AEP Q1 2026 Profits Transcript

Date

Would possibly 5, 2026, at 9 a.m. ET

Name members

• President and Leader Govt Officer — William J. Fehrman
• Govt Vice President and Leader Monetary Officer — Trevor Ian Mihalik

Desire a quote from a Motley Idiot analyst? E mail [email protected]

Takeaways

• Working profits — $1.64 in keeping with proportion, or $891 million, in comparison to $1.54 in keeping with proportion in the similar length a 12 months prior.
• Complete-year steerage — Working profits steerage reaffirmed at $6.15 to $6.45 in keeping with proportion for 2026.
• Regulated earned ROE — Greater to 9.3% for the quarter, with expectancies for 9.5% by way of 2030.
• Reduced in size load expansion — General load beneath contract rose to 63 gigawatts from 56 gigawatts, with just about 90% attributed to information facilities.
• 5-year capital plan — Expanded to $78 billion, up $6 billion, essentially for transmission and era initiatives.
• Transmission initiatives — New awards come with a $1.6 billion challenge in SPP and a $1.9 billion challenge in PJM, each expected to be in carrier by way of 2030.
• Era CapEx outlook — Raised by way of $3 billion to $24 billion via 2030, together with new gasoline era investments at Indiana Michigan Energy (I&M).
• Anticipated charge base expansion — Forecasted five-year charge base CAGR of eleven% around the plan length.
• Working profits CAGR — Lengthy-term goal now anticipated to exceed 9% over 2026 via 2030 because of contemporary capital will increase.
• Federal grants and loans — Secured $315 million in grants and closed a $1.6 billion DOE mortgage ensure for transmission, projected to yield $275 million in visitor financial savings.
• Buyer charge offsets — Forecasted as much as $16 billion in charge offsets for present consumers because of vast load contracts over the contract time period.
• O&M prices — Working and upkeep expense emerging at a 4% CAGR, attributed to added staffing and strengthen for brand new property.
• Expansion fairness investment — $1.1 billion building up brings deliberate expansion fairness issuance to $7 billion for 2026-2030, with maximum weighted to the plan’s latter years.
• FFO-to-debt leverage metrics — S&P ratio at 14.7%, Moody’s at 13.9%, in opposition to corporate objectives of 14%-15%.
• Regulatory results — Contemporary approvals higher allowed ROE to 9.84% in Ohio, 9.65% in Arkansas, and 9.75% in West Virginia; approvals come with charge decreases, and progressed infrastructure charge restoration.

Abstract

American Electrical Energy (AEP +1.88%) reported 1 / 4 marked by way of expanded infrastructure funding plans, higher shrunk load from hyperscale information facilities, and incremental regulatory approvals with upper allowed returns. Control described a robust pipeline of $10 billion in new initiatives, no longer but incorporated in respectable steerage, as proof of additional upside possible. Massive-scale grid modernization projects now constitute 42% of the entire capital plan, and corporate leaders expressed self belief in credit score high quality and self-discipline for each investment and execution. Strategic partnerships, reminiscent of with Quanta Services and products, have been cited as pivotal for accelerating transmission building schedules. Control is intently tracking regional transmission operator efficiency, in particular in PJM and SPP, and expressed readiness to regulate marketplace participation if interconnection processes stay gradual.

• Fehrman said, “we’re expanding our five-year capital plan to $78 billion, up from the prior $72 billion,” mentioning newly licensed initiatives as the foundation.
• Mihalik reported, “One of the best ways to take into accounts that is that those investments no longer handiest improve our profits expansion, however building up our anticipated long-term running profits CAGR to now more than 9% over the length of 2026 to 2030.”
• Corporate leaders highlighted that almost all further shrunk PJM load is “supported by way of take-or-pay ESAs,” which mitigate income possibility.
• Direct quote: Fehrman said, “if one thing isn’t carried out now, I be expecting shall we nonetheless be having those identical conversations in 10 years,” referencing gradual tempo of era interconnections in PJM.
• Mihalik clarified, “$3 billion on the again finish of the plan is tied to the $78 billion CapEx plan,” emphasizing stability sheet self-discipline for incremental challenge financing.

Trade word list

• PJM: Regional Transmission Group protecting portions of the japanese United States, facilitating wholesale electrical energy markets and grid reliability.
• SPP: Southwest Energy Pool, a regional transmission group running electrical grids and markets within the central United States.
• ESA: Electrical Carrier Settlement, a long-term contract obligating consumers to positive minimal electrical energy purchases, regularly utilized in take-or-pay buildings.
• FFO-to-debt: Ratio of price range from operations to overall debt, a key credit score metric for comparing monetary leverage in utilities.
• ATM: At-the-market fairness providing program, permitting an organization to factor stocks incrementally at prevailing marketplace costs.

Complete Convention Name Transcript

William J. Fehrman: Thanks, Darcy, and just right morning. We admire you becoming a member of us for American Electrical Energy Corporate, Inc.’s first quarter 2026 profits name. I will be able to start on slides 4 and 5. This can be a defining length for our {industry}. The tempo of trade is accelerating, and the alternatives forward people are increasing. Inside this surroundings, American Electrical Energy Corporate, Inc. is very neatly located to seize expansion given our scale, management place in era and transmission, remarkable execution functions, and our operational footprint in one of the crucial quickest rising areas within the nation. As visitor wishes evolve, scale, innovation, and intense focal point on execution will outline the following era of software expansion.

