Q4 2024 American Electric Power Company Inc Earnings Call
Good morning, my name is Audra and I will be your conference operator today. At this time, I would like to welcome everyone to the American Electric Power 4th Quarter 2024 Earnings Call. Today's conference is being recorded.
Speaker Change: Thank you Darcey and good morning, everyone welcome to our fourth quarter 2024 earnings call. Let me start by saying that after six months on the job I continue to get more excited about the very strong and comprehensive AEP value proposition. Our future is extremely bright and we are committed to delivering on our promises to customers regulators and inverse.
Speaker Change: <unk> by putting a robust capital plan to work we are building a platform of success by focusing on execution and accountability. These are exciting times at AEP and I see incredible value in this company, which I am confident we can further unlock by advancing our long term strategy and providing safe affordable and reliable service across our large footprint.
Speaker Change: Before we jump into our results I'd like to start by introducing our new CFO Trevor Mahalik, who joined AEP last month and is on the call with me today.
Speaker Change: Trevor is a proven leader in an industry veteran who has hit the ground running and is already considered a very strong disciplined and focused member of our senior leadership team.
Speaker Change: I've made a number of changes over the last six months to streamline our leadership structure by eliminating management layers, reorganizing and reducing the size and scope of the service corporation and improving procurement processes to drive much higher value from suppliers.
Speaker Change: The leadership team is coming together to make AEP, a premium traded utility that is highly respected and trusted by our many stakeholders lastly, I'd like to take a moment to thank Chuck <unk> for his more than 25 years of dedicated service to AEP. We're.
Speaker Change: We're grateful for his steady hand during the transition and we will continue to benefit from his expertise until his well earned retirement in March.
Speaker Change: In my remarks. This morning, I will discuss our strategic focus and our results at a high level before passing it over to Trevor to walk through our financials in more detail.
Trevor Mahalik: Today, we announced fourth quarter 2020 for operating earnings of $1 24 per share or $660 million, bringing our full year 2020 for operating earnings to $5 62 per share.
Trevor Mahalik: Recall as part of our commitment of continuing to deliver value to our shareholders last October we increased the quarterly dividend from 88 to 93 per share.
Trevor Mahalik: In addition today, we are reaffirming AEP is 2025 operating earnings guidance range of $5 75 to $5 95 per share and affirming our long term operating earnings growth rate of 6% to 8% all reinforced by our robust $54 billion capital plan from <unk>.
Trevor Mahalik: 25 through 2029.
Trevor Mahalik: As we have talked about previously and committed to a strong balance sheet and I believe it is critical to funding our robust capital plan we.
Trevor Mahalik: We will responsibly financed the great opportunities ahead of us from a position of strength.
Trevor Mahalik: Trevor will address this further in his remarks, we will also be disciplined around portfolio management. In fact last month, we announced the Ohio and INR minority interest transaction on the transmission business with KKR and PSP investments for 282 billion.
Trevor Mahalik: The transaction is highly accretive at two three times rate base and valued at 33 times price to earnings it puts us into another perspective. This is equivalent to issuing AEP common stock at $170 per share. Moreover, in the last couple of weeks, we filed for approval with FERC and we.
Trevor Mahalik: To close in the second half of 2025 at which time, we will still retain 95% of Aep's total transmission assets.
Trevor Mahalik: The proceeds from this transaction allow us to rotate capital into investments that benefit our customers as we enhance reliability and deliver on growing energy demand.
Trevor Mahalik: In addition to the minority interest transaction, we also recycled almost $5 billion in net cash proceeds in 2024 through the sale of the new Mexico renewable development solar portfolio and distributed resources business.
Trevor Mahalik: We continue to work with federal policymakers state legislators and regulators across our large service footprint to determine what their goals are so we can relentlessly deliver on them.
Trevor Mahalik: I'd also like to spend some time this morning walking through Aep's future growth opportunities, which are underpinned by four major drivers large load in our service territories, including data center load that we appreciate having the chance to serve and are aggressively pursuing.
Trevor Mahalik: Economic development efforts in our states investment across the system in our transmission and distribution infrastructure and new generation.
Trevor Mahalik: Our capital plan includes customer commitments for 20 Gigawatts of incremental load by 2030, driven by data center demand re shoring and manufacturing and continued economic development. In fact, largely impacts are already being felt in many of AEP service territories, especially in Ohio, Texas and Indiana.
Trevor Mahalik: As demonstrated in our fourth quarter results, we experienced commercial loan growth of 12, 3% over the fourth quarter and 10, 6% growth on the full year compared to 2021 of the reasons. We are seeing such growth now that we have an advanced transmission system that can help support current large loads, which is <unk>.
