Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Could you elaborate on the data center load and how AEP plans to align system capacity and rate structures to accommodate rapid growth without burdening other ratepayers?
A: Benjamin Gwynn Stonestreet Fowke, Interim President, Interim CEO & Director of AEP, explained that AEP has been proactive with significant transmission investments, which will support the initial wave of data center growth. For future needs, additional transmission and possibly generation will be necessary. AEP is developing new tariffs requiring long-term commitments and fair load expectations from data centers, ensuring that the growth benefits all customers by keeping rates affordable.
Q: How is AEP handling the unique challenges posed by data centers, such as demands to be behind the meter but still have emergency tariffs, or their impact on rate structures?
A: Benjamin Gwynn Stonestreet Fowke and Peggy I. Simmons, EVP of Utilities, highlighted that AEP is ensuring fairness in tariffs and planning. Data centers that wish to be partially self-generating must provide upfront information so AEP can plan accordingly. The goal is to ensure all customers pay their fair share and that large loads do not compromise reliability.
Q: What is the status of the external CEO search, and what qualities are you looking for in a candidate?
A: Benjamin Gwynn Stonestreet Fowke mentioned that the search is progressing with high-quality candidates being considered. The process is expected to take 4 to 10 months, and AEP is looking for a leader who aligns with the company’s strategic goals and values.
Q: Can you discuss the financial strategy regarding the need for growth equity and how it fits into AEP's plans?
A: Charles E. Zebula, EVP & CFO, stated that AEP plans to maintain a strong balance sheet and BBB credit rating, suggesting that any capital raised would support sustainable growth while preserving financial health. The specifics will be aligned with upcoming capital forecasts.
Q: With the upcoming FERC rulings on transmission planning and grid-enhancing technologies, how might these impact AEP?
A: Benjamin Gwynn Stonestreet Fowke and Peggy I. Simmons indicated that they do not anticipate significant impacts from the FERC planning reforms on AEP. They are actively using grid-enhancing technologies and participating in discussions to shape these regulations.
Q: What are the implications of the recent IRS private letter ruling on AEP's financials?
A: Charles E. Zebula explained that the ruling allows AEP to treat tax items on a stand-alone basis, which prevents normalization violations and reduces regulatory liabilities. This adjustment is expected to have a positive impact on AEP’s financials once it is fully integrated into rate structures across jurisdictions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
