Akins, Tierney discuss AEP’s first quarter results on national business programs
|AEP CEO Nick Akins (right) appeared on CNBC’s “Closing Bell” program April 23.|
Nick Akins, AEP chairman, president and chief executive officer, appeared on CNBC’s “Closing Bell” news program April 23 and Brian Tierney, AEP’s executive vice president and chief financial officer, was on Bloomberg Radio to discuss the company’s first quarter financial results, the impact an interest rate hike would have on the industry, EPA regulations and more.
When asked about the cold winter weather boosting AEP’s first quarter revenues, Akins quipped, “The electric utility industry, we’re an odd bunch. We like the cold weather and we like the extreme heat, as well. The cold weather certainly contributed to the first quarter, there’s no question about it.”
Tierney expanded on the company’s strong quarter, telling Bloomberg Radio that: “All of our business segments were up for the quarter. In our regulated properties, we executed on our rate and investment plans, we exercised some of the cost discipline we have been talking about for years and benefited from colder weather. In our competitive businesses, we took advantage of the opportunities that were out there, from either the weather or the marketplace, and added to results from there, beating last year’s results by six cents on the competitive side. So all our businesses performed well and we’re off to a great start in 2015.”
Would the potential for rising interest rates this year dampen the spirits of the utility industry?
“There’s always concern about that, but the way Janet Yellen (chair of the Board of Governors of the Federal Reserve System) has been dealing with the interest rate issue, some of that may already be priced in, so we’ll see what the ultimate effect really is,” said Akins. “There’s nothing much we can do about interest rates other than with the borrowing and insuring we do, and we’ll continue to do that wisely.
“So we’ll continue with the emphasis we have on investing in transmission, our regulated companies, infrastructure and wires to make sure we improve customer service. That’s what we’re about,” Akins added.
Turning to Environmental Protection Agency compliance, Akins expressed concern about the tight timeline proposed in the agency’s Clean Power Plan and Tierney discussed the company’s generation retirement plan with Bloomberg Radio.
“The industry and AEP are concerned about the 2020 target that was set out in the proposed rules by the EPA,” said Akins. “2030 is much more reasonable, but 2020, the states have to be able to look at their own resources, and then you have to have time to construct additional resources as a result. So that’s going to take some time and we need to make sure the EPA ultimately, in the final rule, observes that kind of requirement for infrastructure buildout and the state processes for approval.”
“There are a number of environmental regulations that go into effect at the end of May this year,” Tierney said. “In response to those, we are retiring about 5,500 megawatts of capacity, and it’s taken us years to get ready with transmission additions and other environmental controls we put on our other power plants to get ready for that event that’s going to happen at the end of next month.”