Trevor Mahalik: Significant advantage for us versus our peers as.
Trevor Mahalik: As we execute on our $54 billion capital plan to support customer needs affordability remains top of mind and we are committed to fair cost allocations associated with large loads.
Trevor Mahalik: We proactively filed the datacenter tariff in Ohio, and large low tariff modifications in Indiana, Kentucky, and West, Virginia, and we look forward the commission decisions in Indiana, and West Virginia on both states unanimous settlements in the near future.
Trevor Mahalik: The datacenter tariff hearing in Ohio concluded last month, we should have a commission decision by the third quarter of this year.
Trevor Mahalik: In addition to our efforts to support load growth, our current capital plan contemplates sustained and substantial investments across our distribution infrastructure to better meet our customers' energy needs and improve customer service.
Trevor Mahalik: Since the EPS distribution system is one of the nation's largest at approximately 225000 distribution miles. These efforts include work to harden, our replace Poles conductors transformers and other assets as well as deploy automated technologies like Ami meters in grip smart for enhanced.
Trevor Mahalik: Operational performance.
Trevor Mahalik: In total we are investing more than $13 billion over the next five years in these areas to improve reliability and reduce both frequency and duration of outages by advancing these initiatives as well as an aggressive vegetation management program, we will increase customer satisfaction strengthen our systems' resilience to weather it.
Trevor Mahalik: Vince and reduce cost for operations and maintenance.
Trevor Mahalik: Demand for power is growing at a pace not seen over my 44 years in this business as we discussed last quarter meeting this demand could require incremental investment of up to $10 billion.
Trevor Mahalik: Driven by additional transmission distribution and generation infrastructure not included in our current 54 billion capital plan. For example in our three primary <unk>, we see an opportunity of approximately $4 billion to $5 billion.
Trevor Mahalik: Of incremental transmission awards recently approved or expected to be approved in the near term with additional upside on other initiatives.
Trevor Mahalik: The remainder of the $10 billion of incremental capital upside as in transmission distribution and generation infrastructure across the business and.
Trevor Mahalik: In addition, as Youll recall in November we announced a partnership with Bloom energy related to fuel cells. Our current capital plan does not include any investment in this custom solution, which will enable our large customers to quickly power their operations, while the grid is built out to accommodate further demand.
Once the necessary infrastructure is connected to these large customers. They can use that fuel cells as backup generation further adding resiliency to their operations.
Trevor Mahalik: This demonstrates our commitment to finding innovative customer solutions that lead to empower up much quicker, allowing their business to deliver service to their customers, which will generate profits much sooner than waiting for a grid connection as a matter of fact, just this week AEP, Ohio filed with the Ohio Commission for approval of the first two customer.
Trevor Mahalik: <unk> using this fuel cell technology totaling 100 megawatts.
Trevor Mahalik: Not only is AEP working to bring solutions tailored to the current power needs of our states, but we are a leading efforts in the industry on the potential that small modular reactors or <unk> have to meet the growing needs of the future.
Trevor Mahalik: We're looking to partner with the U S Department of energy to support the early site permit process for two potential <unk> locations, one in Indiana and the other in Virginia.
Trevor Mahalik: We are laying the groundwork to find solutions to support large loads and are fortunate for the opportunity to build these <unk>, but only with appropriate risk sharing the tech companies are fast movers, and AEP will be there to support them with whatever technology solution they want to deploy it.
Trevor Mahalik: We need to ensure that we are protected and compensated.
Trevor Mahalik: Moving onto regulatory over the last six months I visited 10 of our 11 states and have been actively engaged with various stakeholders listening to their preferences as we invest more in resources at the local level.
Trevor Mahalik: I firmly believe that by delivering for our states and the customers who live there we can over time improve our earned Roes and increased equity layers as states are more receptive to the need to attract capital. It is an absolute imperative that AEP listen closely to our states and then aggressively deliver on the agreed upon commitments that's my promise to them.
Trevor Mahalik: When I look at 2024 and review our operating companies achieved a number of positive regulatory developments, including received constructive base rate case outcomes in Indiana, Michigan, and Oklahoma, Texas and Virginia obtain.
Trevor Mahalik: Obtained commission approval of the Ohio Electric Security plan.
Updated formula rates in Arkansas and Louisiana.
Trevor Mahalik: Filed system resiliency plans in both of our operating companies in Texas.
Trevor Mahalik: As we discussed on our last call <unk> filed its base case in West, Virginia, while offering securitization as a concept to help mitigate the proposed base rate increase.
Trevor Mahalik: <unk> testimony in this case is set for April with rebuttal testimony following in May and hearings set to start in mid June of this year, we look forward to working with everyone involved in this case to achieve a positive outcome for both our customers and our shareholders ship.
