Dive Brief:

• Nick Akins, CEO of American Electric Power (AEP), says it is "unfathomable" that the U.S. is so close to defaulting on its debt. Congress faces a deadline on Thursday, October 17, which is when the government's borrowing authority expires.
• “This industry spends over $90 billion a year” and is very sensitive to the cost of credit, Akins told Bloomberg Television’s "Street Smart" program. A default could significantly raise the cost of capital.

Dive Insight: 

AEP's capital structure is 55.2% debt and 44.8% equity, according to Morningstar. AEP's debt totals $19.2 billion and, like most investor-owned utilities, it enjoys a solid credit rating that lets it borrow money at favorable rates for upgrades to its transmission grid and to build new generation. A spike in interest rates caused by a U.S. default would be harmful, Akins said, stressing that large industries need "stability."