American Electric Power : 59th Annual Edison Electric Institute Financial Conference 2024 Fact Book

Published: 2024-11-11 00:07:04 ET AEP

AEP 2024 Factbook

59th EEI Financial Conference

Hollywood, Florida

November 10-12, 2024

"Safe Harbor"

Statement Under the

Private Securities

Litigation Reform

Act of 1995

Darcy Reese, Vice President

Investor Relations 614-716-2614 [email protected]

Annie Pribisko, Director

Investor Relations 614-716-2646 [email protected]

This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and each of its Registrant Subsidiaries believe that their expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are: changes in economic conditions, electric market demand and demographic patterns in AEP service territories, the economic impact of increased global conflicts and trade tensions, and the adoption or expansion of economic sanctions, tariffs or trade restrictions, inflationary or deflationary interest rate trends, volatility and disruptions in financial markets precipitated by any cause, including turmoil related to federal budget or debt ceiling matters or instability in the banking industry; particularly developments affecting the availability or cost of capital to finance new capital projects and refinance existing debt, the availability and cost of funds to finance working capital and capital needs, particularly (i) if expected sources of capital, such as proceeds from the sale of assets, subsidiaries and tax credits, and anticipated securitizations do not materialize at the level anticipated, and (ii) during periods when the time lag between incurring costs and recovery is long and the costs are material, shifting demand for electricity, the impact of extreme weather conditions, natural disasters and catastrophic events such as storms, drought conditions and wildfires that pose significant risks including potential litigation and the inability to recover significant damages and restoration costs incurred, limitations or restrictions on the amounts and types of insurance available to cover losses that might arise in connection with natural disasters or operations, the cost of fuel and its transportation, the creditworthiness and performance of parties who supply and transport fuel and the cost of storing and disposing of used fuel, including coal ash and spent nuclear fuel, the availability of fuel and necessary generation capacity and performance of generation plants, the ability to recover fuel and other energy costs through regulated or competitive electric rates, the ability to build or acquire generation (including from renewable sources), transmission lines and facilities (including the ability to obtain any necessary regulatory approvals and permits) to meet the demand for electricity at acceptable prices and terms, including favorable tax treatment, cost caps imposed by regulators and other operational commitments to regulatory commissions and customers for generation projects, and to recover all related costs, the disruption of AEP's business operations due to impacts on economic or market conditions, costs of compliance with potential government regulations, electricity usage, supply chain issues, customers, service providers, vendors and suppliers caused by pandemics, natural disasters or other events, new legislation, litigation or government regulation, including changes to tax laws and regulations, oversight of nuclear generation, energy commodity trading and new or heightened requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances that could impact the continued operation, cost recovery and/or profitability of generation plants and related assets, the impact of federal tax legislation on results of operations, financial condition, cash flows or credit ratings, the risks before, during and after generation of electricity associated with the fuels used or the byproducts and wastes of such fuels, including coal ash and spent nuclear fuel, timing and resolution of pending and future rate cases, negotiations and other regulatory decisions, including rate or other recovery of new investments in generation, distribution and transmission service and environmental compliance, resolution of litigation or regulatory proceedings or investigation, the ability to efficiently manage operation and maintenance costs, prices and demand for power generated and sold at wholesale, changes in technology, particularly with respect to energy storage and new, developing, alternative or distributed sources of generation, the ability to recover through rates any remaining unrecovered investment in generation units that may be retired before the end of their previously projected useful lives, volatility and changes in markets for coal and other energy-related commodities, particularly changes in the price of natural gas, the impact of changing expectations and demands of customers, regulators, investors and stakeholders, including evolving expectations related to environmental, social and governance concerns, changes in utility regulation and the allocation of costs within regional transmission organizations, including ERCOT, PJM and SPP, changes in the creditworthiness of the counterparties with contractual arrangements, including participants in the energy trading market, actions of rating agencies, including changes in the ratings of debt, the impact of volatility in the capital markets on the value of the investments held by the pension, other postretirement benefit plans, captive insurance entity and nuclear decommissioning trust and the impact of such volatility on future funding requirements, accounting standards periodically issued by accounting standard-setting bodies, other risks and unforeseen events, including wars and military conflicts, the effects of terrorism (including increased security costs), embargoes, cybersecurity threats, labor strikes impacting material supply chains, global information technology disruptions and other catastrophic events, the ability to attract and retain requisite work force and key personnel.