Trevor Mahalik: Shifting now to our generation fleet, we previously filed for approval of <unk> Green country 795 megawatt natural gas facility <unk>, new homes built 450 megawatt natural gas plant as well as swap codes Welsh 1053 megawatt natural gas conversion project.
Trevor Mahalik: These facilities and Rfps, which are currently in progress at Opco A&M and DSO. In addition to future integrated resource plan filings over the next couple of years in Arkansas, Kentucky, Indiana, Michigan, Virginia, and West Virginia support our capacity obligations and we will go a long way in meeting our customers' energy needs.
Trevor Mahalik: In summary, we're engaged with key stakeholders on the regulatory front as we keep affordability system reliability resiliency and security top of mind I am excited to start the new year, having made meaningful progress and will continue these important efforts as we advance on our commitment to excellence and deliver on what our state's one.
Trevor Mahalik: Close by thanking everyone at AEP for their hard work and dedication in 2024 <unk>.
Trevor Mahalik: I am energized as we enter 2025 with a strong team and a more streamlined structure that are significantly driving efficiencies, reducing bureaucracy and creating a much more nimble company that can quickly execute on opportunities. We're also having our employees who have been working from home returned to the office full time by June <unk>.
Trevor Mahalik: To put all hands on deck with a renewed focus on execution and accountability that will serve us well as we advance our strategic priorities to enhance value for our stakeholders with that I'll now turn it over to Trevor.
Trevor Mahalik: Thank you Bill and good morning to everyone on the call.
Trevor Mahalik: Want to start today by thanking Bill and the board for placing their trust in me to help lead this organization into a bright and exciting future.
Trevor Mahalik: I am honored and grateful for the opportunity to join a dynamic team that is focused on positioning the company for future success.
Trevor Mahalik: And I'm committed to building on our momentum to create value for all of our stakeholders.
Trevor Mahalik: As part of my transition I have reviewed Aep's financial and capital plans and I have confidence in executing on them with this team to.
Speaker Change: Today, I will walk us through the fourth quarter and full year results for 2024 expand on Bill's comments related to load growth and discuss what we expect to see in the years ahead.
Speaker Change: I'll finish with commentary on credit metrics liquidity and portfolio management.
Speaker Change: As well as my focus on disciplined capital allocation.
Speaker Change: Please turn to slide seven.
Speaker Change: This slide shows the comparison of GAAP to operating earnings for the quarter and year to date periods.
Speaker Change: GAAP earnings for the fourth quarter were $1 25 per share compared to <unk> 64 per share in 2023.
Speaker Change: GAAP earnings for the year were $5 60 per share compared to $4 26 per share in 2023.
Speaker Change: Detailed reconciliations of GAAP to operating earnings are shown in the appendix on slides 25 and 26.
Next I will briefly cover fourth quarter operating results before moving on to a more detailed walk through of our year to date results by segment.
Speaker Change: Fourth quarter operating earnings came in at $1 24 per share, which was <unk> <unk> improvement versus the prior year.
Speaker Change: We saw 22 cents of incremental rate changes across multiple jurisdictions, along with higher normalized retail sales at both the vertically integrated and transmission and distribution segments.
Speaker Change: Partially offsetting these favorable drivers were higher O&M and lower margins at the generation and marketing segment.
Speaker Change: For reference the full details of our fourth quarter results are shown on slide 22.
Speaker Change: Moving on to slide eight let's have a look at our year to date results.
Speaker Change: Operating earnings for 2024 totaled $5 62 per share compared to $5 25 per share in 2023.
Speaker Change: This was an increase of 37 per share or about 7% year over year, adding to aap's long track record of delivering on its financial commitments for our investors.
Speaker Change: Looking at the drivers by segment operating earnings for vertically integrated utilities were $2 63 per share up 16% from a year earlier.
Speaker Change: Positive drivers included rate changes across multiple jurisdictions notable outcomes in Virginia, and Indiana, and a return to a relatively normal weather in 2024 compared to the mild weather experienced in 2023.
Speaker Change: These items were partially offset by higher depreciation and higher O&M as we made investments to serve our customers the transmission and distribution utility segment earned $1 51 per share up 21 from last year.
Speaker Change: We'll drivers in this segment included increased rates in Texas, and Ohio increased transmission revenue at <unk>.
Speaker Change: <unk> year over year change in weather and higher normalized retail sales.
Speaker Change: Partially offsetting these items were increased property taxes depreciation interest expense and O&M.
Speaker Change: The AEP transmission Holdco segment contributed $1 51 per share up <unk> <unk> from last year our continued.
