---
title: "American Electric Power added $22 billion of spending and $5.2 billion of stock; CFO won't promise 24% again"
description: "American Electric Power added $22 billion of capital spending for $5.2 billion of new equity, 24% of the increase against an industry norm its own CFO puts at 30% to 40%. He would not promise the ratio survives the next addition."
publisher: "The Inference"
section: "Power"
published: 2026-10-29T13:09:21.756Z
modified: 2026-10-29T13:09:21.756Z
canonical: https://theinference.org/article/american-electric-power-added-22-billion-of-spending-and-5-2-billion-of-stock-cfo-won-t-promise-24-again
language: en
keywords: "American Electric Power, Utilities, Capital Spending, Data Centers, Earnings"
---

# American Electric Power added $22 billion of spending and $5.2 billion of stock; CFO won't promise 24% again

> American Electric Power added $22 billion of capital spending for $5.2 billion of new equity, 24% of the increase against an industry norm its own CFO puts at 30% to 40%. He would not promise the ratio survives the next addition.

[American Electric Power](https://theinference.org/markets/companies/american-electric-power), the Columbus, Ohio utility serving 5.6 million customers across 11 states, rolled out [a $100 billion five-year capital plan](https://www.aep.com/news/stories/view/12347/) on October 28 [2]. The quarrel on the [earnings call](https://finance.yahoo.com/markets/stocks/articles/aep-q3-2026-earnings-call-191032851.html) was about who pays for it.

## The CFO would not lock the 24% equity ratio

Chief Financial Officer Trevor Mihalik said [AEP added $22 billion of spending](https://theinference.org/markets/companies/american-electric-power) while raising equity funding by only $5.2 billion, so new shares cover 24% of the incremental build, against what he called an industry norm of 30% to 40% [1][3]. Ross Fowler of [Bank of America](https://theinference.org/markets/companies/bank-of-america) asked whether 24% is the right ratio for modeling capital above the $100 billion [1]. Mihalik said he would not "box ourselves in" by promising every future dollar of capital gets financed "at sub 25%" [1].

## The ratio leans on equity AEP has already sold

The 24% works because most of the selling is done: over $5 billion of equity forwards, contracts to deliver shares later at a set price; $2.5 billion of marketed growth equity across two years; and a $1 billion at-the-market program, which drips stock into the market, finished before the quarter closed [1].

About $55 billion of operating cash over five years covers more than half the plan, and funds-from-operations-to-debt, a credit-rating yardstick, runs at 14% to 15%, above the 13% downgrade threshold at [Moody's](https://theinference.org/markets/companies/moody-s) and S&P [1]. The build still outruns the cash. Capex exceeded operating cash flow in nine of the last twelve quarters, $13.4 billion spent against $7.7 billion generated over the four quarters through June [7].

*Chart: **AEP's capex has outrun its operating cash in nine of the last twelve quarters** Line chart of AEP quarterly capital spending versus operating cash flow, showing capex above cash flow in nine of twelve quarters*

*Quarterly capital expenditure vs cash from operations, USD billions, from AEP's SEC filings, Q3 2023 through Q2 2026. [7]*

## Holders get the raise, the share count waits

[Third-quarter operating earnings](https://www.rttnews.com/3704344/aep-announces-100-bln-five-year-capital-plan-raises-2026-earnings-outlook-update.aspx) were $2.23 a share against $1.80 a year earlier, on revenue up 13.7% [2][6]. The long-term growth target lifted to 9% to 11% a year for 2027 through 2031, riding rate base, the asset value utilities earn returns on, from $87 billion to $162 billion, with [contracted load](https://theinference.org/article/amazon-s-indiana-nuclear-deal-is-a-study-aep-s-69-gw-of-sold-load-is-the-story) at 84 gigawatts, 15 of them signed during the quarter [2]. The shares still closed down 1.2% [4].

The forwards mean AEP has already sold the stock; the delivery date is all that remains. Dividend growth, moderated to roughly 2% a year at the board's discretion, shows where the cash goes instead, in answer to JPMorgan analyst Jeremy Tonet [1].

*Chart: **New equity covers 24% of AEP's added capex, below the 30 to 40% norm its CFO cites** Bar chart comparing AEP's 24% equity share of added capex with the 30% and 40% industry norm bounds its CFO cited*

*New equity as a share of incremental capital: AEP's plan figure vs the 30% to 40% industry norm CFO Trevor Mihalik cited on the October 28, 2026, call. [1]*

## Texas transmission is where the 24% gets tested

The company's defense holds on credit: 35 of those 84 gigawatts sit under firm take-or-pay contracts, and roughly 90% of the utility investment recovers through reduced-lag mechanisms such as riders and trackers [1]. That covers the balance sheet. The share count is a separate ledger. The [prior plan stood at $78 billion](https://seekingalpha.com/news/4659363-aep-outlines-9-percentminus-11-percent-operating-eps-growth-for-2027minus-2031-backed-by-100b) [5]; ERCOT's data-center audit report lands on December 10, and Texas transmission beyond the current plan is where the 24% gets tested [5].

## Takeaway

AEP's $100 billion plan rests on operating cash and equity it has already sold; the CFO's refusal to lock the 24% equity ratio tells shareholders the next Texas-sized addition may dilute them more.

## Sources

1. [Motley Fool via Yahoo Finance, AEP Q3 2026 Earnings Call Transcript, 28 October 2026](https://finance.yahoo.com/markets/stocks/articles/aep-q3-2026-earnings-call-191032851.html)
2. [American Electric Power, AEP Reports Third-Quarter 2026 Earnings, Expands Capital Plan and Increases Growth Outlook, 28 October 2026](https://www.aep.com/news/stories/view/12347/)
3. [Bullished, AEP Adds $22 Billion To Its Plan With Only $5.2 Billion More Equity, And Won't Lock In That Ratio, 29 October 2026](https://www.bullished.co/aep-adds-22-billion-to-its-plan-with-only-5-2-billion-more-equity-and-wont-lock-in-that-e5ac8376/)
4. [Benzinga via MSN, American Electric Power CEO sees once-in-a-generation opportunity in electricity demand, 28 October 2026](https://www.msn.com/en-us/news/other/american-electric-power-ceo-sees-once-in-a-generation-opportunity-in-electricity-demand/ar-AA2ggLqg)
5. [Seeking Alpha, AEP outlines 9%-11% operating EPS growth for 2027-2031 backed by $100B 5-year capital plan, 28 October 2026](https://seekingalpha.com/news/4659363-aep-outlines-9-percentminus-11-percent-operating-eps-growth-for-2027minus-2031-backed-by-100b)
6. [RTTNews, AEP Announces $100 Bln Five-Year Capital Plan; Raises 2026 Earnings Outlook, 28 October 2026](https://www.rttnews.com/3704344/aep-announces-100-bln-five-year-capital-plan-raises-2026-earnings-outlook-update.aspx)
7. [American Electric Power, quarterly figures from its SEC filings, retrieved 29 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000004904)


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American Electric Power added $22 billion of spending and $5.2 billion of stock; CFO won't promise 24% again — The Inference. Canonical: https://theinference.org/article/american-electric-power-added-22-billion-of-spending-and-5-2-billion-of-stock-cfo-won-t-promise-24-again