated Renewables CapEx (2025-2028)	$9.4 billion	Portion of the larger $72 billion capital plan dedicated to regulated renewables.

Climate change increases the frequency of extreme weather, requiring significant storm-hardening investments.

The rising frequency and intensity of extreme weather events-hurricanes, wildfires, and icing events-directly translate into higher capital expenditure (CapEx) for grid resiliency, or storm-hardening.

A significant portion of the total $72 billion capital plan is dedicated to transmission and distribution (T&D) infrastructure, which directly addresses this environmental risk. For instance, nearly a quarter of the total plan, or $17 billion, is specifically dedicated to the distribution network for system enhancement programs.

Concrete resiliency actions include:

• AEP Texas's three-year resiliency plan, approved in April 2025, committing approximately $318 million of investments to harden distribution infrastructure.
• Replacing aging assets with newer equipment designed to withstand extreme weather.
• Targeted tree trimming and vegetation management to reduce outage minutes.
• Transmission upgrades, such as the $1.7 billion investment approved in early 2025, to improve reliability across the PJM footprint.

The company is working to replace its fleet of light-duty trucks with electric vehicles by 2030.

AEP is also addressing environmental impact beyond its generation fleet by electrifying its transportation assets. The company has a goal to fully transition its fleet of approximately 2,300 cars and light-duty trucks to electric vehicles (EVs) by 2030.

This light-duty transition is part of a broader strategy to electrify 40% of its entire on-road vehicle fleet, which currently totals nearly 8,000 vehicles. This move is not just an environmental win; it is projected to save the company an estimated $40 million in fuel costs over the vehicle lifespan, showing a clear financial return on an environmental action.