Speaker Change: <unk> investment in transmission assets as the new loads are added to our system with the main driver in this segment.
Speaker Change: Generation <unk> marketing produced 48 per share down <unk> 11 from last year.
Speaker Change: The reduced contribution from this segment was primarily driven by the sale of our universal scale assets in the third quarter of 2023 higher income taxes, and lower retail energy margins.
Speaker Change: These items were partially offset by lower interest expense and higher wholesale margins.
Speaker Change: Finally core.
Speaker Change: Corporate and other saw benefit of <unk> <unk> per share driven by lower income taxes, and O&M, which are partially offset by higher net interest expense.
Speaker Change: As Bill mentioned earlier, we are reaffirming our operating earnings guidance range for 2025 or $5 75 to $5 95 per share.
Speaker Change: For convenience we have included an updated waterfall bridging our actual 2024 results to the midpoint of our guidance for 2025 on slide 20.
Speaker Change: While some variances changed due to the 2020 for actual results. There is no change to our 2025 segment or overall guidance.
Speaker Change: Turning to slide nine.
Speaker Change: You can see more evidence of just how important load growth as to our financial story.
Speaker Change: Weather normalized sales grew 3% in 2024, and we expect that to nearly triple in the years ahead.
Speaker Change: These are exciting times in the utility industry as we incorporate this tremendous growth as.
Speaker Change: As Bill mentioned the load growth that I'm going to talk about is providing the opportunity to potentially add up to $10 billion of incremental capital over the next five years to our already sizeable $54 billion plan.
Speaker Change: We are continuing to evaluate the magnitude and timing of this spend to meet the growth opportunities across our footprint.
Speaker Change: The gains we are seeing from the data centers and industrial customers represented at once in a generational opportunity to shape and grow the system.
Speaker Change: So before I jump into the details I want to emphasize a few key points about our confidence in the projections you see here.
Speaker Change: This isn't just a future story. This is a now story, we're already seeing these loads come online across our system and.
Speaker Change: In December of 2024, we added almost 450 megawatts of Hyperscale data center load in Ohio alone.
Speaker Change: Second the loan additions built into the forecast you see here are all backed by signed customer financial obligations demonstrating their commitment to bring these projects online.
In fact, nearly all of these loans are backed by take or pay contracts and have already been accepted by certain <unk>, including PJM.
Speaker Change: This means that our customers are committed to pay for a minimum amount of power over a period of time.
Speaker Change: What's more we've achieved tariff settlements in Indiana, Ohio, and West, Virginia to strengthen and lengthen those commitments even further.
Speaker Change: Beyond those contracts, we have substantial interconnection queues waiting to sign additional commitments as well.
Speaker Change: Diving a little further into the details you can see where the bulk of our growth is concentrated new data centers drove double digit growth in our commercial sales in 2024.
Speaker Change: With system wide data processing load hitting a new high in December of $1 3 million megawatt hours.
Speaker Change: The gains are expanding beyond the transmission and distribution utilities into our higher margin vertically integrated segment <unk>.
Speaker Change: Recently, we also connected the first of several Hyperscale data center customers in Indiana, including AWS and Google.
Speaker Change: Across the entire system.
Speaker Change: We're contracted to see nearly five gigawatts of data processing load come online in 2025, representing almost a 25% increase from 2024.
Speaker Change: Beyond commercial load our industrial sales are also set to accelerate after a resilient 2024.
Speaker Change: Aep's industrial load grew by more than 402000 megawatt hours last year.
Speaker Change: This was punctuated by growth of almost 5% in Texas, highlighting the diversity of our service territory, and giving us a lot of confidence going into the new year.
Speaker Change: We expect industrial sales growth to more than double in 2025 as several new large customers are contracted to come onto the system like Cheniere in Texas.
Speaker Change: We also have several other large and well publicized industrial projects set to come online in 2006 and 27.
Speaker Change: More detailed load projections by class can be found on slide 13.
As a reminder, we have more than 20 gigawatts of commercial and industrial load additions contracted to come onto our system through the end of the decade roughly.
Speaker Change: Roughly half of those are in ERCOT and the other half are spread across our PJM companies.
Speaker Change: As a result, we expect these quarterly sales numbers to continue their rapid growth for several years to come.
Speaker Change: Let's move on to slide 10 to discuss the company's capitalization and liquidity.
Speaker Change: Our financial performance and strong balance sheet provided good credit metrics for the last 12 months.
Speaker Change: Our debt to capitalization remained largely consistent with our historical range.
Speaker Change: Our <unk> to debt metrics stood at 14% for the 12 months ended December 31.
