American Electric Power lifts forecast as AI fuels electricity demand

American Electric Power AEP.O on Thursday raised its current-year operating earnings forecast, supported by robust electricity demand from data centers and other large customers.

U.S. utilities are ramping up efforts to address growing demand for power capacity from major technology companies that are setting up data centers to support complex AI-related tasks.

• AEP has signed 6 gigawatts of new load commitments in the second quarter, driven largely by data center contracts in Texas.
• The company now has 45 GW of contracted load through 2030 in Texas, 12 GW in Ohio, another 12 GW in five other states, and expects new large-load customers to save residential ratepayers up to $16 billion through take-or-pay agreements.
• AEP, however, said its current $78 billion capital plan does not yet reflect this scale of Texas load growth.
• During the quarter, AEP also secured 3 GW of additional gas-fired turbine capacity, bringing its total secured capacity to approximately 13 GW for potential deployment through 2031.
• The company said it is also evaluating opportunities to obtain up to 10 GW of additional turbine capacity through 2035.
• It also expects about $1.4 billion in customer benefits from the U.S. Department of Energy loans and grants.

AEP now expects full-year operating earnings to be between $6.25 and $6.55 per share from its previous forecast range of $6.15 to $6.45 per share.

The Columbus, Ohio-based company reported operating earnings of $742 million, or $1.36 per share, compared with $766 million, or $1.43 per share, last year.