AEP Lifts Capital Plan to $100 Billion Through 2031

The Tip Desk · October 28, 2026 · 3 min read

Third-quarter operating earnings were $2.23 a share as the utility expanded its five-year plan and raised its long-term growth outlook.

American Electric Power (AEP) reported third-quarter 2026 operating earnings of $1,216 million, or $2.23 a share, compared with $963 million, or $1.80 a share, a year earlier. GAAP earnings were $1,187 million, or $2.18 a share, versus $972 million, or $1.82 a share.

The electric utility said it now expects full-year 2026 operating earnings to be at or above the high end of its $6.25 to $6.55 a share range, after lifting that range from $6.15 to $6.45 in the second-quarter release.

The larger story was a step-up in the company’s multi-year investment program. AEP announced a $100 billion five-year capital plan through 2031, up from the $78 billion plan it had set through 2030, and said the update is expected to support a 13% plus rate base compound annual growth rate through 2031.

The company also introduced an expected annual operating earnings per share growth rate of 9% to 11% from 2027 through 2031, with a greater-than-10% CAGR through 2031 based off the original 2026 guidance midpoint of $6.30 a share, replacing the prior 7% to 9% annual growth rate through 2030. It issued operating earnings guidance of $6.75 to $7.05 a share for 2027 and $7.40 to $7.70 a share for 2028.

Chairman, president and chief executive officer Bill Fehrman said AEP is entering its next phase of growth from a position of strength and that the expanded capital plan and increased growth rate reflect opportunities to meet rapidly growing energy needs.

With 15 gigawatts of new load commitments signed in the third quarter, incremental contracted load is now expected to grow to 84 gigawatts by 2031, up from 69 gigawatts through 2030. Rate base is expected to reach $162 billion by 2031.

The $100 billion plan includes about $37 billion in transmission, with transmission rate base expected to approach $70 billion by 2031; $36 billion in generation; and about $22 billion in distribution.

Fully executed take-or-pay electric service agreements in AEP’s vertically integrated states are now expected to generate up to $21 billion in fixed cost offsets for existing residential customers over the life of the contracts, increased from $16 billion.

Vertically Integrated Utilities operating earnings rose to $721 million from $573 million a year earlier. Generation & Marketing operating earnings were $101 million, versus $49 million. Transmission & Distribution Utilities operating earnings were $284 million, versus $259 million. AEP Transmission Holdco operating earnings were $219 million, versus $200 million.

Vertically Integrated Utilities retail kilowatt-hours rose 8.0% to 27,377 million, with commercial up 15.2% and residential up 8.9%. Transmission & Distribution Utilities retail kilowatt-hours rose 13.6% to 31,913 million, with commercial up 18.0% and industrial up 15.3%.

AEP said new manufacturers, hyperscalers and other large customers help spread fixed system costs across a broader customer base, and that the second proposed rate reduction in Indiana is an example of how managed load growth can benefit customers.