AEP Announces $100 Billion Capital Plan After Operating EPS Rises to $2.23
Key Facts
American Electric Power (AEP) said operating earnings in the third quarter of 2026 rose to $2.23 per share, from $1.80 in the year-earlier period, and announced a five-year, $100 billion capital plan. In a statement via PR Newswire, the company said the plan targets compound annual growth in its rate base of more than 13% through 2031. It also forecast annual operating earnings growth of 9% to 11% during 2027–2031. The figures highlight the company's link between higher spending and expected growth in earnings and its rate base. It also said it expects compound annual growth in operating earnings of more than 10% through 2031.
Alongside operating earnings, AEP reported third-quarter GAAP earnings of $2.18 per share, compared with $1.82 a year earlier. That puts the two profitability measures at similar levels, but the company reported them separately in its results announcement. Total operating earnings were $1,216 million, versus $963 million in the third quarter of 2025. Total GAAP earnings were $1,187 million, compared with $972 million in the year-earlier period. The presentation of both figures reflects the difference between the accounting basis and the operating earnings measure the company uses in its forward guidance.
AEP said it expects 2026 operating earnings per share to come in at or above the high end of its previous range of $6.25 to $6.55. The outlook follows third-quarter results in which operating earnings per share rose from the year-earlier period. The annual growth range of 9% to 11% covers 2027 to 2031, while the target for compound growth in operating earnings is more than 10% through 2031. The forecasts accompany the new investment plan, which raises its value to $100 billion over five years. Through the plan, the company is targeting compound annual growth in its rate base of more than 13% through 2031.
The company said large-load contracts could make available up to $21 billion in offsets for residential customers' costs. That puts growth in contracted demand at the center of its stated rationale for the plan and forecasts, with some potential savings directed to residential customers. In its second-quarter results, AEP said it had added six gigawatts of signed load agreements, bringing total contracted load growth through 2030 to 69 gigawatts. The agreements included data center companies, industrial companies and hyperscalers. It also said at the time that it had secured about 13 gigawatts of gas turbine capacity for potential deployment through 2031, and was evaluating opportunities to secure up to an additional 10 gigawatts through 2035.
The new plan represents an expansion from the previous $78 billion capital plan the company announced in July. In the context of supporting affordability, AEP said in its second-quarter results that load growth could make available up to $16 billion in offsets to projected costs, in addition to $1.4 billion in expected customer savings through federal loan guarantees and grants. The results announcement followed the company's disclosure on October 20 of a quarterly cash dividend of 97 cents per common share. The increase in investment and new guidance therefore coincide with the continuation of dividends announced for shareholders. AEP shares closed at $130.3 on October 27, after closing at $129.22 on October 26 and $129.69 on October 23.
For a quarterly comparison, AEP reported operating earnings of $1.36 per share in the second quarter of 2026, compared with $1.43 in the second quarter of 2025. GAAP earnings in that quarter were $1.31 per share, versus $2.29 a year earlier. These figures provide a different context from the improvement in third-quarter earnings: both measures fell year over year in the previous quarter before rising in the third quarter. The Federal Open Market Committee meeting was scheduled for October 27 and 28, 2026. The Federal Reserve Board scheduled the news conference for October 28 at 2:30 p.m. Eastern time.