We’re in a position to satisfy extraordinary call for throughout our vast carrier territory no longer handiest pushed by way of information facilities, but additionally broader financial building. That is meaningfully increasing the long-term alternative forward people and within the communities we serve. On the identical time, our expansion is handiest imaginable with relied on partnerships. We’re staying intently aligned with our stakeholders, being attentive to our consumers, governors, regulators, and policymakers, whilst running to advance answers that strengthen affordability, financial building, reliability, and resiliency. As we scale our gadget, execution and operational self-discipline turn out to be much more the most important. Those are vital strengths of the brand new management workforce at American Electrical Energy Corporate, Inc.

By means of leveraging our measurement and revel in, we’re mitigating provide chain pressures and obtaining vital sources to strengthen what’s a multiyear sustained length of infrastructure buildout. This comprises already securing further high-voltage, lengthy lead-time apparatus like transformers, breakers, and lattice metal. As we’ve got stated on previous calls, we’ve got secured greater than 10 gigawatts of gas-fired turbine capability. In brief, we’re executing on a disciplined approach to ship constant and well timed long-term worth for each consumers and shareholders. Now turning to slides 7 and eight.

I will be able to supply a high-level evaluation of our first quarter effects, strategic outlook, affordability and regulatory development earlier than handing it over to Trevor to stroll via our financials and powerful expansion trajectory in additional element. We’re happy to record first quarter 2026 running profits of $1.64 in keeping with proportion, or $891 million. Those effects construct on our monetary and operational momentum from 2025 and provides us self belief in reaffirming our complete 12 months 2026 running profits steerage vary of $6.15 to $6.45 in keeping with proportion. American Electrical Energy Corporate, Inc. continues to revel in considerable gadget call for concentrated in large part in our key expansion states of Indiana, Ohio, Oklahoma, and Texas.

Within the first quarter, we shrunk an extra 7 gigawatts of load coming most commonly from AEP Texas and AEP Ohio, and we have now an incremental shrunk overall of 63 gigawatts anticipated by way of 2030. This is a rise from the 56 gigawatts we shared simply ultimate quarter. Of the 63 gigawatts, just about 90% are information facilities, which come with hyperscalers, whilst the remaining are industrials. Reduced in size load consumers will have to meet excessive credit score requirements via funding grade credit score high quality, dad or mum promises, or different types of credit score strengthen compliant with tariff necessities. They’re additionally sponsored by way of electrical carrier agreements and letters of settlement.

To be very transparent, I’m intensely interested by execution of the initiatives required to get this load attached for our consumers. For this reason we’re in trade. Of the 63 gigawatts, 53 gigawatts are in Texas and Ohio, requiring large-scale transmission initiatives, which we imagine we excel at setting up and running. The rest 10 gigawatts require new era for which American Electrical Energy Corporate, Inc. has secured the vital lengthy lead-time apparatus and has strategic contracting preparations to provide the hard work vital to effectively execute on our supply commitments. Measurement issues, and American Electrical Energy Corporate, Inc. is the usage of our breadth and scale to offer what is wanted and to satisfy visitor calls for.

Trevor will talk about the 63 gigawatts in additional element in a while. To strengthen those initiatives, these days we’re expanding our five-year capital plan to $78 billion, up from the prior $72 billion, which now drives an anticipated 11% five-year charge base CAGR. The $6 billion of incremental investments come with $3.5 billion in lately licensed PJM and SPP transmission investments and $2.5 billion for I&M gas-fired era. As well as, we’ve got line of sight to over $10 billion of initiatives for 2026 via 2030. Those investments are incremental to the brand new $78 billion plan and come with the Piketon transmission challenge, the Wyoming gasoline mobile initiative, and further new era alternatives throughout our footprint.

We stand in a position to seize incremental expansion alternatives whilst keeping up a robust stability sheet, which, as I’ve stated repeatedly, is a key precedence for us. Particularly in gentle of the phenomenal load growth we’re seeing these days, we also are reaffirming our top class running profits expansion charge of seven% to 9% for 2026 via 2030. The $6 billion building up to our capital plan is pushed by way of transmission and era initiatives that come on-line later within the subsequent 5 years. Those investments are anticipated to be accretive to profits within the again finish of the plan and building up our anticipated long-term running profits CAGR to now more than 9%.

Turning to slip 9, we imagine our transmission scale and experience stay unrivaled within the {industry}. These days, American Electrical Energy Corporate, Inc. owns and operates greater than 2,100 miles of extremely high-voltage 765 kV transmission traces throughout six states. Massive load consumers proceed to make a choice websites in our footprint on account of the energy and class of our complicated transmission community. As we’ve got highlighted earlier than, American Electrical Energy Corporate, Inc. pioneered the fashionable 765 kV transmission gadget in North The us, and we’ve got greater than six a long time of revel in designing, development, and running those extremely high-voltage property. These days, no person even comes with regards to our revel in and functions on this space.

Fingers down, we’re the biggest owner-operator in the USA. The strategic partnership settlement with Quanta Services and products that we introduced past due ultimate 12 months continues to force excessive self belief within the execution of our high-voltage transmission initiatives. By means of pairing American Electrical Energy Corporate, Inc.’s imaginative and prescient for a contemporary, resilient grid with an industry-leading spouse like Quanta, we’re accelerating the improvement of the 765 kV infrastructure buildout that shall be very important to assembly the reliability, resiliency, and effort supply wishes of the long run. As I discussed, we have been lately awarded new 765 kV transmission initiatives in SPP and PJM.

For SPP, we have been at once assigned a significant challenge that is composed of 315 miles of 765 kV traces from Seminole, Oklahoma, to southwest Shreveport, Louisiana. We additionally secured further initiatives from Potter, Texas, to Beckham County, Oklahoma. In combination, those initiatives overall $1.6 billion and are expected to be in carrier by way of 2030. In PJM, we have been awarded the buildout of 330 miles of predominantly 765 kV traces in Ohio and Indiana. Those initiatives overall $1.9 billion and now have anticipated in-service dates in opposition to the tip of our five-year plan. Moreover, we’re happy to had been decided on for a just about 200-mile 765 kV challenge in MISO, which expands our aggressive footprint into Wisconsin.

Whilst this challenge falls in large part out of doors the present five-year window with an in-service date of 2034, it provides us self belief and visibility in our longer-term expansion charge into the long run. With the addition of those initiatives, our transmission funding forecast now totals $33 billion, representing 42% of the full $78 billion capital plan and underscoring our place in strengthening the country’s vital electrical transmission spine. Turning to new era sources on slide 10, American Electrical Energy Corporate, Inc. is proactively development the capability had to strengthen accelerating call for and long-term expansion. As a part of this effort, we’ve got expanded our era capital outlook by way of $3 billion to $24 billion via 2030, pushed by way of new gasoline era at I&M.

At a broader point, our portfolio technique is deliberately balanced and various with investments throughout herbal gasoline, sun, wind, and garage. This mixture strengthens reliability whilst selling a disciplined way to handing over cost-effective investments for our consumers over the long run. We have now secured get admission to to greater than 10 gigawatts of gas-fired turbine capability from main producers and are advancing our initiatives during the interconnection procedure throughout PJM and SPP. We’re leveraging skilled EPC companions along our in-house engineering experience to ship those initiatives successfully and at scale.

We also are keeping up flexibility in how we meet incremental call for for brand new era, using aggressive RFPs and focused bilateral acquisitions to complement our self-developed pipeline and make sure we seize probably the most sexy alternatives. In parallel, we proceed to guage nuclear answers, aiming to put American Electrical Energy Corporate, Inc. at the vanguard of next-generation baseload applied sciences. As we’ve got in the past discussed, we’re actively reviewing a number of possible websites and interconnection places as we assess how nuclear can play a significant position sooner or later to strengthen load expansion. Any nuclear funding would require sturdy capital coverage, disciplined stability sheet safeguards, and important regulatory and governmental engagement reminiscent of mortgage promises and lengthy lead-time apparatus strengthen.

No initiatives will transfer ahead in the event that they position undue possibility on our trade or our shareholders. Whilst we’ve got been very a hit with development out transmission infrastructure in PJM, American Electrical Energy Corporate, Inc. continues to spot problems round how briefly and successfully load is being attached to era. The present state of PJM’s efficiency and stakeholder approval procedure does no longer give me nice self belief that those problems shall be resolved anytime quickly. If truth be told, if one thing isn’t carried out now, I be expecting shall we nonetheless be having those identical conversations in 10 years. The PJM marketplace labored rather well when provide exceeded call for, however we are actually in an excessively other time.

As such, we’re lately assessing all of our choices to be sure that we’re discovering an effective and nice trail ahead to ship what our consumers want, which, merely put, is extra interconnected era to energy their companies. We’re appearing a an identical overview of our club in SPP. Increasing and strengthening the grid will make sure that new era sources throughout all applied sciences can attach briefly, reliably, and cheaply to serve our fast-growing load. As our era plans mature, we can proportion the monetary plans as a part of our customary cadence at the 3rd quarter name later this 12 months. Please flip to slip 11.

Whilst we make investments to satisfy impulsively rising load expectancies, affordability is best of thoughts, and we stay interested by taking decisive movements to stay residential charge affects manageable. With the huge load contracts we’ve got secured, we’re forecasting as much as $16 billion in charge offsets for present consumers from their allotted contributions to fastened bills all the way through the existence of those agreements. This can be a main affordability win for our present consumers and a transparent validation of our customer-focused expansion technique. On the identical time, our focal point on customer support via responsibility is handing over effects.

We have now had a significant relief within the moderate length of outages around the gadget during the last 12 months, which is strengthening visitor relationships via extra dependable energy. Whilst our charge base continues to enlarge, O&M is emerging at a 4% CAGR over the similar length, pushed by way of the extra staffing and upkeep strengthen required to perform new era and transmission property being added to the gadget. This operational self-discipline is an actual differentiator for American Electrical Energy Corporate, Inc. and positions us exceptionally neatly for the long run. We also are tapping federal gear to fortify visitor financial savings. The workforce has secured $315 million in era and distribution grants.

We closed on a $1.6 billion DOE mortgage ensure associated with transmission, projected to ship over $275 million in visitor financial savings over the lifetime of the loans. As a part of our long-term technique, we’ve got additionally implemented for extra DOE loans to fund our era and transmission investments. We predict to offer periodic updates as mortgage closings development. Those are significant bucks going correct again to consumers, which is every other instance of the way we’re pairing expansion with affordability. Over the last two years, we’ve got led the {industry} in organising the correct regulatory framework for enormous load expansion.

We secured approvals for brand new information heart price lists in Ohio, adopted by way of vast load tariff answers in Indiana, Kentucky, and West Virginia. We don’t seem to be preventing there. We have now energetic filings in Michigan, Oklahoma, Texas, and Virginia. You’re going to discover a complete abstract of those movements on slide 12 of these days’s presentation. Those tariff buildings are designed with a few transparent targets. First, we’re protective our present consumers by way of making sure information and different vast load consumers quilt the investments required to strengthen their power wishes. 2d, we’re protective our income and profits base via minimal call for fees embedded at once inside of those binding take-or-pay contracts.

We have now made forged development on tariff buildings, and we can proceed to paintings with our regulators and stakeholders to verify vast load consumers pay their charge to serve and supply charge reduction to our residential consumers. Turning to slip 13, this brings me to our sturdy regulatory development within the quarter throughout more than one jurisdictions. This is still a significant focal point space of mine. In Ohio, we secured fee approval of the distribution base case agreement, together with an affordability measure which comprises a charge lower for patrons, in conjunction with a 9.84% ROE, up from the prior ROE of 9.7%. In Arkansas, we effectively higher our ROE from 9.5% to 9.65%.

We have now no longer ended up with a discounted ROE in any contemporary charge case end result. In Indiana, we complicated our useful resource technique with approval of our expedited era useful resource plan, surroundings the degree for an upcoming base charge case that can come with a visitor charge relief supporting our focal point on affordability. In West Virginia, we gained a positive reconsideration order that higher the approved ROE to 9.75% from 9.25%—a vital building up. The fee additionally licensed a changed charge base charge infrastructure funding tracker. Either one of those approvals come at crucial time because the state seeks to advance its long-term power technique and projects geared toward making sure West Virginia has the dependable, inexpensive power had to strengthen emerging call for.

With sturdy strengthen from the governor, this items vital funding alternative beneath a extra positive regulatory surroundings. We additionally persisted to look constant certain results throughout different spaces of our multistate footprint, together with Oklahoma, Louisiana, and Texas. Taken in combination, we imagine those movements mirror the rising energy of our regulatory manner. By means of listening intently to state leaders and aligning our plans with their wishes, we’re reaching balanced regulatory effects that get advantages each consumers and traders. Sooner than I wrap up, I need to underscore how remarkable the beginning of this 12 months has been. Our workforce is working at a degree of execution that we imagine is surroundings a brand new same old for the {industry}.

We’re making vital strategic investments to satisfy what’s really a transformative second for our corporate. On the identical time, we’re running hand in hand with our regulators and policymakers to advance their key priorities, all whilst taking disciplined, proactive steps to take care of affordability for our consumers. I’m extraordinarily assured in our technique, our functions, and the American Electrical Energy Corporate, Inc. workforce. We’re in a position to seize the considerable alternatives in entrance people by way of accelerating expansion, having an intense focal point on execution, using visitor affordability, and the usage of American Electrical Energy Corporate, Inc.’s measurement and scale to fortify our aggressive benefits whilst developing long-term worth for our shareholders.

I will be able to now flip the decision over to Trevor to stroll via our first quarter efficiency drivers and supply extra element on our financials and powerful expansion trajectory.

Trevor Ian Mihalik: Thank you, and just right morning, everybody. On these days’s name, I will be able to start by way of reviewing the quarter’s key profits drivers in conjunction with our self belief in load expansion, which has higher 7 gigawatts from ultimate quarter to now 63 gigawatts. I will be able to then talk about our newly expanded $78 billion capital plan, up $6 billion, and our anticipated higher long-term running profits CAGR of now more than 9% in line with this capital plan. I will be able to then spotlight the road of sight we need to over $10 billion of funding alternatives above our base capital plan earlier than final with feedback on our stability sheet energy. Please flip to slip 15 of the presentation.

First quarter 2026 running profits have been $1.64 in keeping with proportion in comparison to $1.54 in keeping with proportion in 2025. Ends up in our VIU and T&D segments remained sturdy all the way through the quarter, pushed by way of positive charge case results throughout more than one jurisdictions. As William famous previous, we proceed to look certain regulatory development throughout our carrier territory. Regulated earned ROE for the quarter higher to 9.3% and is anticipated to succeed in roughly 9.5% by way of 2030 as we proceed to execute our regulatory technique with a focal point on affordability for our consumers. Along with powerful regulatory efficiency, we proceed to advance our transmission funding technique and noticed ongoing load expansion throughout our footprint, which I will be able to talk about in additional element in a while.

Those positives have been partly offset by way of prior 12 months’s favorable climate and persisted spend to reinforce gadget reliability. Transmission Holdco efficiency was once basically impacted by way of higher expense together with typhoon recovery and better belongings taxes. We predict Transmission Holdco profits to be favorable on a year-over-year foundation by way of 2026. The Era and Advertising and marketing section effects mirrored more potent wholesale margin efficiency partly offset by way of prior 12 months contract optimization advantages. In any case, in Company and Different, the variance was once in large part pushed by way of upper O&M, higher passion expense, and timing associated with source of revenue taxes, which we await will opposite by way of the tip of this 12 months. Turning to slip 16 and our present load outlook, we proceed to look vital acceleration in shrunk load expansion.

In strengthen of that pattern, we’ve got performed on 63 gigawatts of overall load, up from 56 gigawatts reported only a few months in the past. This building up displays persisted development changing initiatives from our making plans queue into binding visitor contracts. As a reminder, those contracts come with letters of settlement and long-term electrical carrier agreements relying at the related tariff provisions in each and every jurisdiction. As William discussed, with vast load ESA contracts we’ve got secured inside of our vertically built-in utilities, we’re forecasting as much as $16 billion in charge offsets for present consumers from their allotted proportion of fastened bills.

Our research estimates shrunk income from vast consumers over the lifetime of the ESAs and evaluates how fastened charge accountability reallocates throughout visitor categories over the years, bearing in mind load ramps. As shrunk load continues to develop, we stay similarly targeted at the high quality and credit score energy of the shoppers who’re using it. As referenced previous, our shrunk consumers will have to meet excessive credit score requirements. The vast majority of shrunk megawatts are with vast, well known hyperscalers and business consumers. This top quality and various visitor base paperwork a robust basis for long-term partnerships in infrastructure building. With that context, I will be able to flip to contemporary task by way of area.

Beginning with PJM, shrunk load in PJM higher by way of roughly 1 gigawatt all the way through the quarter, pushed essentially by way of further visitor contracts performed in Ohio. Considerably all of our overall incremental PJM load is supported by way of take-or-pay ESAs. Past near-term additions, we proceed to look a powerful pipeline of longer-dated alternatives in PJM. Maximum significantly, we lately introduced a ten gigawatt information heart campus with SB Power in Piketon, Ohio. The vast majority of the incremental load related to this challenge isn’t lately incorporated in our load forecast however is mirrored within the roughly 190 gigawatt energetic interconnection queue. Given the early degree of building, we await incorporating this load into our forecast as business discussions development and ESAs are formalized.

Along with the Piketon campus, we also are comparing a multibillion-dollar Google information heart building in Putnam County, West Virginia. This chance stays within the early phases and isn’t incorporated in American Electrical Energy Corporate, Inc.’s present load forecast or monetary outlook. Turning to SPP, shrunk load higher by way of roughly 1 gigawatt all the way through the quarter, pushed essentially by way of an Amazon information heart challenge in northwest Louisiana. Virtually part of our overall incremental SPP load is now supported by way of take-or-pay ESAs, an building up from ultimate quarter reflecting persisted development changing new load building into binding take-or-pay ESAs.

Stepping again, those newly introduced information heart initiatives are supported by way of top quality hyperscalers, maximum of whom have publicly dedicated to investment the desired infrastructure upgrades, serving to to offer protection to charge affordability for our broader visitor base. On the identical time, the size of load expansion we’re seeing highlights the energy of our numerous footprint this is extremely suited to information facilities and our skill to draw large-scale financial building to the communities we serve. Turning to slip 17 and transferring to ERCOT, this area accounted for almost all of shrunk load expansion all the way through the quarter. Load higher to 41 gigawatts, up from 36 gigawatts reported on the finish of the fourth quarter.

For context, I need to spotlight how this load is shrunk and the way this differs from PJM and SPP. All 41 gigawatts of shrunk load in ERCOT meet the criteria beneath Senate Invoice 6 and are secured via performed LOAs. Those agreements require consumers to protected land, whole interconnection research, supply detailed load forecasts, and entirely fund comparable building prices. This construction acts as an efficient clear out, making sure initiatives advancing into our forecast are neatly advanced, financially sponsored, and executable. With that framework in position, we’re running intently with ERCOT and different stakeholders to advance answers that can strengthen the numerous and rising call for.

Yearly in April, AEP Texas recordsdata its load expansion forecast via ERCOT’s Regional Transmission Making plans, or RTP, procedure. This RTP technique analyzes height load in conjunction with transmission and era constraints to counsel gadget enhancements. On this 12 months’s April 1 RTP submitting, AEP Texas submitted 31 gigawatts of incremental call for by way of the tip of the last decade. Because of submission necessities and timing, AEP Texas has since performed LOAs for every other 10 gigawatts of load above the 31 gigawatts, underscoring American Electrical Energy Corporate, Inc.’s load expansion wishes of 41 gigawatts in ERCOT. Be mindful, underlying call for in ERCOT is actual.

It’s supported by way of signed visitor agreements, formal making plans submissions, and sponsored by way of kind of 60 gigawatts of energetic load within the ERCOT interconnection queue. As Senate Invoice 6 implementation advances, together with batch processing, the focal point shall be more and more on timing. We predict better readability and sure bet later this summer time because the rulemaking progresses on when those a lot will in the end interconnect. American Electrical Energy Corporate, Inc. is dedicated to development the desired transmission and distribution infrastructure in Texas, however timing stays extremely dependent at the supporting era. In brief, the query isn’t whether or not the call for exists, but if it comes on-line in ERCOT.

Turning to slip 18, I need to spend a while on our capital plan and the way it continues to fortify our long-term profits expansion profile. These days, we officially higher our five-year capital plan by way of $6 billion, bringing the entire to $78 billion. This building up displays our inclusion of the SPP and PJM transmission initiatives William referenced previous, which in combination constitute kind of $5 billion of awarded transmission initiatives. In line with our disciplined way to capital making plans, we’ve got integrated handiest roughly $3.5 billion of the ones awards into the capital plan.

Particularly for the SPP challenge, the precise department of traces between American Electrical Energy Corporate, Inc. and a regional peer has no longer but been finalized, so we’re the usage of a conservative 50% assumption to replace the capital plan. The expanded plan additionally comprises our contemporary bulletins associated with I&M’s deliberate acquisition of the Sycamore and Giant Sandy herbal gasoline era amenities. From a timing viewpoint, this incremental $6 billion is in large part related to initiatives that input carrier nearer to the 2029 and 2030 time-frame. In consequence, those investments are accretive to profits within the again finish of the plan.

One of the best ways to take into accounts that is that those investments no longer handiest improve our profits expansion, however building up our anticipated long-term running profits CAGR to now more than 9% over the length of 2026 to 2030. Past the bottom plan, we proceed to look significant upside. For the 2026 via 2030 length, we’ve got line of sight to over $10 billion of initiatives that don’t seem to be incorporated within the $78 billion plan, together with the Wyoming gasoline mobile challenge, Piketon transmission challenge, and further era investments. Whilst those incremental alternatives stay topic to key gating pieces or require readability and are subsequently no longer mirrored in our base capital forecast, they spotlight the intensity and energy of our capital pipeline.

With shrunk load expansion now totaling 63 gigawatts, mixed with line of sight to over $10 billion of initiatives and different growing era and transmission alternatives, we see significant upside to the present capital plan. We can supply a extra fulsome replace at the capital plan, our comparable financing technique, and our long-term expansion outlook as a part of our customary cadence within the 3rd quarter. Turning to slip 19, I will be able to stroll via our up to date five-year financing plan aligned with this new expanded capital program. To strengthen the $6 billion of extra capital officially added these days, we’ve got modestly higher the extent of expansion fairness within the plan.

Fairness has higher by way of $1.1 billion and now totals $7 billion for the length of 2026 to 2030. Importantly, this incremental fairness represents handiest 18% of the $6 billion of incremental capital expansion, underscoring our persisted focal point on disciplined, balanced financing. Having a look on the timing of the fairness issuance, the bulk stays weighted in opposition to the again part of the five-year plan, offering flexibility as initiatives advance and money flows construct with execution. In line with that profile, we intend to stay opportunistic throughout all financing tools as marketplace stipulations evolve, investment long-term expansion in a measured and shareholder-friendly means. Having a look around the making plans horizon, we stay neatly aligned with our FFO-to-debt objectives of 14% to fifteen% for each S&P and Moody’s.

As of the primary quarter, S&P FFO-to-debt stands at 14.7%, close to the highest finish of our goal vary, whilst the Moody’s metric is 13.9% and slightly under our goal; each stay neatly above the downgrade threshold of 13%. General, the up to date financing plan preserves stability sheet energy whilst supporting our expanded capital program. With a disciplined investment manner, a robust credit score profile, and versatility to deploy a variety of financing gear to make the most of marketplace stipulations, we’re neatly located to responsibly finance this expansion whilst handing over exceptionally sturdy monetary effects over the years.

Turning to slip 20, I need to shut by way of highlighting a couple of key takeaways that improve the development we’re making throughout monetary efficiency, expansion execution, and stability sheet self-discipline. First, we delivered a robust first quarter 2026 with running profits of $1.64 in keeping with proportion. This efficiency provides us self belief to reaffirm our complete 12 months running profits steerage of $6.15 to $6.45 in keeping with proportion, reflecting powerful monetary effects via persisted certain regulatory momentum. 2d, our load expansion tale continues to fortify. We’ve got performed on 63 gigawatts of incremental shrunk load via 2030, supported by way of a various and top quality visitor base.

This persisted vast load call for supplies a robust basis for long-term infrastructure investments that allow us to ship dependable energy to our consumers. 3rd, we stay interested by executing our newly expanded $78 billion capital plan, which is using an anticipated 11% five-year charge base CAGR. The $6 billion of incremental investments improve our anticipated 7% to 9% annual profits expansion, expanding our anticipated long-term running profits CAGR to now more than 9%. With shrunk load expansion totaling 63 gigawatts, along side line of sight to over $10 billion of initiatives and different growing era and transmission alternatives, we see significant upside to the present plan.

We can assess and incorporate additional alternatives as a part of our customary cadence within the 3rd quarter. Fourth, we proceed to fund this expansion in a disciplined means with just a modest building up in incremental fairness to strengthen the expanded capital program. On the identical time, our vast and various footprint supplies the versatility to deploy capital the place it delivers the best have an effect on whilst keeping up monetary energy as we execute at scale. In any case, we proceed to paintings intently with regulators and different stakeholders to stay affordability entrance and heart, together with forecasting as much as $16 billion in charge offsets for present consumers.

Via positive engagement, we’re advancing regulatory frameworks that stability equity for patrons and shareholders and strengthen the vital paintings of creating and modernizing the grid. Taken in combination, those components spotlight the momentum we’re development and the self-discipline we carry to execution. We’re assured in our technique, supported by way of a rising pipeline of alternatives and a balanced monetary manner. We imagine American Electrical Energy Corporate, Inc. is without doubt one of the highest located investor-owned utilities to ship long-term worth as we assist construct the vital infrastructure had to strengthen extraordinary expansion. We perform in states which might be extremely receptive to our carrier style and are very professional trade.

We proceed to look sturdy certain momentum around the platform with electrification on the middle of our expansion tale. Thanks for becoming a member of us these days. We can now open the decision for questions.

Operator: We can now start the query and solution consultation. To invite a query, press big name then the number 1 to your phone keypad. Please pick out up your handset and be sure that your telephone isn’t on mute when asking your query. Our first query will come from the road of Steven Isaac Fleishman with Wolfe Analysis. Please pass forward.

Steven Isaac Fleishman: Excellent morning. Thank you for all of the updates. William, the PJM statement—may you give slightly extra colour on why you might be assessing choices, what it could take to in reality go out PJM, and what you wish to see them do to steer clear of that? To any extent further element could be useful.

William J. Fehrman: To be transparent, we don’t seem to be announcing we’re exiting PJM. What we say is that as we take a look at the RTOs that we perform in, they’re more and more suffering to give you the responses we want to meet call for. As we get ready our plans and our skill to execute, we’re extraordinarily relaxed that we have got the apparatus, the engineering, and the contractors. What we want is a sooner technique to interconnect into the gadget. There are efforts that the federal government has put into position to take a look at to transport PJM and SPP alongside, however there are suits and begins and it isn’t transferring briefly.

We want to do the whole lot we will to assist push that procedure alongside and paintings with our state regulators, governors, and policymakers to advance the gadget we’ve got in position these days. As the chief of possibility for this corporate, I even have to have a look at what occurs if we can not discover a trail ahead. We’re within the very early phases of the analysis segment, taking into consideration a complete vary of choices, together with staying in those markets, transferring, or exploring choice buildings. Final analysis, we can proceed to paintings intently with our regulators and policymakers, and we can proceed to interact at once with FERC and with the RTOs to determine methods to transfer this procedure alongside sooner.

Whilst all people are running very onerous to get the apparatus and contractors we want, we additionally need to get the interconnections had to boost up getting era to load. We’re dedicated to taking part in a marketplace this is attentive to visitor wishes, however we additionally know that we need to have the option to make it extra environment friendly and nice.

Steven Isaac Fleishman: That is smart. Two different fast ones. At the Bloom and visitor settlement in Wyoming, how assured are you about those necessities being met in the second one quarter to transport ahead with that?

William J. Fehrman: The ones discussions proceed to transport ahead. For us, we’re safe without reference to what occurs on the ones initiatives. Our workforce has lately been involved with the native mayor and different stakeholders in that area. There’s energetic paintings happening. I’m assured that the challenge will proceed ahead, however there’s some paintings that needs to be carried out between different events. For us, we’re in a position to head. We have now the whole lot we want in position. We’re doing slightly little bit of earthwork in this challenge, looking forward to the entire unlock. We’re proceeding to paintings with Bloom to be sure that we will meet the schedules that the shoppers need.

I believe we’re in nice form in regards to our business phrases in this challenge, and with a bit of luck this may increasingly all get resolved by way of the tip of the second one quarter.

Operator: Our subsequent query will come from the road of Julien Patrick Dumoulin-Smith with Jefferies.

Julien Patrick Dumoulin-Smith: A number of questions and rather well carried out. To select it up the place Steven left off, how do you take into accounts the cadence of the road of sight for that subsequent $10 billion? You could have the Wyoming piece and the Piketon piece. It sort of feels such as you could be insinuating some PJM era alternatives. How do you take into accounts backstop procurement or bilateral participation, and the way do you take into accounts the 3rd quarter cadence as opposed to how you may set expectancies around the litany of items going?

Trevor Ian Mihalik: Thank you, Julien. We can all the time take care of a disciplined way to capital making plans the place we handiest come with initiatives that experience sufficiently complicated and cleared gating pieces, with a excessive stage of regulatory self belief, in our formal plan. We have now introduced the Piketon challenge and the Wyoming gasoline mobile challenge, and this is the reason we would have liked to flag the $10 billion—simply between the ones two initiatives, which may be round an $8 billion quantity. We do produce other alternatives and line of sight to further era within the footprint. We would have liked to place a marker round Piketon and Wyoming and display incremental alternative round era, and in addition get the Side road relaxed that we’re being conservative with the $78 billion five-year capital plan.

I didn’t need to pop out at the 3rd quarter with the formal replace with out addressing those at the first quarter name as a result of we’ve got been public with Piketon and Wyoming. It displays the powerful nature of our rising capital plan. During the last a number of years, we’ve got been rising our capital plan at kind of a 22% CAGR. The $6 billion has definitive line of sight, which is why we raised the plan, and the $10 billion is incremental on best of that. We stay up for a extra powerful, fulsome manner at the 3rd quarter name.

Julien Patrick Dumoulin-Smith: And on PJM, timeline on that call and the way you may take part within the backstop, simply to verify I heard that correct?

William J. Fehrman: At the backstop, when that procedure will get officially licensed, we’re already searching for possible alternatives that shall we bid into via our unregulated companies. The wider piece for me is that we need to clear up the speed-to-market factor. As we paintings with PJM, different stakeholders, and our governors, that is obviously a space that has to get fastened. We’re going to closely interact, work out how we will boost up it, and ensure we do it in an acceptable means with our states. PJM, particularly, isn’t expediting the relationship of era to load. We’re assured with the place we sit down these days at the initiatives we’ve got, however we want to make it pass sooner.

Operator: Our subsequent query will come from the road of David Keith Arcaro with Morgan Stanley. Please pass forward.

David Keith Arcaro: Excellent morning. William, as you mentioned seeking to transfer extra briefly, are you having a look at different methods or probably increasing on-site energy anyplace else throughout your gadget, increasing what you may have carried out with the gasoline cells?

William J. Fehrman: As we paintings with our consumers, we’re proud to carry plenty of bridging methods to serve their a lot. We have now examples the place we’ve got carried out gasoline cells. We have now get admission to to aeroderivatives. We will do smaller interconnections into our gadget. We have now plenty of gear to take a look at to boost up their skill to get their trade on-line on the pace they would like. We can proceed to supply the ones varieties of alternatives. We also are running to boost up our skill to get transmission constructed, having a look at alternative ways of creating or designing transmission to boost up general building. Our partnership with Quanta provides us a aggressive benefit to seek out inventions for pace.

That is all about getting our consumers attached as immediate as imaginable and dealing with them on the place they need to be brief time period and longer term with their energy provide, making sure we’re the ones that may ship it.

David Keith Arcaro: Thank you, that is smart. Trevor, having a look on the replace relative to the incremental CapEx, to the level a few of that CapEx from the $10 billion bucket is introduced into the plan over the years, what does the fairness financing want appear to be proportionally to that?

Trevor Ian Mihalik: We have now a robust running money drift style and we’re forecasted to generate over $47 billion of running money flows over this five-year length. To fund the expansion, we can use a complete vary of financing gear, together with hybrids and different equity-like tools, structured financing, and expansion fairness. We need to make the most of optimum marketplace stipulations and fund the plan in a balanced and shareholder-friendly method. I’m really not hostile to issuing accretive expansion fairness. Normally, within the {industry}, fairness content material for CapEx is round 30% to 40%. What we introduced these days with the $6 billion is handiest 18% fairness content material, underscoring our balanced manner.

You’re going to see us proceed to have a look at the timing of when that $10 billion rolls out over the plan and the technique by which we finance it. On web page 19 of the presentation, you are going to see we had $1 billion of ATM in 2026, of which $665 million is already issued, then not anything in 2027, and ATM at $1 billion a 12 months in each and every of 2028, 2029, and 2030, with only a modest quantity of expansion fairness within the again finish of the plan. This provides us flexibility in how we can finance the incremental $10 billion or what we in the end roll out at the 3rd quarter name.

We can make sure that we’re doing this in an excessively disciplined means as we finance those alternatives.

Operator: Our subsequent query will come from the road of Richard Sunderland with Truist Securities. Please pass forward.

Richard Sunderland: Excellent morning, and thank you for the time these days. I sought after to select up a few the sooner subject matters round PJM however flip it to the SPP aspect. You spoke to development there at the load entrance, however how are you viewing SPP as an entire and what it could imply for SWEPCO and proceeding load passion there?

William J. Fehrman: We have now an excessively an identical view of SPP in regards to the focal point on getting load attached to era. SPP has been extra competitive in getting after those problems. We have now had higher good fortune in SPP. They have got made filings at the ARRIS program and such. This can be a little bit higher there in regards to having the ability to get our era attached and transferring ahead. We nonetheless need to be sure we’re staying on best of this as a result of each software attempting to do that has the similar problems. We’re going to interact extra, do away with possibility, and get our consumers attached as briefly as we will.

Richard Sunderland: Were given it. Turning to a broader subject round transmission, you may have had numerous statement on what you might be doing there. What do you notice at the coverage aspect as wishes for transmission? There was numerous focal point lately round some FERC movements somewhere else. Do you suppose there are alternatives at the transmission aspect that transcend the engineering and building efforts you spoke to previous?

William J. Fehrman: On transmission, there are keys round accelerating right-of-way acquisition and addressing provide chain. With our measurement and scale, we’re neatly forward on our provide chain and procurement for those initiatives all over this plan. I’m assured we’ve got what we want to get those carried out. Within the regulatory surroundings, in my discussions with the states on the coverage point, they’re very supportive of transmission. They know transmission paperwork the spine for financial building and that with out a sturdy transmission gadget, their financial building will, in some instances, be muted. We have now had nice luck on transmission each at the regulated and aggressive aspect.

We have now an outstanding dating with Quanta, so we all know we’ve got the hard work to construct it. We’re deploying very cutting edge designs to scale back right-of-way and scale back the load of buildings. We’re attacking this with a multivalue way to proceed our management position within the operation, repairs, and building of transmission.

Operator: Our subsequent query will come from the road of Nicholas Joseph Campanella with Evercore ISI. Please pass forward.

Nicholas Joseph Campanella: Excellent morning. Trevor, I sought after to dig in at the expansion fairness percentage on slide 19. Will we take into accounts the kind of $3 billion of expansion fairness as company, or is that contingent upon the CapEx tempo? How will have to we take into accounts that transferring ahead in 2028 via 2030?

Trevor Ian Mihalik: That $3 billion on the again finish of the plan is tied to the $78 billion CapEx plan. A large number of the uplift we added these days with the $6 billion is within the again part of the plan when the ones bucks will come via. I might say it’s beautiful company as a result of we really feel very assured concerning the CapEx plan, and that is what we might want to finance it. The excellent news is we want it within the 2028 to 2030 length. We have now been interested by getting the ATM carried out this 12 months—getting that $665 million carried out.

From my viewpoint, fairness isn’t a lot of a topic at this time in strengthen of the $78 billion five-year capital plan, and this can be a modest quantity of fairness relative to the expansion plan.

Nicholas Joseph Campanella: Were given it. Thank you. And as we take into accounts the prospective uplift we would possibly see with the 3rd quarter replace to the CapEx plan, we’ve got noticed a horny constant breakdown between transmission and era. Given the statement surrounding pace to marketplace, is it truthful to think that breakdown persists, skewed a bit of extra towards transmission?

Trevor Ian Mihalik: I feel that may be a secure assumption. Whilst $33 billion of the capital plan is related to transmission at this time, we proceed to look numerous alternatives round transmission each inside of our carrier territory and competitively. William discussed the MISO alternative in Wisconsin. Other folks recognize that American Electrical Energy Corporate, Inc. is differentiated as the biggest transmission owner-operator and the pioneer of the 765 kV gadget. That may be a aggressive benefit for us. On the identical time, with 63 gigawatts of load expansion throughout our footprint, era could also be essential. We have now been competitive in securing turbine slots and transferring the ones into the making plans cycle.

We’re excited to roll out the up to date capital plan at the 3rd quarter name. I had to replace no less than the $6 billion these days and, as a result of we’ve got discussed the Piketon challenge in addition to Wyoming, discuss to that $10 billion, which, as I stated in my ready remarks, is rather conservative.

Nicholas Joseph Campanella: Nice. Thank you, guys.