American Electric Power reported higher third-quarter earnings and raised its growth ambitions, backed by a larger five-year investment plan. The utility now plans to spend $100 billion through 2031 as electricity demand grows, and it expects that investment and new large-customer contracts to support faster earnings growth while helping offset costs for residential customers.
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Third-quarter earnings increased year over year. AEP reported GAAP earnings of $1.187 billion, or $2.18 per share, compared with $972 million, or $1.82 per share, a year earlier. Operating earnings were $1.216 billion, or $2.23 per share, up from $963 million, or $1.80 per share.
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2026 earnings outlook moved to the high end of the range or higher. AEP expects full-year operating earnings per share to be at or above $6.55, the top of its $6.25-to-$6.55 guidance range.
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The five-year capital plan has grown to $100 billion through 2031. AEP expects the expanded investment program to support rate-base compound annual growth of more than 13% through 2031. The company linked the plan to rising electricity demand and investment needs across its service territory.
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AEP set a higher long-term earnings-growth target. It expects operating earnings per share to grow 9% to 11% annually from 2027 through 2031. It also projects a compound annual growth rate above 10% through 2031, measured from the original 2026 guidance midpoint of $6.30 per share.
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The company issued operating earnings guidance for 2027 and 2028. It expects $6.75 to $7.05 per share in 2027 and $7.40 to $7.70 in 2028.
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Large-customer contracts are expected to provide greater cost offsets for households. AEP now estimates that fully executed take-or-pay electric service agreements in its vertically integrated states will generate up to $21 billion in fixed-cost offsets for existing residential customers over the contracts’ lives, up from its previous estimate of $16 billion.
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AEP said large customers should cover the incremental system costs they create. The company cited 15 gigawatts of new load commitments signed in the third quarter. It said the contracts, alongside investment in generation, transmission and distribution, are intended to meet that demand while limiting the cost burden on existing customers. AEP pointed to a second proposed rate reduction in Indiana as an example of how load growth can benefit customers.
The announced plan ties AEP’s higher growth targets to a much larger investment program and increasing demand for electricity. The company also says its large-customer agreements are designed to help pay for the additional system costs and provide offsets for residential customers.