Akins Appears on CNBC’s ‘Mad Money’ With Jim Cramer

Jim Cramer (left) discusses first-quarter financial results with AEP CEO Nick Akins on CNBC’s “Mad Money with Jim Cramer” program.

Nick Akins, AEP chairman, president and chief executive officer, appeared on CNBC’s “Mad Money with Jim Cramer” program April 26 and discussed AEP’s first-quarter financial results, the Wind Catcher renewable energy project and more with the show’s host, stock analyst Jim Cramer.

View the program.

Cramer noted that interest rates rose to three percent recently but the industrial sector picked up in AEP’s service territory. How did that happen?

“We’re seeing a really big turnaround here. For the first time since 2011, we’re seeing all of the sectors of our economy pick up, all of our companies are improving across the board in our 11-state jurisdiction and all of the customer classes (industrial, commercial and residential) are picking up, as well,” said Akins. “We have the lowest unemployment rate since 2000 and the GDP (gross domestic product) in our service territory is 3.3 percent versus the U.S., which is at 2.9 percent, so we’re seeing a broad gain here.”

Cramer also asked Akins what impact tax reform has had on the company, the industry and the economy.

“Tax reform has had an impact from an expansion standpoint and certainly with oil prices being higher, as well,” Akins noted. “You see the oil and gas sectors, primary metals, those kind of manufacturers are continuing to progress, and certainly tax reform helped them.”

Turning to Wind Catcher, Cramer asked for some “clarity” on how the project is progressing and what it would mean for customers and AEP.

“We’re hoping to get that clarity in the May/June time frame,” Akins said. “The four states that are involved — Louisiana, Texas, Arkansas and Oklahoma — are in the process of reviewing it, and if we get the approvals, it’s a $4.5 billion transaction. If you compare it against M&A (a merger and acquisition), for example, it’s $4.5 billion without a premium, so it’s a great opportunity for the company.

“This wind power project is the largest project in the United States — 2,000 megawatts of wind and a 51 percent capacity factor — which means the wind is blowing there much of the time,” he continued. “Certainly it helps from an economic standpoint to have the scope and scale, but also the resource itself is so prevelant in western Oklahoma.

“The commissions are making a lot of progress,” Akins added. “We have settlements in Louisiana, Arkansas and Oklahoma, so we’re moving along in the process and they see the value and the benefits, particularly the benefits of a hedge against natural gas prices.”

Moving on to deregulation, Cramer asked about the effect deregulation has had in AEP’s service territory. He said he gets a sense that it has meant a lot to industry groups in the region.

“Oh, it has. Certainly the mood of the country, but also the ability to expand and the capital being deployed. From a regulatory standpoint, it really has changed the nature of the optimism many of our customers have, and with that optimism comes growth. We’re the beneficiary of that,” Akins said. “In our territory, the central Ohio area is growing very quickly, and the oil and gas areas in Texas are growing, as well.  These are areas where you are seeing the deployment of technologies — both in oil and gas and in our Smart Cities project in Columbus. It has been very positive and has driven investment.”