American Electric Power (AEP) is accelerating investments in renewable energy and grid modernization, backed by a US$78 billion capital plan for 2026-2030 designed to support rising electricity demand, renewable energy integration and transmission expansion.
The COLUMBUS, Ohio-based utility said it has visibility into more than US$10 billion of additional investment opportunities beyond its current plan, reinforcing one of the largest infrastructure programs in the U.S. power sector.
American Electric Power (AEP) is significantly expanding its renewable energy portfolio to meet rapidly growing electricity demand, with plans to add 6,378 MW of solar, 5,056 MW of wind, and 502 MW of battery energy storage between 2026 and 2035. The renewable build-out is part of a broader generation expansion totaling 27,235 MW, including 15,299 MW of natural gas capacity to support grid reliability.
Among AEP’s operating companies, SWEPCO plans to add 4,311 MW of solar, 605 MW of wind, and 252 MW of storage, while Indiana Michigan Power (I&M) targets 2,959 MW of solar, 3,100 MW of wind, and 50 MW of storage. Public Service Company of Oklahoma (PSO) plans 893 MW of solar, 753 MW of wind, and 200 MW of storage, while Appalachian Power (APCo) expects 1,926 MW of solar and 600 MW of wind. Kentucky Power is planning 450 MW of natural gas generation.
To accelerate renewable procurement, AEP has issued competitive requests for proposals (RFPs), including 800 MW of renewable resources for APCo and all-source procurement covering renewables and natural gas. SWEPCO is pursuing 3,000 MW and 4,000 MW of accredited capacity through separate procurement processes, with projects expected to enter service between 2027 and 2029.
Renewable energy is also a major component of AEP’s investment strategy. The company plans to invest $8 billion in renewable energy projects between 2026 and 2030 as part of its $78 billion capital program. The capital plan also includes $13 billion for new generation, $33 billion for transmission, $17 billion for distribution, and $4 billion for other investments. AEP also sees more than $10 billion in additional capital opportunities beyond the current plan.
AEP is advancing innovative clean energy technologies, including a $4 billion Wyoming fuel cell project expected to enter service by 2028 to qualify for full Investment Tax Credits. The company is also pursuing more than $2 billion of additional generation opportunities across its service territory to meet increasing electricity demand.
The utility is supporting renewable and grid investments through federal funding. It has secured approximately $5 billion in U.S. Department of Energy loans, including an up to $3.3 billion loan for AEP Texas, alongside almost $400 million in DOE grants. These initiatives are expected to generate approximately $1 billion in customer savings from lower financing costs and an additional $400 million in grant-supported benefits over project lifetimes.
Overall, AEP operates 33 GW of owned and contracted generating capacity, serves 5.6 million customers, and plans to invest $78 billion through 2030 while targeting approximately 11 percent annual rate base growth and supporting increasing renewable energy deployment across its regulated utility footprint.
AEP reported that contracted new load additions increased to 69 GW through 2030, up from 63 GW in the previous quarter, driven largely by data centers, advanced manufacturing and industrial electrification. To support this demand, the company has secured approximately 13 GW of gas-fired turbine capacity while continuing to expand transmission infrastructure that enables greater renewable energy deployment across its service territory.
The company said its expanded investment program is expected to deliver an 11 percent five-year rate base CAGR while supporting a long-term operating earnings CAGR of more than 9 percent through 2030. AEP also expects to provide customers with up to US$16 billion in cost offsets from load growth and approximately US$1.4 billion in savings through federal grants and loan guarantees, helping finance grid upgrades needed for renewable energy integration.
For the second quarter of 2026, AEP reported operating earnings of US$742 million, or US$1.36 per share, on revenue of US$5.45 billion. The company raised its full-year 2026 operating earnings guidance to US$6.25-US$6.55 per share, up from the previous range of US$6.15-US$6.45 per share, reflecting confidence in continued investment-led growth.
Management said continued investments in transmission networks, generation assets and grid infrastructure will strengthen AEP’s ability to connect more renewable energy projects, improve system reliability and meet rapidly growing electricity demand from AI-driven data centers and industrial customers over the remainder of the decade.
BABURAJAN KIZHAKEDATH