59th EEI FINANCIAL CONFERENCE

Table of Contents

AEP Overview: Slide 4

Generation Diversity: Slide 23

Slide 5: AEP Is a Pure Play Regulated Utility

Slide 24: ESG Profile

Slide 25: Generation Fleet

Slide 6: Operational and Financing Structure

Slide 26: Coal Fleet Retirements

Slide 7: Service Territory

Slide 27: Generation Summary

Slide 8: 2023 Retail Revenue

Slides 28-30: Owned Generation

Slide 9: Transmission Line Circuit Mile Detail

Slides 31-32: PPA Resources

Slide 10: Distribution Line Circuit Mile Detail

Slide 33: Regulated 2025 Projected Fuel Procurement

Slides 11-12: Rate Base and ROEs

Slide 13: Rate Case Filing Requirements

Slide 14: Major Storm O&M Recovery Mechanisms by Jurisdiction

Slide 15: Jurisdictional Fuel Clause Summary

Transmission Initiatives: Slide 16

Financial Update: Slide 34

Slide 17: Transmission Metrics by RTO

Slide 35: Liquidity and Banking Group

Slide 18: Stable and Efficient Transmission Investment Recovery

Slide 36: Long-Term Debt Maturity Profile

Slide 19: FERC Formula Rates

Slides 37-42: Debt Schedules

Slide 20: AEP Transmission Holdco Legal Entity Structure

Slide 43: Pension and OPEB Estimates

Slide 21: AEP Transco Footprint

Slide 22: Federal Energy Regulatory Commission (FERC) Overview

Operating Company Detail: Slide 44

Slides 45-50: Appalachian Power Company

Slides 51-54: Indiana Michigan Power Company

Slides 55-58: Kentucky Power Company

Slides 59-62: AEP Ohio

Slides 63-66: Public Service Company of Oklahoma

Slides 67-70: Southwestern Electric Power Company

Slides 71-73: AEP Texas

59th EEI FINANCIAL CONFERENCE

AEP Overview

59th EEI Financial Conference

Hollywood, Florida

November 10-12, 2024

AEP Is a Pure

Play Regulated

Utility

10%-12%

TOTAL SHAREHOLDER

RETURN

Attractive investment proposition

55%

OF OPERATING EARNINGS FROM TRANSMISSION1

High growth transmission supported by predictable and transparent revenues

~8%

RATE BASE CAGR

Solid rate base growth through 2029 forecast off 2023 base

29GW

TOTAL GENERATION

Diverse generation fleet

As of September 30, 2024

40K

TRANSMISSION MILES

Nation's largest electric transmission system

225K

DISTRIBUTION MILES

One of the largest distribution systems in the U.S.

16,000

EMPLOYEES

Across the system

As of September 30, 2024

5.6M

CUSTOMERS

Throughout 11 states

1 Calculated using 2025E transmission earnings of $3.20 as a percentage of the 2025 guidance midpoint of $5.85.

59th EEI FINANCIAL CONFERENCE

AMERICAN ELECTRIC POWER, INC.

Operational and

Financing

Structure

Uses a combination of external LT financing and commercial paper program.

Uses a combination of external and internal LT financing and money pool.

Uses internal LT financing and money pool.

Uses a combination of external and internal LT financing.

Does not represent legal structure.

Regulated Utilities

Appalachian Power

Indiana Michigan

Company

Power Company

Kentucky Power

Public Service

Company

Company of Oklahoma

Southwestern Electric

AEP Ohio

Power Company

Wheeling Power

Kingsport Power

Company

AEP Texas

AEP Generation

Company

AEP Transmission

Holding Company

AEP Transmission

Joint Ventures

Company

AEP Appalachian

Transco

AEP Kentucky

Transco

AEP Ohio Transco

AEP Oklahoma

Transco

AEP Indiana Michigan

Transco

AEP West Virginia

Transco

Competitive

Operations

AEP Energy Supply

AEP Energy

AEP EnergyPartners

AEP Generation

Resources

59th EEI FINANCIAL CONFERENCE

Service Territory

Vertically Integrated Utilities

Transmission and Distribution

Utilities

Public Service Company of Oklahoma (PSO) Southwestern Electric Power Company (SWEPCO)

