Akins appears on Fox Business’s ‘Opening Bell’ program

AEP CEO Nick Akins appeared May 6 on Fox Business’s “Opening Bell” program to discuss the state of the U.S. power grid and more.

Nick Akins, AEP chairman, president and chief executive officer, discussed the state of the U.S. power grid and more May 6 during a segment of the Fox Business “Opening Bell” program.

Following a brutal winter, which strained power systems across the country, lawmakers and utility industry experts are asking, “Just how reliable is the U.S. power grid?”

“We plan our system around the extremes — when people are trying to use electricity in extremely cold weather or extremely hot weather. That’s when the system has to be able to operate and operate very well,” Akins explained. “The polar vortex showed us that, during those periods, it was very important for us to make sure we are able to satisfy that demand, and it came very close as to whether we could do that or not.

“When you are thinking about the security of the grid and the resources that are supporting the grid, and those resources are changing dramatically, even over the next year or so, that’s really the issue.”

Akins said the transformation in the electric utility industry means the industry needs to spend $2 trillion over the next two decades just to refurbish the existing grid infrastructure. He said the industry is currently spending $90 billion a year to meet the needs of the transition.

“You’re not only changing from a technological standpoint, but the resources themselves are changing,” he said. “Shale gas is a perfect example, and so is distributed generation, solar, wind and so forth. You’ve got to have a system that will accommodate those types of resources, even though they may be intermittent, like solar and wind.”

Akins said AEP itself is spending about $4 billion a year in capital on infrastructure improvements versus building any new generation facilities. “The issue there,” he said, “is we want to make sure our transmission and distribution system is able to accommodate all those connected resources and the changes of those resources.” Akins added that AEP also is extremely focused on cybersecurity and the physical security of its systems.

Turning to investors and shareholders, Akins said AEP has told the market that it will grow at 4-to-6 percent per year over the next three years, and provide dividends commensurate with that earnings growth. He also noted that the company’s load growth continues to show glimmers of hope. “This is the second (consecutive) quarter that we’ve had consistent growth in our three sectors (industrial, commercial and residential) of the economy,” he said. “That is primarily being driven by shale gas activities in our region, which shows how energy plays a part.”

Concerning the continuing transition to deregulation in Ohio, Akins said that while the share of AEP’s regulated earnings may fall slightly, “that 4-to-6 percent is driven by the regulated investment, so the unregulated generation we have provides upside to that.”