Speaker Change: Which was within our target range and well above our downgrade threshold of 13%.
Speaker Change: Available liquidity remained very strong at $4 6 billion and is supported by $6 billion and credit facilities.
Speaker Change: Our strong balance sheet and credit metric results, coupled with ample liquidity and the outcome of the minority interest transaction expected to close in the second half of this year have enhanced our financial flexibility.
We can efficiently access the capital markets to support the capital needs in front of US we are committed to maintaining a strong balance sheet and credit metrics as we evaluate the upcoming capital spend opportunities and match them with optimal financing instruments.
Speaker Change: On a similar note last week I spoke directly with all three rating agencies and conveyed this leadership team's commitment to a strong balance sheet focus on executing the regulatory and financing plans as well as disciplined allocation of O&M and capital to our companies.
Speaker Change: Finally, let's move onto slide 11.
Speaker Change: Before we take your questions I wanted to summarize what you heard from us today.
Speaker Change: First <unk>.
Speaker Change: <unk> heard we had a strong year over year performance in 2020 for growing our earnings roughly 7% with operating earnings coming in at $5 62 per share.
Speaker Change: We reinforced our commitments to stakeholders and built solid momentum heading into 2025.
Speaker Change: Second you heard that we are absolutely focused on execution in 2025 to support one of the great load growth stories in our industry.
Speaker Change: We're executing on strategic investments and delivering on our regulatory strategy, giving us confidence in our financing plans.
Speaker Change: <unk> you heard we have $10 billion of incremental growth capital that we are currently evaluating.
Speaker Change: And fourth you heard that the $2 $82 billion pending minority interest transaction on the transmission assets is an exceptional value proposition to our shareholders.
Speaker Change: The transaction further boosts, our earnings and credit profiles and helps to reduce near term equity needs.
Speaker Change: Recall that the value we transacted on this is comparable to issuing equity at a $170 per share and were still retained 95% of Aep's total transmission asset post close.
Speaker Change: These components are key to our future success and reinforce our confidence in reaffirming our commitments, including our 2025 guidance range of $5 75 to $5 95 per share our long term growth rate of 6% to 8%, while targeting <unk> to debt of 14% to 15%.
Speaker Change: We really appreciate your time and attention today I'm going to ask the operator to open the call. So we can answer any of your questions that you may have thank you.
Speaker Change: Thank you we will now begin the question and answer session. If you have dialed in I would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question simply press Star one again.
Speaker Change: We will take our first question is from sharp for Rosa and Douglas.
Speaker Change: <unk> partners.
Speaker Change: Hey, guys good morning.
Speaker Change: Good morning Shar.
Speaker Change: <unk>.
Speaker Change: Just on the balance sheet, the 46% to 40 to 60 basis points of <unk> improvement you highlight that kind of on the slides is a near term target can you sustain that over the plan.
Speaker Change: Then on equity any sense on the means of issuing the remaining $2 5 billion is the juniors is it asset optimization a block.
Speaker Change: Bill in your comments you did highlight portfolio management in your prepared remarks, but just wanted to get a sense on that remaining equity as well.
Speaker Change: Yes, sure so here's Trevor.
Trevor Mahalik: <unk> the question.
Trevor Mahalik: We are targeting <unk> to debt in that 14% to 15% range.
Trevor Mahalik: And again from our perspective that is a target that we're looking at.
Trevor Mahalik: You'll note that we are going to have a revision to the way that Moody's calculates.
Trevor Mahalik: The deferred fuel so we will drop down probably 40 50 bps 60 bps.
Trevor Mahalik: Depending on.
Trevor Mahalik: Where things go with that which I think it's going to happen.
Speaker Change: But again, that's going to be above the 13% threshold and again from our perspective, both bill and I are very focused on issuing.
Speaker Change: Executing on the $54 billion capital plan with a strong balance sheet. So I think what youll see is us will dip down a little bit in the current year, and then really the deferred fuel issue kind of rolls off by 2026 and.
Speaker Change: And so from that perspective.
Speaker Change: We're really focused on getting that in that 14% to 15% range in the near term.
Speaker Change: And then getting to your financing question again like you said, we put out that.
Speaker Change: 535 billion of equity needs.
Speaker Change: Last year and kind of talked about that at <unk>. The good news is with this transaction the $2 $8 billion goes a long way to solving that so that really leaves then like you said the $2 5 billion of which there is call it $500 million over the five year period of $100 million a year.
Speaker Change: On the drip. So then it's a very manageable 2 billion.
Speaker Change: And then looking at various things that we have here to solve for that there is potential securitization that we're continuing to work on and some of our locations.
