Financial Performance by the Numbers

AEP had a solid first quarter. We made almost $80 million more than we did during the first three months of last year. We also announced plans to add 16,595 megawatts of new renewable generation by 2030 for our operating company customers.

What Nick is saying: “Our solid earnings for the quarter reflect the continued investments we are making to enhance service for our customers and modernize the grid as we accelerate our transition to a clean energy future,” said Nick Akins, AEP chairman, president and chief executive officer.  

Things aren’t back to normal: Our load is down compared to this time last year and we expected this. The pandemic had just started and the first quarter of 2020 was, essentially, our last “normal” quarter before the impacts of the pandemic.

• Our load in the first quarter of 2021 shows that while customers are still spending a lot of time at home, they’re not spending as much as they were at the height of the pandemic.
• Industrial and commercial sales are still down. We expect to see improvement as the country continues to reopen and the economy recovers.

Why who uses the power matters: This impacts our earnings because we make more from residential sales than commercial or industrial.

Why we’re optimistic: We reaffirmed our 2021 operating earnings guidance range of $4.55 to $4.75 per share and our long-term operating earnings growth rate of 5 – 7%.

• The dip in industrial sales in the first quarter was due to the winter storm that affected multiple parts of the country. This was a one-time event that we don’t expect to impact our outlook for the rest of the year.
• The economy in our service territory will likely experience the full impact of the government’s additional stimulus in the coming months.

You can see the numbers here.

The other big story – renewables: AEP is planning to add up to 16,595 megawatts of new wind and solar generation to our fleet by 2030.

• Since the beginning of the year, we’ve been reviewing the fuel mix and future generation needs for each operating company (ex: if the power we’re providing to customers comes from solar, wind, coal or gas).
• Why we’re doing this: The decision to grow our renewable generating capacity was based on a review of the resource needs for each operating company. Grid Solutions worked with each of the operating companies to review their needs.
• The addition of new renewable generation will be gradual as we work with regulators in our states on approval for our plans. It will happen from 2021 to 2030.
• By 2030, just over half of our generating capacity will be renewables.
• The 16,595 MW of new renewable generation includes 8,566 MW we previously announced in November 2020 and the new renewable generation for SWEPCO that was announced during the last quarterly earnings call in March.

Why this matters: Our customers and investors have been clear that they want cleaner energy resources. We set new carbon dioxide (CO2) reduction targets, which we announced last quarter. Adding these new renewables will get us closer to those CO2 reduction goals.

What are the goals again?:

• An 80% reduction in CO2 emissions by 2030 from our 2000 baseline.
• We’re working to reach net zero emissions by 2050. AEP defines “net zero” to mean that we will offset any carbon emissions from our generation at that time.