American Electric Power Company, Inc. (AEP): Analyse de Pestle [Jan-2025 Mise à jour]

Dans le paysage dynamique de la transformation de l'énergie, American Electric Power Company, Inc. (AEP) se dresse à un carrefour critique, naviguant des défis politiques, économiques et technologiques complexes qui définiront l'avenir de la production de pouvoir durable. Alors que le secteur des services publics subit une perturbation sans précédent, l'approche stratégique d'AEP en matière d'énergie renouvelable, de modernisation du réseau et de durabilité environnementale devient de plus en plus essentielle, offrant un récit convaincant d'adaptation et d'innovation à une époque de climat rapide et de changement technologique.

American Electric Power Company, Inc. (AEP) - Analyse du pilon: facteurs politiques

Politiques énergétiques fédérales influençant la transition des énergies renouvelables

La loi sur la réduction de l'inflation de 2022 fournit 369 milliards de dollars pour les investissements en énergie propre, ce qui concerne directement la stratégie renouvelable d'AEP. Le crédit d'impôt de production (PTC) offre 0,027 $ par kilowattheure pour la production d'énergie éolienne.

Politique fédérale	Impact financier	Année
Loi sur la réduction de l'inflation	369 milliards de dollars d'investissement en énergie propre	2022-2032
Crédit d'impôt de production	0,027 $ / kWh pour l'énergie éolienne	2024

Environnements réglementaires au niveau de l'État affectant la production d'électricité

L'AEP opère dans 11 États avec différentes normes de portefeuille renouvelables.

État	Norme de portefeuille renouvelable	Année cible
Ohio	12,5% d'énergie renouvelable	2027
Texas	Capacité installée de 10 000 MW	2025

Incitations du gouvernement pour les infrastructures d'énergie propre

• Crédit d'impôt d'investissement (ITC) de 30% pour les projets solaires
• Les prêts du ministère de l'énergie garantissent jusqu'à 300 millions de dollars pour la modernisation du réseau
• Subventions au niveau de l'État pour l'infrastructure de stockage d'énergie

Soutien politique aux initiatives de décarbonisation

Objectif de l'administration Biden: 100% d'électricité sans carbone d'ici 2035.

Cible de décarbonisation	Pourcentage	Année cible
Électricité sans carbone	100%	2035
Génération renouvelable actuelle d'AEP	33%	2023

American Electric Power Company, Inc. (AEP) - Analyse du pilon: facteurs économiques

Les prix des produits d'énergie fluctuants ont un impact sur les coûts opérationnels

Les coûts opérationnels de l'AEP sont considérablement influencés par la volatilité des prix des matières premières énergétiques. En 2024, les prix du gaz naturel étaient en moyenne de 3,45 $ par million de BTU, tandis que les prix du charbon variaient entre 40 $ et 60 $ par tonne courte. Les coûts d'approvisionnement en carburant de l'entreprise ont un impact direct sur les dépenses de production d'électricité.

Marchandise énergétique	2024 Prix moyen	Changement d'une année à l'autre
Gaz naturel	3,45 $ / MMBTU	-12.3%
Charbon	52 $ / tonne courte	-5.5%
Coût de la production d'électricité	0,068 $ / kWh	+2.1%

Investissement dans la modernisation et les infrastructures du réseau

AEP a alloué 3,8 milliards de dollars pour la modernisation du réseau et les améliorations des infrastructures en 2024. La rupture des dépenses en capital comprend:

• Infrastructure de transmission: 1,9 milliard de dollars
• Mises à niveau du système de distribution: 1,2 milliard de dollars
• Intégration d'énergie renouvelable: 700 millions de dollars

Défis économiques des mécanismes potentiels de tarification du carbone

Les prix potentiels du carbone pourraient imposer des défis économiques importants. Impact estimé des prix du carbone sur les opérations d'AEP:

Scénario de tarification du carbone	Coût annuel estimé	Impact potentiel des revenus
Prix ​​bas en carbone (20 $ / tonne)	280 millions de dollars	-3,2% de revenus
Prix ​​moyen en carbone (50 $ / tonne)	620 millions de dollars	-6,7% de revenus
Prix ​​élevé en carbone (100 $ / tonne)	1,2 milliard de dollars	-12,5% de revenus

