Summary of AEP Q1 2026 Earnings Call

1Key Financial Results and Metrics

Operating Earnings: AEP reported Q1 2026 operating earnings of $1.64 per share, up from $1.54 per share in Q1 2025, totaling $891 million.

Full-Year Guidance: The company reaffirmed its full-year operating earnings guidance of $6.15 to $6.45 per share.

Regulated ROE: The regulated return on equity (ROE) increased to 9.3%, with expectations to reach 9.5% by 2030.

Capital Plan: AEP increased its 5-year capital plan to $78 billion, up from $72 billion, with an expected 11% CAGR for the rate base.

2Strategic Updates and Business Highlights

Load Growth: AEP contracted an additional 7 gigawatts of load, bringing the total contracted load to 63 gigawatts, primarily from data centers and industrial customers.

Infrastructure Investments: The capital plan includes $33 billion for transmission projects, representing 42% of the overall plan. AEP is also focusing on gas-fired generation, with an expanded generation capital outlook of $24 billion.

Partnerships: AEP continues to strengthen its strategic partnership with Quanta Services to enhance transmission project execution.

Affordability Initiatives: AEP is forecasting up to $16 billion in cost offsets for existing customers due to large load contracts.

3Forward Guidance and Outlook

Earnings Growth: AEP expects an annual operating earnings growth rate of 7% to 9% for 2026 through 2030, with long-term operating earnings CAGR now projected to be greater than 9%.

Investment Opportunities: AEP has identified over $10 billion in additional projects beyond the current capital plan, including the Piketon transmission project and Wyoming fuel cell initiative.

4Bad News, Challenges, or Points of Concern

PJM Market Issues: AEP expressed concerns about the efficiency of the PJM interconnection process, indicating that delays could hinder their ability to connect new generation resources to meet customer demand.

Regulatory Challenges: There are ongoing discussions about potential changes in PJM and SPP that could impact load interconnections and overall operational efficiency.

Operational Costs: Increased operational and maintenance costs are anticipated due to the expansion of the system, although they are expected to rise modestly at a 4% CAGR.

5Notable Q&A Insights

PJM Participation: AEP is evaluating its options regarding PJM, emphasizing the need for faster interconnection processes but clarifying that they are not planning to exit PJM at this time.

Wyoming Fuel Cells: AEP is confident in the progress of the Wyoming fuel cell project, with protections in place should customer requirements not be met by the deadline.

Gas Turbine Supply: AEP has secured access to gas-fired turbines from major suppliers, indicating readiness to meet customer demands for both simple cycle and combined cycle projects.

Equity Financing: AEP plans to maintain a balanced financing strategy, with only 18% of the new capital plan requiring equity financing, reflecting a disciplined approach to funding growth. Overall, AEP demonstrated strong financial performance and strategic growth initiatives while acknowledging challenges in regulatory processes and operational efficiency. The company remains committed to balancing growth with affordability for customers.