Speaker Change: But we will also utilize hybrids or other equity like instruments, and then if we need to issue equity, we could do that and I'm not opposed to issuing equity for growth and we have a growth plan that is incredible here.
Speaker Change: Especially articulating around that incremental $10 billion.
Speaker Change: But we want to be very judicious with issuing equity, but we think theres a lot of different levers that we can pull securitization hybrids and then potentially over the longer term. If we had to issue incremental equity we would consider that but again very focused on <unk> to debt.
Speaker Change: And also executing on this kind of historic $54 billion growth plan.
Speaker Change: Perfect and then just lastly, obviously a lot of load growth and you guys have that new capex upside disclosures, specifically on the 20 gigs of load you're leaning on just wanted to get a sense on how much of that is Ohio and on the dual tariff settlements that are out there kinder differences be bridge and what if the commissions order swings against you settle.
Speaker Change: I know bill you have been very active on the stakeholder engagement side, just wanted to get a sense there. Thanks.
Speaker Change: So we're very obviously focused on the.
Speaker Change: On the rate case and on the tariff filing for Datacenters.
Speaker Change: Lot of discussion going on we're clearly looking to try and find a solution for bringing these folks into our system and bringing the economic development opportunities with us and so.
Speaker Change: We're continuing to look if you think about the datacenter story that we have.
Speaker Change: In December alone AEP, Ohio added nearly 450 megawatts of data center load from AWS in meta. So very strong looking ahead, we anticipate adding similar amounts of load almost every month through 'twenty five.
Speaker Change: Got over $4 seven gigawatts of data processing load contracted to begin service this year.
Speaker Change: And then while most of this load to your point is concentrated in Ohio, and actually Texas. We also have nearly a gigawatt contracted to come online in Indiana, So thats extending our growth into the vertical integrated utility segment as well so.
Speaker Change: I would note that both Google and AWS are recently begun servicing Indiana, So thats, a very positive for us and they're going to continue to ramp up progressively over the next over the next several years. So this growth certainly underscores our commitment to economic development and highlights the significant opportunities ahead, but.
Speaker Change: Clearly, we're going to make sure that this.
It doesn't fall on the.
The shoulders over our existing customers and make sure that the appropriate parties, who are driving the incremental cost will pay for the incremental cost.
Speaker Change: Perfect.
Speaker Change: Big Big Congrats to you in the AEP team I know youre going to do really fantastic, they're so big congrats on phase II.
Speaker Change: I really appreciate that excited to be here.
Speaker Change: It is an incredible story and quite the team here. So thank you.
Speaker Change: Great. Thanks, guys.
Speaker Change: Okay.
Speaker Change: We'll move next to Ross Sandler with Bank of America.
Ross Sandler: Good morning.
Speaker Change: <unk>.
Speaker Change: Trevor welcome welcome to AEP.
Speaker Change: Thanks Ross.
Speaker Change: I just want to dig into maybe the datacenter tariffs you talked about sort of.
Speaker Change: Protecting yourself around sort of stranded cost risk or minimum take risk. So.
Speaker Change: In that caris.
Speaker Change: Have you disclosed what that rate is versus maybe other industrial commercial rates.
Speaker Change: Like a minimum power take requirement. It's in there what kind of terms are you looking at in.
Speaker Change: And those tariffs that you filed.
Speaker Change: So the tariffs are really driven by the cost of the incremental.
Speaker Change: Project and so.
Speaker Change: <unk>.
Speaker Change: Theres not a specific say.
Speaker Change: Say price in the tariff list until we understand what the cost of the incremental load is going to be or the incremental transmission is going to be to serve that load and so it really is a case.
Speaker Change: For us to protect the existing customer base in that.
Speaker Change: The driver behind the data center.
Speaker Change: Cost will be covered essentially by the company.
Speaker Change: Thats requiring it so.
Speaker Change: We feel very good about where we sit I would say there are a couple of differences.
Speaker Change: In the tariffs if you look across the states for instance in Ohio.
Speaker Change: That tariff is very much focused on data centers, whereas if you look at the similar proposal in Indiana that is a broader tariff that would apply to any and all large loads that are similar to a data center. So some some minor differences across the states, but generally.
Speaker Change: The same purpose holds which is.
Speaker Change: Makes the customer who is driving the incremental cost pay for the incremental cost and put it in place for a longer period of time so that.
Speaker Change: We know as we're building out this.
Speaker Change: Incredible investments at.
Speaker Change: If the customer goes away in year, six or seven we still have coverage for some of those costs and that's not stranded placed on the shoulders of our existing customers. So very very positive outcome for us I think.
Speaker Change: It sets us up and I don't think that.
Speaker Change: Uh huh.
