Jacobs lands AEP's $37 billion transmission program, and seven states' ratepayers fund the wires
One day after AEP expanded its capital plan to $100 billion, the utility named Jacobs to deliver the $37 billion transmission program across seven states, the first named contractor on the new plan. Jacobs collects delivery fees either way; the wires are paid for through the rates of the states they cross.
Vincent Jiang · 4 min read
One day after American Electric Power+0.63% — American Electric Power, up 0.63 percent today lifted its five-year capital plan to $100 billion, the Columbus, Ohio utility that owns the nation's largest electric transmission system gave the plan's biggest piece a name. Jacobs+1.22% — Jacobs, up 1.22 percent today, a Dallas-based engineering firm with about $12 billion of annual revenue and roughly 47,000 employees, was selected on October 29 to provide end-to-end delivery of AEP's $37 billion transmission portfolio across Indiana, Michigan, Ohio, Kentucky, Tennessee, West Virginia and Virginia: project management, project controls, engineering and design, siting, right-of-way acquisition and environmental services 12.
Jacobs leads a team that includes ORC, GFT and RC Commonwealth, and its PA Consulting unit will support AEP's innovation work 1. WSP USA takes the four-state western portfolio, and neither firm has disclosed what its contract is worth 3. New since this site's October 29 article on the $22 billion spending add and the $5.2 billion of stock behind it: the plan's full shape, and the first named delivery partner on it 3.
Transmission drives the rate base to $162 billion
Transmission is the largest line in the plan, ahead of $36 billion for generation and $22 billion for distribution 24. AEP expects its rate base, the asset pool on which regulators let it earn a return, to grow from $87 billion this year to $162 billion by 2031, and transmission rate base to nearly double from about $37 billion to roughly $69 billion 345.
Transmission rate base nearly doubles by 2031
- Total rate base
- Transmission rate base
- Estimate
Data
| Total rate base | Transmission rate base | |
|---|---|---|
| 2026 | $87B | $37B |
| 2031 (estimate) | $162B | $69B |
On that doubling rests the guide management raised the same week: 9% to 11% operating earnings growth through 2031, up from 7% to 9%, with $22 billion of capital added and only $5.2 billion of new equity funding it 5.
Transmission is the largest slice of AEP's $100 billion five-year capital plan
Data
| Value | |
|---|---|
| Transmission | $37B |
| Generation | $36B |
| Distribution | $22B |
The wires land on customers' bills
Transmission earns through rates, and rates land on customers. The Ohio Consumers' Counsel, the state's residential utility advocate, puts generation at about half of a typical residential bill, with transmission and distribution making up the other half 6. In March, Ohio regulators approved higher AEP Ohio transmission charges, about $7.90 a month for a household using 1,000 kilowatt-hours 6.
In September, ratepayers rallied in Ironton, Ohio, over data-center-driven grid costs: "If you don't provide extra capacity on the grid, that's going to drive up electricity rates for everybody," resident Bob McCollister told WCHS 7. Jacobs sits between the two sides, paid to deliver the program regardless of whose return the wires earn 12.
Data centers are signing up to pay for the grid
AEP signed 15 gigawatts of new load commitments in the third quarter and expects 84 gigawatts of contracted load by 2031, up 22% in one quarter 48. Of that total, 92% is tied to data centers, cryptocurrency customers included 3.
Management says fully executed take-or-pay contracts, in which large customers pay fixed costs whether or not they draw the power, are now expected to offset up to $21 billion for existing residential customers, up from $16 billion 4. And one of the largest projects in the plan, roughly $5 billion of 765-kilovolt lines serving SB Energy's 10.4-gigawatt Piketon data-center campus in Ohio, is contracted to be paid by that customer over 20 years, at an 11.35% base return on equity 38.
Two tickers, two bets
For Jacobs holders, the award is a multi-year revenue anchor landing on a business already accelerating: quarterly revenue growth ran at 5.1% in mid-2025, then 27% and 34.5% in the two quarters since 9. For AEP holders, the selection is execution cover. The plan's risk has shifted from winning demand to building wires on schedule.
Jacobs revenue accelerated into the AEP award, from 5% to 34.5% growth
Data
| Revenue | |
|---|---|
| Q2 '24 | $2.88B |
| Q3 '24 | $2.96B |
| Q4 '24 | $2.93B |
| Q1 '25 | $2.91B |
| Q2 '25 | $3.03B |
| Q3 '25 | $3.16B |
| Q4 '25 | $3.29B |
| Q1 '26 | $3.7B |
| Q2 '26 | $4.08B |
Most of the $37 billion still rides on rates
The strongest rebuttal comes from AEP itself. "AEP is committed to having new large-load customers bear the incremental system costs they create and fund the investments required to serve them," chief executive Bill Fehrman said with the results 4. SB Energy has committed $4.2 billion toward the Piketon transmission work, money AEP says is meant to shield other customers from rate increases 6.
But that covers one campus: the remaining $28 billion of the $37 billion is regional-planning and reliability spend that rides on rates 3. AEP's own release flags the concentration risk, noting that projected data-center demand "may not materialize as expected" 4.
Permits and rate cases set the schedule
Construction on the Piketon lines is expected to begin in early 2027, pending approvals from PJM, Ohio regulators and FERC 38. Jacobs's fiscal first-quarter report, covering the December quarter and due in February, will show the backlog these fees build in.
Then watch the rate cases across the seven states: Jacobs books its fees over five years, and the customers who fund the wires will pay for them for decades.
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