AEP's $100 billion plan serves 84 GW of signed load, with no equity number for the other $78 billion
The biggest US transmission owner has 84 GW of AI-era demand signed in take-or-pay contracts, and a $100 billion plan that leans on faster ratepayer recovery rather than an equity number. This week, Texas, the US Senate and Oklahoma opened the fight over who pays.
Richard Tangthree-minute read
American Electric Power−0.45% — American Electric Power, down 0.45 percent as of its last quote, the utility that owns the nation's largest electric transmission system, put the slides behind its $100 billion, 2027-2031 capital plan in front of investors on November 8 12. The plan rests on 84 gigawatts of load contracted to arrive by 2031, in firm take-or-pay agreements where the customer pays whether or not it draws the power 34. Demand is no longer the constraint; financing and political permission are, and both moved this week.
The load is signed, the money is not
Contracted load rose from 69 GW to 84 GW in a single quarter, led by a 10.4-gigawatt campus in Piketon, Ohio, planned by SB Energy, an affiliate of Japan's SoftBank 4. AEP raised the plan from $78 billion to $100 billion to serve it 4.
Rate base, the assets AEP earns a regulated return on, is guided to compound at more than 13 percent a year, and operating earnings to grow 9 to 11 percent 3. The hardware is the scarce part: Tyler Page, chief executive of power-plant developer Cipher Digital−1.91% — Cipher Digital, down 1.91 percent today, said on his earnings call, "There just aren't enough turbines and reciprocating engines in the world" 5.
No equity number covers $78 billion of the plan
The financing is thinner. AEP said it would fund its latest addition, the $22 billion we covered on October 29, with about 24 percent equity 4. No equity number covers the remaining $78 billion of the plan 2.
Peers have sized theirs: Ameren−0.30% — Ameren, down 0.30 percent today, the Missouri and Illinois utility, expects about $5 billion of equity for its $38.1 billion plan, and WEC Energy Group−0.12% — WEC Energy Group, down 0.12 percent today, a utility holding company with its own expanded capital plan, signed banks to sell up to $4 billion of stock 67. AEP's slides instead lean on customer affordability offsets and reduced-lag recovery, collecting from ratepayers with less regulatory delay 2.
AEP's building program has outrun its operating cash
Quarterly capex has pulled away from operating cash just as the $100B plan begins
- Capex
- Operating cash flow
Data
| Capex | Operating cash flow | |
|---|---|---|
| Q4 '23 | $1.61B | $1.34B |
| Q1 '24 | $1.76B | $1.44B |
| Q2 '24 | $1.56B | $1.46B |
| Q3 '24 | $1.85B | $2.17B |
| Q4 '24 | $2.86B | $1.73B |
| Q1 '25 | $2.1B | $1.45B |
| Q2 '25 | $3.28B | $1.22B |
| Q3 '25 | $2.28B | $2.46B |
| Q4 '25 | $4.25B | $1.81B |
| Q1 '26 | $3.8B | $1.52B |
| Q2 '26 | $3.13B | $1.9B |
| Q3 '26 | $4.58B | $2.35B |
The backlash decides who pays
Six days after AEP expanded the plan, voters pushed back. They approved restrictions or moratoriums on 44 of 45 data-center ballot measures where vote counting is complete 8, and Texas Governor-elect Gina Hinojosa, who takes office in January, wants new data centers halted until the legislature writes community protections 9.
The Senate bill and the Oklahoma hearing test who pays
President Trump urged senators on Sunday to make data centers "build and pay for their own electricity," and the Senate voted 73-25 on Monday to open debate on a bill requiring large data centers to cover more of the grid costs they cause 510. The bill still needs House passage before the new Congress convenes on January 3 810.
Oklahoma's Corporation Commission took public comment Monday on the west section of AEP's 100-mile transmission line, with a formal hearing Friday 11.
The model politicians demand is already inside the plan
The model politicians demand already runs inside the plan: AEP expects up to $21 billion of fixed-cost offsets to reach residential customers from those contracts 3, and SoftBank and its affiliates are funding the roughly $5 billion transmission spine for the Ohio campus 4, the customer paying for its own wires.
What to watch: Friday's Oklahoma hearing, whether the Senate bill passes before January 3, and whether AEP puts an equity number on the remaining $78 billion.
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