Speaker Change: It's been a detriment to the economic growth we have if you look at the overall <unk>.
Speaker Change: Increases that are already signed up.
Speaker Change: We have significant growth.
Speaker Change: In accordance with these tariffs so very very very strong interest still even though these tariffs are going into place.
Speaker Change: That's great Bill. Thank you and then Trevor maybe one for you you mentioned securitization as a avenue for maybe some of that equity need.
Speaker Change: <unk> scaling of that versus the $2 billion, even in the current plan or have you have you sort of walk through all of that yet.
Speaker Change: Yes, we're still working through that with the various states Ross, but honestly I think you could look at it and securitization could.
Speaker Change: If successful could potentially be a big chunk of that remaining $2 billion. So.
Speaker Change: Right now with you the way I think of it as we kind of laid out the $5 $35 billion over a five year period to $2 8 billion from the sale transaction.
Speaker Change: Really takes care of a big chunk of that in the immediate term here and then we have a lot of other levers to pull over the remaining four years of the plan to solve for that that $2 billion, but securitization could be if successful.
Speaker Change: Ah.
Speaker Change: A real win because it could help the customers with regards to.
Speaker Change: Two rates, but it can also help us with regards to the need for.
Speaker Change: The cash that would fill that gap on the on the $54 billion plan that we laid out.
Speaker Change: Perfect. Thank you and then if I can squeeze one more in back to you Bill.
Speaker Change: Mentioned, <unk> and kind of how you are trying to very early stages looking at that but.
Speaker Change: Under the right risk structure.
Speaker Change: In other states, you've sort of seen like this idea where.
Speaker Change: The off taker would put in a significant proportion of the capital and take more of that risk into that project are you thinking about similar structures. There how far have you kind of walk down the thought process of what that structure would look like or might look like.
Speaker Change: Thanks. Thanks for the question, obviously very interested in <unk> as a technology and Thats really driven by the fact that our major customers are also interested in that as a solution and.
Speaker Change: As we noted we've started with the early site permit work in Indiana and Virginia.
Speaker Change: Have signed Mou with various parties to support that type of work, we did put in our tier one application with the Doe.
Speaker Change: For one of the sites in the tier two application for the other side to try and.
Speaker Change: Get some get some support for those.
Speaker Change: At a broader.
Speaker Change: Look.
Speaker Change: With regards to how we would think about this.
Speaker Change: Clearly I'm not going to put the company at risk in any type of a.
Speaker Change: Move as the first of a kind type of AV technology, and so as we've been talking with the potential customers.
Speaker Change: We haven't got to any specific arrangements or how this might look at this stage, but certainly there is discussions ongoing to see if there's a way to do this clear.
Clearly the SM more technology providers.
Speaker Change: He needs to be first and somebody needs to step up and figure out how they're going to deliver there.
Speaker Change: There are product and basket I mean, this is one of those situations where to me.
Speaker Change: Im buying a technology from somebody and it should work and it should be at a price that is very understandable and protected and so.
Speaker Change: I am very excited about.
Speaker Change: Where we sit with regards to discussions, but I would say, we're quite a ways away from having anything firmed up or really any firm structure at this point, but whatever we ultimately end up with will.
Speaker Change: We will be very principled and disciplined on our side of this to make sure that.
Our shareholders and our customers are protected from any significant types of negative outcomes.
Speaker Change: That's great. Thank you and forever congratulations again on the on the <unk>.
Speaker Change: April which is not the Brazilian appreciate it Ross Thank you.
Speaker Change: Okay.
Speaker Change: We will go next to Steve Fleishman at Wolfe Research.
Speaker Change: Okay.
Steve Fleishman: Hi, good morning.
Steve Fleishman: Congrats Trevor as well I'll, let me echo that.
Steve Fleishman: So just on the.
Speaker Change: I guess on the upside to the capital plan and particularly the transmission. So for example, there is these PJM.
Steve Fleishman: Transmission.
Steve Fleishman: Joint venture that you have and the like.
Steve Fleishman: Just being decided in the next month or so is that.
Steve Fleishman: That would be upside to the plan that's not in the plan.
Steve Fleishman: Things like that.
Steve Fleishman: Yes, Steve that's right that would be upside to the plan. So here again, what we've got is.
Steve Fleishman: The $54 billion plan that has <unk>.
Steve Fleishman: Definitive things in it and we really arent, putting things into the plan that that arent for sure and so then when you look at those $10 billion a lot of this is coming to fruition over the next.
Steve Fleishman: Kind of months here and so we're going to be pretty excited about rolling out kind of at a normal cadence on the third quarter call a revision to the $54 billion plan, but yes that would be upside.
