--- title: "Amazon agrees to fund and buy power from 12 small reactors at AEP's retired Indiana coal plant" description: "AEP, X-energy and Amazon signed agreements on October 19 to study twelve small reactors at a retired Indiana coal plant, with Amazon paying the development bills and, if it is built, buying the output under a contract meant to cover the plant's full costs. AEP reports the morning of October 28; the thing to listen for on the call is how much of the build customers like Amazon are paying for." publisher: "The Inference" section: "Power" published: 2026-10-27T15:31:03.396Z modified: 2026-10-27T15:31:03.396Z canonical: https://theinference.org/article/amazon-agrees-to-fund-and-buy-power-from-12-small-reactors-at-aep-s-retired-indiana-coal-plant language: en keywords: "Nuclear, Amazon, Utilities, Data Centers, Energy" --- # Amazon agrees to fund and buy power from 12 small reactors at AEP's retired Indiana coal plant > AEP, X-energy and Amazon signed agreements on October 19 to study twelve small reactors at a retired Indiana coal plant, with Amazon paying the development bills and, if it is built, buying the output under a contract meant to cover the plant's full costs. AEP reports the morning of October 28; the thing to listen for on the call is how much of the build customers like Amazon are paying for. [American Electric Power](https://theinference.org/markets/companies/american-electric-power), one of the largest US electric utilities [2], [signed agreements on October 19](https://energy-oil-gas.com/news/aep-amazon-and-x-energy-explore-960-mw-nuclear-plant-in-indiana/) with the reactor developer [X-energy](https://theinference.org/markets/companies/x-energy) and [Amazon](https://theinference.org/markets/companies/amazon) to study a nuclear plant at the retired Breed coal station in Sullivan County, Indiana: twelve Xe-100 small modular reactors, 960 megawatts if every unit is built [1]. Amazon funds the development work now, milestone by milestone, and if the plant runs, it buys the power under [a long-term contract priced to cover the facility's full costs](https://tedmag.com/amazon-backs-960-mw-indiana-nuclear-plant/) [1]. New nuclear projects in the US have a history of cost overruns, which utilities have been wary of passing to their customers [1]. Amazon has offered to carry that risk on its own balance sheet, and that is the news. ## Amazon's contract moves the construction risk off Indiana ratepayers AEP chief executive Bill Fehrman says the agreements "will provide all necessary capital protections and financial safeguards" for customers of Indiana Michigan Power, the AEP utility that once ran Breed; Amazon vice president Josh Weissman says the companies will "pay our full costs without passing them to others" [1]. Amazon signed the White House Ratepayer Protection Pledge this year, and AEP plans to cut Indiana residential rates by $100 from 2027 on revenue from large customers [3]. The demand behind it is real: Indiana Michigan Power expects the state's peak load to more than double by 2030 as large customers connect [1]. ## AEP cannot fund this build from its own cash flow Amazon's money aside, AEP cannot fund this build from its own cash. [Capital spending has outrun operating cash in nine of the last twelve quarters](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000004904), a gap the company has filled by borrowing and selling shares [4][5]. *Chart: **Capex has outrun operating cash in nine of the last twelve quarters** AEP's quarterly capital spending compared with operating cash flow over twelve quarters* *AEP quarterly capital spending vs operating cash flow, US$ billions, as reported in its SEC filings; retrieved October 27, 2026. [5]* That gap is what the analysts are disagreeing about. BTIG, a brokerage, [upgraded AEP to Buy on October 20 with a $147 target](https://ortex.news/articles/195280/btig-upgrades-aep-to-buy-even-as-bears-pile-in-before-earnings), its bull case built on 24 gigawatts of new load secured by 2030 [6]. Even the bear case BTIG summarizes has the company's ratio of funds from operations to debt, a standard gauge of credit strength, at 13.2% against a 14–15% target range [6]. [Jefferies](https://theinference.org/markets/companies/jefferies), another brokerage, [trimmed its target to $146 on October 