AEP Unveils $100 Billion Capital Plan and New 9% to 11% Earnings Growth Target

American Electric Power unveiled a $100 billion five-year capital plan on Wednesday and introduced a new long-term earnings growth target, citing accelerating electricity demand across its service territory.

The Columbus, Ohio-based utility also said it expects 2026 operating earnings to land at or above the high end of its $6.25 to $6.55 per-share guidance range, according to the earnings release it filed with an 8-K on Wednesday.

Third-quarter profit climbs

Third-quarter GAAP earnings rose to $1.187 billion, or $2.18 a share, from $972 million, or $1.82 a share, a year earlier. Operating earnings, AEP's non-GAAP measure, increased to $1.216 billion, or $2.23 a share, from $963 million, or $1.80.

Revenue grew to $6.832 billion from $6.011 billion. Operating earnings at the Vertically Integrated Utilities segment rose to $721 million from $573 million, the largest increase among AEP's segments, while Generation & Marketing roughly doubled to $101 million from $49 million.

A bigger plan and a higher growth rate

AEP introduced a target for operating earnings per share to grow 9% to 11% a year from 2027 through 2031, with a compound annual growth rate above 10% through 2031 measured from the original 2026 guidance midpoint of $6.30. It issued operating earnings guidance of $6.75 to $7.05 a share for 2027 and $7.40 to $7.70 for 2028.

The capital plan is expected to support rate base growth of more than 13% a year, lifting rate base to $162 billion by 2031. The spending breaks down roughly as follows:

• About $37 billion for transmission, with the transmission rate base expected to approach $70 billion by 2031
• $36 billion for generation, which the company said is backed by long-term customer contracts
• About $22 billion for distribution

"AEP is entering our next phase of growth from a position of strength," Chairman, President and CEO Bill Fehrman said in the release.

Load commitments keep stacking up

AEP said it signed 15 gigawatts of new load commitments during the third quarter, bringing expected incremental contracted load to 84 gigawatts by 2031. The company counts only projects backed by fully executed electric service agreements or letters of agreement.

The affordability pitch

The company also addressed customer bills. It now expects take-or-pay agreements with large customers in its vertically integrated states to generate up to $21 billion in fixed cost offsets for existing residential customers over the life of the contracts, up from $16 billion.

"AEP is committed to having new large-load customers bear the incremental system costs they create and fund the investments required to serve them," Fehrman said. AEP pointed to a second proposed rate reduction in Indiana as an example of load growth benefiting customers.

AEP scheduled a webcast with analysts for 9 a.m. ET on Wednesday.

Sources

1. American Electric Power Form 8-K with third-quarter 2026 earnings release (Exhibit 99), filed Oct. 28, 2026 (accession 0000004904-26-000069)

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