Utility AEP increases capital spending plan to meet demand for data center power
American Electric Power increased its five-year investment plan from $54 billion to $72 billion Wednesday to meet the unprecedented demand for power by customers such as data centers and industries.
In premarket trading, shares of the company increased by 3.2%.
U.S. utilities have increased their capital budgets to meet the growing demand from technology companies who are building data centers for complex AI-related tasks.
AEP stated that the plan is supported by 28 gigawatts in new load, backed by agreements with customers, an increase of 4 GW from July, as well as 190 GW more of load requests, at different stages of development.
The company, which serves 5.6 million customers across 11 states, and has the largest transmission system of electric power in the United States said that its peak demand for the system is expected to increase to 65 GW in 2030 from the current 37 GW.
According to the Energy Information Administration, the U.S. will see record-breaking power consumption in 2025-2026 due to the demand for data centers to run AI technology.
AEP Transmission, a company unit, had also received a $1.6 Billion loan guarantee from the U.S. Department of Energy in October to upgrade almost 5,000 miles transmission lines in Indiana Michigan Ohio Oklahoma and West Virginia.
The total quarterly operating revenue increased by nearly 11%, to $6.01billion.
The third quarter saw its Transmission and Distribution utilities segment report operating earnings of 259.1 million dollars, up from $245.2 millions a year earlier.
AEP has reaffirmed that it expects to achieve a profit of between $5.75 and $5.95 per share for the full year. It now expects the upper half.
According to data compiled and reported by LSEG, the Ohio-based utility posted an adjusted profit of 1.80 cents per share for three months ending September 30. This was just below analysts' average estimates of $1.81 cents per share. (Reporting and editing by Pooja Deai in Bengaluru, with Pooja Menon reporting from Bengaluru)
(source: Reuters)
