Oct 28, 2026 earnings call — AEP introduces large multi-year capital plan
AEP set new long-term operating EPS growth of 9% to 11% and unveiled a $100 billion 5-year capital plan.
Revenue $6.8B (est $6.5B) · EPS $2.23 (est $2.05)
Key quotes
"Today, we are pleased to introduce a new long term expected annual operating EPS growth rate of 9% to 11% for 2027-2031."
"As Bill highlighted, we are excited to introduce our $100 billion 5-year capital plan through 2031."
"Supported by fully executed take-or-pay ESAs, we estimate that this could now generate up to $21 billion for existing residential customers across our vertically integrated utilities over the life of the contracts."
Analyst Q&A 8
Capital spending growth and equity timing
Q (Shar Pourreza · Wells Fargo): Analyst asked what could make EPS CAGR exceed 10% through 2031, and whether Texas or other projects extend that runway. He also asked timing and need for equity, and whether any equity is needed in 2026.
A: Management said they see a large pipeline of transmission and generation opportunities beyond the plan, are confident they can deliver the 10% EPS CAGR through 2033, and that they have secured over $5 billion of equity forwards giving flexibility on timing and structures for future equity.
"And so in working with Trevor and the team here and given this visibility along with our focus on ensuring we execute on this, I am really confident in our ability to deliver the 10% EPS CAGR through 2033." — William J. Fehrman (CEO·CHAIR)
How much Texas load is included
Q (Steve Fleishman · Wolfe): Analyst asked whether the generation builds will be regulated or put in a Genco, and how much of the contracted 84 gigawatts is included in the plan, especially Texas.
A: Management said they are studying Genco structures and may use them where state regulators allow, while focusing now on securing load and investing in vertically integrated utilities. They said the Texas capital plan is conservative and much incremental Texas investment tied to LOAs is not yet in the plan.
"So I would say what you are looking at is probably a fairly conservative capital plan in Texas especially as it relates to the incremental LOAs that we have got associated with Texas." — Trevor Ian Mihalik (CFO)
Timing and classification of ERCOT batch zero
Q (Julien Dumoulin-Smith · Jefferies): Analyst asked timing for ERCOT batch zero and whether incremental Texas load from batch filings could fold into the plan soon. He also asked what part of submitted load is categorized as base versus study.
A: Management said ERCOT expects to file its data center audit report on December 10th and discuss it the following week, they noted $2 billion of cash or collateral collected for Texas, and said of 45 gigawatts submitted, 16 was base load and 29 was study load; classifications are administrative and more clarity is coming.
"With regards to the timing of batch zero our understanding is that ERCOT expects to file its data center audit report on December 10th which will then be discussed during a PUCT open meeting that following week." — William J. Fehrman (CEO·CHAIR)
Which RTO projects are already planned
Q (Nick · Evercore): Analyst asked how much of the $37 billion transmission plan is already awarded versus still pending in regional planning or competitive bids, and asked what drives AEI accretion from the fuel cell project.
A: Management said the RTO-related transmission in the plan has already gone through regional transmission planning processes and most of it is ready to construct while some regulatory approvals remain. They also explained the Wyoming fuel cell comes on in stages with earnings beginning in 2027 and full in-service by December 2028.
"When we put that into the plan, that has already gone through a regional transmission planning process." — Kate Dixon
Capital allocation to AEP infrastructure
Q (David Arcaro · Morgan Stanley): Analyst asked how capital will be allocated to the new AEP infrastructure segment and whether future CapEx there is driven by large individual projects or broader generation in certain states.
A: Management said they took a conservative approach to allocating capital to the unregulated infrastructure business and will only commit capital where returns are substantially higher than regulated returns; they seek long-term contracted projects with creditworthy counterparties, like the Wyoming fuel cell, to justify allocation.
"Yes. So David, here again, we have taken a fairly conservative approach in putting capital into that business." — Trevor Ian Mihalik (CFO)
How conservative is the Texas capital plan
Q (Ross Fowler · BofA): Analyst asked whether Howard-Solstice is included in the Texas transmission number and how much of the Texas plan relates to batch zero load versus reliability work.
A: Management said they took a conservative approach for AEP Texas while batch zero and broader planning play out; about 85% of the Texas plan is for system reliability and resiliency, approved lines like Howard-Solstice are included, and any additional load-driven projects would be upside to add later.
"So we have taken a pretty. As Trevor a pretty conservative approach to the AP Texas capital plan in this update." — Kate Dixon
Gas generation positioning and AEP infrastructure timing
Q (Richard Sunderland · Truist): Analyst asked what gas generation is secured versus planned, turbine slot activity since 2Q, and timing for more AEP infrastructure opportunities.
A: Management said they have been proactive securing turbine slots and have about 15 gigs of load under firm long-term ESAs in the VIUs, giving a foundation to invest in baseload generation; they expect more projects to be allocated and see clear demand and supportive regulatory treatment. For AEP infrastructure, they will be opportunistic but careful about regulated vs unregulated balance.
"So Richard, what we have been pretty public about is that in the VIUs, we have secured about 15 gigs of, load under firm long term take-or-pay ESAs." — Trevor Ian Mihalik (CFO)
Dividend growth outlook
Q (Jeremy Tonet · JPMorgan): Analyst asked how to think about dividend growth given the large capital plan and retained cash, and requested a refresh on the dividend guidance.
A: Management said dividend decisions are the board's discretion, they plan modest dividend growth and have moderated dividend growth over the last year; they are forecasting similar modest growth and indicated roughly 2% per year over the 4- or 5-year period as a guidepost while they support the large capital plan.
"We have moderated the growth of the dividend over the last year." — Trevor Ian Mihalik (CFO)