Akins Appears on ‘Mad Money’ with Jim Cramer

AEP CEO Nick Akins (left) discusses AEP’s growth strategy with Jim Cramer during a “Mad Money” segment Nov. 3.

Nick Akins, AEP chairman, president and chief executive officer, appeared on CNBC’s “Mad Money with Jim Cramer” program Nov. 3 and discussed third quarter earnings results and the company’s growth strategy for the future.

View the video.

Cramer noted that during AEP’s Nov. 1 meeting with analysts, the company reported that the “new” story of AEP — the premier regulated energy company — is around higher growth, higher dividends, more regulated and more certainty. He asked if all this was too good to be true.

“It’s not too good to be true,” Akins responded. “We’ve been in a several-year process of transforming this company to one that’s fully regulated so we can provide consistency, quality in earnings and, obviously, dividends, as well, to our shareholders. Reforming the business has really worked out for us and now we’re fully regulated and we’ve raised the growth profile going forward.

“We’re about long-term consistency for our shareholders, and that’s what they expect,” Akins continued. “We want to make sure the business focuses on that, and we have the added benefit of a huge transmission and infrastructure play that makes a lot of sense.”

“How can you assure growth at a time that is so uncertain in this country?” Cramer asked.

“Because we invest our capital — we have $17.3 billion in capital that we are going to be investing over the next three years in infrastructure — and we recover through the regulated framework, with a ROE (return on equity) associated with that, so we produce earnings from that perspective,” Akins answered.

Turning to renewables — specifically solar — Cramer wondered if the energy grid would collapse if rooftop solar became so affordable that everyone put solar panels — like shingles — on their houses.

“There’s a huge challenge associated with that because the more distributed generation you have, the more we need to be able to control it and manage the grid itself,” Akins said. “A part of the growth strategy at AEP is around infrastructure to support all of these renewable resources being added, so it’s not only the infrastructure of transmission and block-and-tackle-type investments, it’s also investment in terms of information flow, new systems and new technologies so these systems can be managed.”

Commenting on the upcoming presidential election, which features one candidate who is pro-coal and one who is essentially anti-coal, Akins said, “I think we are doing exactly what our customers expect us to do — moving toward a cleaner energy environment. No matter who’s elected, we’re a long-term business and we plan to be around for a long time. We manage between both parties all the time. As long as we’re staying focused on the customer and the expectations there, then we’ll be fine. We have a huge transition going on, and we’ll continue that transition toward cleaner energy.”