- American Electric Power has announced a capital spending program targeting $13 billion in investments from 2016 to 2018, with the vast majority aimed at its regulated businesses.
- The company forecast its 2016 investment at $5 billion, and 2017 and 2018 capital investment budgets at $4 billion annually.
- About 96% will be spent on the company's regulated businesses, and more than $9 billion of the total will be spent on AEP's wires businesses.
AEP, which serves 5.4 million customers through 222,000 miles of distribution lines, announced last week a major initiative aimed at modernizing and reinforcing that system.
"Transmission investment opportunities continue to grow as we rebuild and enhance aging infrastructure and create a grid that is more robust, resilient and able to support current and future generation changes," AEP Chairman, President and CEO Nicholas Akins said in a statement.
AEP said it intends to invest at least $5.7 billion in its transmission businesses over the next three years through AEP Transmission Holding Co. and AEP’s regulated utility operating companies.
Akins added that the company's ability to invest in its regulated operations has bolstered confidence in its 4% to 6% predicted earnings growth rate.
“After completing more than a decade of investments to dramatically cut emissions from our power plants, we’ve refocused our investments on other infrastructure that will support new ways of providing more reliable and cleaner electricity,” Akins said.
Platts reports that AEP will add more than 5,500 MW of wind and almost 3,000 MW of solar, with the bulk of that generation expected online by 2025. AEP will also grow the role of gas on its system, bringing on almost 3,000 MW from 2020 to 2027.