Variations économiques régionales affectant la demande d'électricité

L'AEP opère dans 11 États avec des conditions économiques variables. Variations de la demande d'électricité par région en 2024:

État	Demande d'électricité	Taux de croissance économique
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) - Analyse du pilon: facteurs sociaux

Demande croissante des consommateurs de solutions énergétiques durables

Selon l'US Energy Information Administration, la consommation d'énergies renouvelables aux États-Unis a atteint 12,2% en 2022. Le portefeuille d'énergie renouvelable d'AEP comprend 7 283 MW de capacité éolienne et solaire en 2023.

Type d'énergie renouvelable	Capacité (MW)	Pourcentage de portefeuille
Énergie éolienne	5,745	78.9%
Énergie solaire	1,538	21.1%

Changements démographiques de la main-d'œuvre dans le secteur des services publics

L'âge médian des travailleurs du secteur des services publics est de 43,5 ans, avec 25% de la main-d'œuvre qui devrait prendre sa retraite d'ici 2025. L'AEP emploie 17 161 travailleurs en 2023, en mettant l'accent sur le recrutement de talents plus jeunes dans la technologie et les rôles d'énergie renouvelable.

Groupe d'âge	Pourcentage de la main-d'œuvre
Moins de 35 ans	22%
35-50	45%
Plus de 50	33%

Perception du public de la transformation des énergies renouvelables

Une enquête en 2023 Pew Research Center indique que 79% des Américains soutiennent l'expansion de l'énergie solaire et éolienne. AEP a investi 2,4 milliards de dollars dans des infrastructures d'énergie propre entre 2020-2023.

Engagement communautaire dans les initiatives d'énergie propre

L'investissement communautaire d'AEP dans des programmes d'énergie propre a totalisé 37,6 millions de dollars en 2023, soutenant 42 projets locaux d'énergie renouvelable et de durabilité dans 11 États.

Type d'initiative	Nombre de projets	Investissement ($)
Projets de la communauté solaire	18	15,200,000
Programmes d'efficacité énergétique	24	22,400,000

American Electric Power Company, Inc. (AEP) - Analyse du pilon: facteurs technologiques

Gestion avancée de la grille et technologies de grille intelligentes

AEP a investi 1,2 milliard de dollars dans les technologies de modernisation du réseau à partir de 2023. La société exploite 221 000 miles de lignes de transmission et de distribution dans 11 États. Les investissements intelligents du réseau ont augmenté la fiabilité du réseau de 35% au cours des cinq dernières années.

Catégorie de technologie	Montant d'investissement	Taux de mise en œuvre
Infrastructure de mesure avancée	385 millions de dollars	Couverture de 68%
Systèmes d'automatisation du réseau	275 millions de dollars	Déploiement de 52%
Technologies de maintenance prédictive	195 millions de dollars	47% de mise en œuvre

Augmentation des investissements dans la production d'énergie renouvelable

L'AEP a engagé 8,9 milliards de dollars dans des projets d'énergie renouvelable d'ici 2026. La capacité actuelle de la production renouvelable s'élève à 3 365 MW, avec une énergie éolienne représentant 2 685 MW et l'énergie solaire représentant 680 MW.

Type d'énergie renouvelable	Capacité actuelle	Investissement projeté
Énergie éolienne	2 685 MW	5,2 milliards de dollars
Énergie solaire	680 MW	2,7 milliards de dollars

Intelligence artificielle et apprentissage automatique pour l'efficacité énergétique

L'AEP a mis en œuvre des systèmes de gestion de l'énergie axés sur l'IA avec des investissements de 142 millions de dollars. Les algorithmes d'apprentissage automatique ont amélioré la précision de la prédiction énergétique de 42% et réduit les coûts opérationnels de 27%.

Technologies émergentes de stockage de batteries et de transmission

AEP a développé 250 MW de capacité de stockage de batteries avec 315 millions de dollars alloués aux technologies de stockage d'énergie. Les mises à niveau de la technologie de transmission ont réduit la perte d'énergie de 18% sur le réseau.