Appalachian Power Company (APCo) Indiana Michigan Power Company (I&M)

Kentucky Power Company (KPCo)

Kingsport Power Company (KGPCo)

Wheeling Power Company (WPCo)

AEP Texas

AEP Ohio

59th EEI FINANCIAL CONFERENCE

2023 Retail Revenue

Top 10 Industrial Sectors Across the AEP System by NAICS Codes

Percentage of AEP System Retail Revenues

Arkansas

Indiana

Kentucky

AEP's service territory encompasses approximately 5.6M customers throughout 11 states

1 Figures do not include Other Retail.

Name

331 Primary Metal Manufacturing

324 Petroleum and Coal Products Manufacturing

326

Plastics and Rubber

Products Manufacturing

212

Mining (except Oil and

Gas)

311

Food Manufacturing

Transportation Equipment

336

Manufacturing

16.0%

13.4%

12.0%

10.8%

7.5%

6.0%

5.0%

4.8%

4.3%

3.4%

10%

14%

Louisiana

12%

Michigan

Ohio

15%

Oklahoma

Tennessee

10%

24%

Texas

Virginia

West Virginia

Percentage Composition by Customer Class1

Residential

20%

Commercial

49%

Industrial

Wholesale

29%

59th EEI FINANCIAL CONFERENCE

Transmission Line Circuit Mile Detail

Operating Company and State Level (Circuit Miles)

Represents the nation's largest transmission system of approximately 40K transmission miles

Operating Company

APCo

I&M

KGPCo

KPCo

AEP Ohio

PSO

SWEPCO

AEP Texas

WPCo

Transco - IM

Transco - OH

Transco - OK

Transco - WV

Total

765kV

730

610

258

506

2,123

500kV

112

345kV

370

1,529

1,483

605

778

973

112

6,004

230kV

106

141

161kV

307

363

138kV

2,949

1,136

358

2,929

1,666

1,455

4,162

193

687

685

672

244

17,180

115kV

88kV

69kV

821

464

422

1,965

406

1,554

3,419

426

580

339

10,548

46kV

579

166

120

865

40kV

34.5kV

134

232

377

862

23kV

Total

5,787

3,971

1,270

7,320

2,729

4,123

8,554

280

1,299

1,329

1,107

463

38,305

Transmission line circuit miles are current as of 12/31/2023; excludes approximately 2,450 circuit miles owned by ETT and Joint Ventures.

Ownership of transmission line assets can cross state lines.

State

Arkansas

Indiana

Kentucky

Louisiana

Michigan

Ohio

Oklahoma

Tennessee

Texas

Virginia

West Virginia

Total

765kV

608

258

509

349

383

2,123

500kV

112

345kV

1,411

105

232

1,509

742

1,525

316

6,004

230kV

141

161kV

307

363

138kV

249

1,537

358

285

284

3,611

2,364

153

5,058

1,692

1,589

17,180

115kV

88kV

69kV

437

564

423

320

327

2,543

746

4,215

585

386

10,548

46kV

165

651

865

40kV

34.5kV

216

405

862

23kV

Total

1,084

4,336

1,270

711

934

8,643

3,905

275

10,813

2,939

3,395

38,305

59th EEI FINANCIAL CONFERENCE

Distribution Line Circuit Mile Detail

Operating Company and State Level (Circuit Miles)

Represents one of the largest distribution systems in the U.S. of approximately 225K distribution miles

Distribution line circuit miles are current as of 12/31/2023; includes approximately 37,965 miles of underground circuits.

Ownership of distribution line assets can cross state lines.

Operating Company

AEP Texas

APCo

I&M

KPCo

AEP Ohio

PSO

SWEPCO

TOTAL

Line Miles

45,426

55,512

20,917

10,130

47,263

20,860

25,876

225,984

State

Arkansas

Indiana

Kentucky

Louisiana

Michigan

Ohio

Oklahoma

Tennessee

Texas

Virginia

West Virginia

TOTAL

Line Miles

4,150

15,428

10,130

13,014

5,423

47,329

20,860

1,614

54,137

31,804

22,095

225,984

59th EEI FINANCIAL CONFERENCE

Disclaimer

AEP - American Electric Power Company Inc. published this content on November 11, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on November 11, 2024 at 05:06:09.154.