Akins appears on CNBC-TV’s ‘Mad Money w/Jim Cramer’ program

AEP CEO Nick Akins discusses upcoming environmental challenges and more with Jim Cramer on CNBC’s “Mad Money” program.

Nick Akins, AEP chairman, president and chief executive officer, appeared on CNBC-TV’s “Mad Money w/Jim Cramer” program May 28 to discuss AEP’s transmission investment, the outlook for power prices, the company’s growth plan, pending regulations on coal plants and more.

Cramer opened the segment by asking Akins about upcoming (June 2) Environmental Protection Agency rules on carbon emissions and what effect that might have on the electric utility industry in general and, specifically, AEP.

“I think we made a clear case about what effect it could have in the future. After the mercury rules, it was clear that there were a lot more coal plants retired than was originally anticipated, so we’ve done a lot already from a greenhouse gas perspective,” Akins answered. “Since 2005, AEP alone has achieved a 21 percent reduction (in greenhouse gas emissions), so we’re making considerable progress.” AEP anticipates additional reductions as it retires approximately 6,600 megawatts of coal-fueled generation over the next few years.

“We’ve also talked a lot about the reliability of the grid,” he added. “When you retire this much generation, you have to be able to put transmission solutions in place and infrastructure development to make sure we continue to operate in a very credible fashion.”

Turning to this past winter and the “polar vortex,” Cramer noted that AEP did operate in a very reliable fashion under extremely difficult conditions and made a lot of money for its shareholders in the process.

“We were very fortunate during the polar vortex that our generation actually ran, so it was an opportunity for us to get ahead and in so doing, at the end of the quarter, we confirmed our 4-to-6 percent earnings growth, we continued to invest an additional $200 million in our transmission effort, we moved $60 million of operations and maintenance (O&M) expense from 2015 and 2016 into 2014, and we also raised (earnings) guidance,” Akins reported. “We also saw about a 3 percent increase in our load, so the economy seemed to improve dramatically, and that’s been confirmed in April.”

Akins added that in the “shale counties” in AEP’s service territory (where there is an abundant amount of shale gas activity), the industrial component of the economy grew at a whopping 30 percent. “We’re also seeing chemical manufacturing, as an outgrowth of that (shale activity) continue to improve, as well,” Akins said. “That’s what’s driving the growth.”

On the residential side, Akins also told Cramer that AEP is finally seeing an uptick in housing and customer counts, which could help improve that segment of the business in the coming months and years.