Skip to content

Akins appears on CNBC-TV’s ‘Mad Money’ program

by on February 21, 2013

AEP President and CEO Nick Akins appeared on CNBC-TV’s “Mad Money w/Jim Cramer” Feb. 19 to discuss the company’s recent earnings report, AEP’s decision to increase its dividend payout, the shale gas revolution, looming environmental regulations and more.

View the video of this “Mad Money” segment.

AEP President and CEO Nick Akins appeared on CNBC-TV’s “Mad Money w/Jim Cramer” Feb. 19.

“AEP reported last Friday (Feb. 15) that between now and 2020, they’re going to have to spend $4 billion to $5 billion upgrading its coal plants to keep up with the new and existing regulations,” said Jim Cramer, host of Mad Money. “Though as of late, it’s learned that ratepayers can’t bear it — that’s a big reason why it’s moving toward using less coal. So let’s check in Nick Akins. He’s the CEO…Nick, I’ll tell you, this was the most upbeat I’ve ever heard you. You have increased your dividend rate that you want to give, you’ve solidified a 4 percent to 6 percent growth rate. Why is everything breaking your way right now?”

“Oh, I think we spent 2012 clearing the decks of a lot of risk in the corporation,” Akins answered. “The Ohio situation we talked about earlier, certainly getting some of the power plant activity done, but also we’re seeing the economy start to stabilize somewhat, so we’re hopeful it will really pick up during ’13.”

“Is that one of the reasons you took the extraordinary step of increasing the payout, now 60 percent to 70 percent?” Cramer asked. “Already you’ve been a terrific payer of dividends.”

“Oh, yeah, we raised that dividend range because we felt like we’re going to be a regulated utility in the future and the regulated earnings produces that benefit going forward,” Akins replied, “so we really believe we’re working well in that regulated space.”

Turning toward the shale gas revolution that is sweeping the nation and causing a ‘re-renaissance’ in the oil and natural gas industry, Akins noted that AEP’s service territory is well-positioned to capitalize on the lower price of that fuel.

“We’re seeing the Eagleford Shale in Texas really take off — great growth there —  as well as the Utica Shale in Ohio,” Akins noted. “As a matter of fact, that’s been our saving grace in this period where the industrials, particularly on the primary metals side, have been challenged, so if there’s going to be a renaissance of energy, our service territory is well-positioned to take advantage of it.”

Concerning the possibility of new, stricter environmental regulations, which could dramatically increase the price of electricity and negatively impact customers, Akins told Cramer that, “As you said earlier, we’re spending between $4 billion to $5 billion on environmental retrofitting. If they (the EPA) add greenhouse gas emissions on top of that during this time when the states are already dealing with the cost increases associated with those projects, that’s a highly regressive increase in pricing.

“As you know,” he continued, “electric utility supply is highly regressive when you have price increases, and the poor and middle class will feel the effects. It’s important to get that transition right and make sure we are advancing in a positive fashion on a path that doesn’t impair the economy and doesn’t inordinately increase the prices for customers.”

From → AEP In The News

Leave a Comment

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: