American Electric Power (AEP) shareholders on April 21 heard at the company's annual meeting about various plans for the company, including the retirement of nearly 6,600 MW of coal-fired generation over the next couple of years.
AEP continues to deliver shareholder value through a long-term growth strategy focused on investment in the company's core regulated operations, said Nicholas K. Akins, AEP's chairman, president and CEO, at the annual meeting in Columbus, Ohio, where the company is headquartered.
"By investing in our core, regulated businesses, controlling costs and making process improvements, we've achieved consistently strong financial results and provided value for our shareholders," Akins said. "AEP was one of the top five best-performing utility stocks in 2014, and our shareholders received a total return of 35 percent, exceeding the total returns for both the S&P 500 Electric Utilities Index and the S&P 500. We also rewarded shareholders in 2014 with a dividend increase of 6 percent on an annual basis."
AEP's earnings growth strategy includes leveraging its century of transmission expertise to support the nation's changing generation mix and make the transmission grid more efficient and resilient.
AEP's Transmission Holding Co. business grew by more than $1 billion in 2014 to a total of $2.7 billion in net assets and contributed 31 cents per share to earnings in 2014. The company plans capital investments of about $4.8 billion in its regulated transmission businesses over the next three years.
AEP also started construction of its new, patented BOLD (Breakthrough Overhead Line Design) transmission line that increases the efficiency and power transport of transmission lines while also enhancing their visual appearance and reducing their physical footprint.
AEP also continues to diversify its overall generation fleet. AEP will retire nearly 6,600 MW of coal-fueled generating capacity in 2015 and 2016 due to environmental regulations and market conditions, and will increase its use of natural gas, renewables and energy efficiency resources.
Future generation investments will be focused on natural gas and renewables. AEP is currently converting coal-fueled generating units in Kentucky (Unit 1 at Big Sandy) and Virginia (Clinch River) to natural gas. AEP's Indiana Michigan Power utility added 200 MW of wind generation to its energy mix in 2014 and recently received approval to build 16 MW of utility-scale solar generation.
As an example of planned coal shutdowns, AEP Generation Resources (AEPGR) said in an annual Environmental Compliance Plan filed April 8 at the Public Utilities Commission of Ohio that several coal units are due to be shut by June 1, following other coal units that have already been shut. It noted that in February 2012, AEP Ohio retired the 450-MW Sporn Unit 5 and in December 2012 the 165-MW Conesville Unit 3. AEPGR will retire nearly 2,500 MW of generating capacity by June 1, 2015. Those upcoming coal shutdowns are:
· Kammer Units 1-3, Moundsville, W.Va., 630 MW;
· Muskingum River Units 1-5, Beverly, Ohio, 1,425 MW;
· Beckjord Unit 6, New Richmond, Ohio, 53 MW (represents AEP's share of the co-owned unit's capacity);
· Picway Unit 5, Lockbourne, Ohio, 100 MW; and
· Philip Sporn Units 2 and 4, New Haven, W.Va., 300 MW.
At the April 21 meeting, AEP shareholders elected 12 directors. Directors re-elected to the board are:
· Nicholas K. Akins, 54, of Dublin, Ohio;
· David J. Anderson, 65, of Greenwich, Conn.;
· J. Barnie Beasley Jr., 63, of Sylvania, Ga.;
· Ralph D. Crosby Jr., 67, of McLean, Va.;
· Linda A. Goodspeed, 53, of Crestview, Fla.;
· Thomas E. Hoaglin, 65, of Columbus, Ohio;
· Sandra Beach Lin, 57, of Flower Mound, Texas;
· Richard C. Notebaert, 68, of Chicago;
· Lionel L. Nowell III, 60, of Marco Island, Fla.;
· Stephen S. Rasmussen, 62, of Columbus, Ohio;
· Oliver G. Richard III, 62, of Lake Charles, La.; and
· Sara Martinez Tucker, 59, of Dallas.
American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5.3 million customers in 11 states. AEP ranks among the nation's largest generators of electricity, owning nearly 38,000 MW of generating capacity in the U.S. AEP also owns the nation's largest electricity transmission system, a 40,000-mile network that includes more 765-kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP's transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas.
AEP's utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Co. of Oklahoma, and Southwestern Electric Power (in Arkansas, Louisiana and east Texas).