22](https://www.ad-hoc-news.de/boerse/news/corporate-news/jefferies-cuts-target-for-american-electric-power-stock-to-usd-146-00/70419199) [7]. Both camps assume the demand arrives. They differ on whether AEP can pay for the capacity to serve it without stretching its credit. This is also the second deal in a week in which a hyperscaler, a data-center operator such as Amazon or Google, has put its balance sheet behind AEP capacity: on October 14 the utility outlined [a $4 billion fuel-cell project backed by Google](https://finance.yahoo.com/energy/articles/does-american-electric-power-company-031436615.html) [2][7]. ## The bottleneck has moved from financing to delivery Nothing at Breed is committed: no final investment decision, no cost estimate, no schedule, and no small modular reactor has entered commercial operation in the United States [1]. What decides the Indiana study is whether the first Xe-100 units get built on time elsewhere, at the chemicals company Dow's Texas project, now in the final phases of the Nuclear Regulatory Commission's construction permit review, and at the Amazon-backed Cascade facility planned in Washington state [1][3]. [Amazon and X-energy are aiming at more than 5 gigawatts of new nuclear by 2039](https://theinference.org/article/amazon-bought-20-years-of-nuclear-power-the-day-pjm-s-backstop-auction-failed-to-open) [1]. AEP [reports third-quarter results before the open on October 28](https://www.tradingview.com/news/zacks:9b99031cd094b:0-american-electric-power-to-release-q3-earnings-here-s-what-to-expect/), with consensus near $2.04 a share after a miss last quarter [8]. Earnings will not settle the funding question. The figure to listen for is how much of the capital plan the chief financial officer attributes to customers like Amazon and [Google](https://theinference.org/markets/companies/alphabet). That structure, a hyperscaler's balance sheet standing behind a utility's site, license and operator, is the part other utilities can copy, and tomorrow's call is the first evidence of whether it is spreading. ## Takeaway Amazon has agreed to carry the development risk and buy the full output of a proposed 960 MW small-reactor plant at AEP's retired Breed coal site, leaving AEP with the site, license and operator role but not the construction bill. The model is two days from a test: AEP's October 28 call will show how much of its capital plan customers like Amazon and Google now pay for. ## Sources 1. [Energy, Oil & Gas magazine, "AEP, Amazon, and X-energy explore 960 MW nuclear plant in Indiana," 22 October 2026](https://energy-oil-gas.com/news/aep-amazon-and-x-energy-explore-960-mw-nuclear-plant-in-indiana/) 2. [Yahoo Finance (Simply Wall St), "What Does American Electric Power Company (AEP) Gain From Its 960 MW Nuclear Plan?," 24 October 2026](https://finance.yahoo.com/energy/articles/does-american-electric-power-company-031436615.html) 3. [tEDmag, "Amazon Backs 960-MW Indiana Nuclear Plant," 20 October 2026](https://tedmag.com/amazon-backs-960-mw-indiana-nuclear-plant/) 4. [24/7 Wall St., "AEP's Dividend Keeps Growing. But Can the Utility Afford Bigger Payouts?," 20 October 2026](https://247wallst.com/investing/2026/10/20/aeps-dividend-keeps-growing-but-can-the-utility-afford-bigger-payouts/) 5. [American Electric Power, quarterly figures from its SEC filings, retrieved 27 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000004904) 6. [ORTEX News, "BTIG upgrades AEP to Buy, even as bears pile in before earnings," 27 October 2026](https://ortex.news/articles/195280/btig-upgrades-aep-to-buy-even-as-bears-pile-in-before-earnings) 7. [ad-hoc-news.de, "Jefferies cuts target for American Electric Power stock to USD 146.00," 27 October 2026](https://www.ad-hoc-news.de/boerse/news/corporate-news/jefferies-cuts-target-for-american-electric-power-stock-to-usd-146-00/70419199) 8. [Zacks via TradingView, "American Electric Power to Release Q3 Earnings: Here's What to Expect," 27 October 2026](https://www.tradingview.com/news/zacks:9b99031cd094b:0-american-electric-power-to-release-q3-earnings-here-s-what-to-expect/) --- Amazon agrees to fund and buy power from 12 small reactors at AEP's retired Indiana coal plant — The Inference. Canonical: https://theinference.org/article/amazon-agrees-to-fund-and-buy-power-from-12-small-reactors-at-aep-s-retired-indiana-coal-plant