Technologie de stockage	Capacité actuelle	Investissement
Batteries au lithium-ion	180 MW	215 millions de dollars
Systèmes de batterie de flux	70 MW	100 millions de dollars

American Electric Power Company, Inc. (AEP) - Analyse du pilon: facteurs juridiques

Conformité aux réglementations environnementales

L'AEP a engagé 1,4 milliard de dollars en dépenses de conformité environnementale en 2023. La société opère en vertu de la Clean Air Act, Clean Water Act et des Cadres réglementaires de la Loi sur la conservation et la récupération des ressources.

Règlement	Coût de conformité	Impact annuel
Clean Air Act	687 millions de dollars	Réduction de 52,4 millions de tonnes d'émissions de CO2
Clean Water Act	342 millions de dollars	Conformité à la décharge d'eau à 98,7%
Conformité RCRA	371 millions de dollars	Optimisation de la gestion des déchets

Cadres réglementaires du marché de l'énergie fédéral et étatique

L'AEP opère en vertu de la réglementation de la FERC dans 11 États, les actifs réglementaires totalisant 3,2 milliards de dollars en 2023. Les cadres réglementaires au niveau de l'État varient, ce qui a un impact sur les opérations de transmission et de distribution.

Corps réglementaire	Juridiction	Impact réglementaire
Ferc	Fédéral	Investissements en transmission de 1,8 milliard de dollars
Commissions des services publics publics	11 États	Ajustements de base de taux de 1,4 milliard de dollars

Défis juridiques potentiels liés aux émissions de carbone

L'AEP fait face à des risques potentiels en matière de litige avec 2,3 milliards de dollars en expositions juridiques potentielles liées au carbone. Les engagements de réduction du carbone actuels ciblent une réduction de 80% d'ici 2030.

Catégorie de risque juridique	Exposition estimée	Stratégie d'atténuation
Litige en émission de carbone	2,3 milliards de dollars	Réduction des émissions à 80% d'ici 2030
Potentiel de procès environnemental	456 millions de dollars	Mesures de conformité proactive

Exigences réglementaires pour l'intégration des énergies renouvelables

AEP a engagé 4,5 milliards de dollars dans les infrastructures d'énergie renouvelable, répondant aux normes de portefeuille renouvelables au niveau de l'État dans les territoires opérationnels.

Norme renouvelable	Investissement	Capacité renouvelable
Énergie éolienne	2,1 milliards de dollars	3 420 MW
Énergie solaire	1,4 milliard de dollars	1 280 MW
Stockage de batterie	1 milliard de dollars	620 MWH

American Electric Power Company, Inc. (AEP) - Analyse du pilon: facteurs environnementaux

Engagement envers les cibles de réduction des émissions de carbone

Objectifs de réduction du carbone: L'AEP s'est engagée à réduire les émissions de carbone de 80% d'ici 2030 à partir des niveaux de référence 2005.

Année	Cible de réduction des émissions de carbone	Émissions de l'année de référence (millions de tonnes métriques)
2005	Base de base	146
2030	Réduction de 80%	29.2

Passer du charbon aux sources d'énergie renouvelables

AEP prévoit de prendre sa retraite 8,5 gigawatts de capacité de production de charbon d'ici 2030.

Source d'énergie	Pourcentage actuel	Pourcentage de 2030 projeté
Charbon	42%	15%
Énergie renouvelable	22%	50%

Investissements dans la production d'énergie éolienne et solaire

AEP a prévu un investissement en énergies renouvelables de 8,7 milliards de dollars entre 2022-2026.

Type d'énergie renouvelable	Capacité actuelle (MW)	Capacité planifiée d'ici 2030 (MW)
Énergie éolienne	2,089	5,200
Énergie solaire	537	3,000

Stratégies d'adaptation du changement climatique pour les infrastructures énergétiques

AEP a alloué 2,4 milliards de dollars pour la résilience et la modernisation du réseau en 2023.

Stratégie d'adaptation des infrastructures	Montant d'investissement	Amélioration de la résilience attendue
Durcissement d'une grille	1,2 milliard de dollars	35% Amélioration de la résistance aux tempêtes
Développement des microréseaux	600 millions de dollars	12 nouveaux emplacements de microrésence
Technologies de grille intelligente	600 millions de dollars	20% amélioré l'efficacité énergétique

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.