American Electric Power Considers Asset Sales

(Reuters) – American Electric Power (AEP) is considering more asset sales to help fund its five-year $54 billion capital expenditure plan, which has jumped by 25% from the previous plan, company executives said on Wednesday.

AEP is also looking at cutting layers of management and various equity strategies to reduce costs and raise capital for its build-out plan, which includes $10 billion in transmission construction to accommodate new power demand from data centers and other large customers.

> "We have a lot of wood to chop yet around the company," AEP CEO Bill Furman said on a company earnings call. Furman declined to specify which parts of the company could be put up for sale.

The company finalized large wind and solar asset sales since 2023.

AEP expects 20 gigawatts of new load through 2029, driven primarily by data centers. This demand represents about a 60% increase from the company's current peak load.

AEP beat estimates for third-quarter profit on Wednesday, as higher electricity usage at data centers boosted demand from commercial customers.

U.S. power demand is poised to rise to record highs by the end of 2024, fueled by the growing demand for artificial intelligence data centers, according to U.S. Energy Information Administration data.

Columbus (WA:CLC), Ohio-based AEP reported a more than 10% increase in its commercial load – the amount of power used by customers at a given point – compared with last year and expects commercial load to grow an average of 20% annually over the next three years based on signed customer contracts.

Sales growth is rising more than it has since the late 1960s, the company noted.

Data centers could consume up to 9% of the total electricity generated in the United States by the end of the decade, depending on the pace of adoption of GenAI and other technologies, according to an Electric Power Research Institute analysis from May.

AEP forecasts 2025 operating earnings in the per-share range of $5.75 to $5.95, compared to a Wall Street estimate of $5.98 per share, according to data compiled by LSEG.

It reported operating earnings of $1.85 per share for the three months ended Sept. 30, exceeding analysts' average estimate of $1.80 per share.