Steve Fleishman: And Steve just to add to that.
Steve Fleishman: Yes, just to add a little bit specifically to PJM.
Steve Fleishman: You you probably know we've announced the joint planning agreements with Dominion and Firstenergy to propose those projects.
Steve Fleishman: Through the regional transmission expansion plan.
We expect PJM approval in the first quarter on those projects and so again as Trevor noted.
Steve Fleishman: All of those if they would come to fruition would be upside.
Steve Fleishman: Sure.
Steve Fleishman: Okay and then.
Speaker Change: You may have answered this trevor and I missed it but just any event.
Steve Fleishman: That you see that capital plan.
Speaker Change: Come up how should we think about funding.
Steve Fleishman: For incremental capital.
Speaker Change: Yes, so again, yes.
Speaker Change: Dave I think on the incremental capital side, we really do have a lot of positives here again with the $2 $8 billion coming in this year and that's going to set us up really well for call it roughly half of.
Speaker Change: The equity needs that we laid out before.
Speaker Change: And then with securitization and other things Thats really going to kind of take us a long way to filling that gap.
Speaker Change: At the end of the day I'm not opposed to.
Speaker Change: Issuing equity for growth and this kind of growth I think that really makes sense.
Speaker Change: But at the end of the day, there's a lot of other things that we're working on internally as we rightsize the organization.
Speaker Change: To get costs.
Speaker Change: In line with where this is going as.
Speaker Change: As well as other opportunities, we're looking at that I want to be somewhat.
Speaker Change: Careful here in how we say it.
Speaker Change: There is.
Speaker Change: Capital allocation internally looking to support this growth plan.
Speaker Change: And equity we take equity very seriously here, we know, it's very precious, but we're not opposed to issuing equity for growth purposes.
Speaker Change: Yes, okay.
Speaker Change: And then I guess.
Speaker Change: Two questions on data centers first just a high level.
Speaker Change: Curious after the deep seek kind of freak out just what kind of.
Speaker Change: Color, you're getting from your customers on their plans as anything change good or bad.
Speaker Change: In terms of.
Speaker Change: The commentary implants by the customers.
Speaker Change: Really no change in plan for us at all.
Speaker Change: It's been full speed ahead and.
Speaker Change: When.
Speaker Change: The deep sea came out.
Speaker Change: We had conversations with a number of our customers and.
Speaker Change: None of those individuals spoke in any way that we would be seeing a change and so I think at least for us I can't speak for others, obviously, but it continues to be full speed ahead.
Speaker Change: Okay, and then lastly on the Bloom.
Speaker Change: <unk> and <unk>.
Speaker Change: Just.
Speaker Change: I think you had made a firm order for the 100 megawatts since it sounds like you have customers.
Speaker Change: For that just how are you feeling about that.
Speaker Change: The likelihood to get.
Speaker Change: Into that four gigawatt.
Speaker Change: Or is it too early to kind of say.
Speaker Change: But first some really excited about the customers that we have that have taken up the first 200 megawatts that we announced when we talked about the supply agreement with Bloom last November.
Speaker Change: I feel very good about.
Speaker Change: Where we're at with those customers, it's obviously proven.
Speaker Change: That it's a viable opportunity for others to use in order to speed.
Speaker Change: Our ability to build their data centers and get online significantly sooner than waiting for perhaps five to seven years for our grid interconnect and so.
Speaker Change: I like where we're at with this technology, we're obviously on the leading edge from an innovation perspective.
Speaker Change: As Saul.
Speaker Change: Solving problems for these data centers that while others are maybe just issuing press releases were actually getting into solutions for for these folks and so.
Speaker Change: I will keep we will keep you updated obviously is our agreement with Bloom allows for further expansions up to the to the one gigawatt Mark and.
Speaker Change: Keep in mind I would note also that this potential capital outlays also not included in the current $54 billion capital plan.
Speaker Change: As we've talked about but it is part of the $10 billion incremental investment opportunity that we're currently evaluating.
Speaker Change: <unk>.
Speaker Change: Obviously, if more of that comes on we'll have more updates for you, but overall again the feedback on this innovation and solution for customers has been extremely positive.
Speaker Change: Yes.
Speaker Change: Great. Thank you I appreciate it.
Speaker Change: Thanks, Steve Thanks, Steve.
Speaker Change: We'll go next to Jeremy Tonet at Jpmorgan.
Jeremy Tonet: Hi, good morning.
Speaker Change: Good morning.
Jeremy Tonet: And Trevor congratulations as well.
Jeremy Tonet: I appreciate it.
Speaker Change: Just wanted to start off I guess picking up what the custom solutions as you outlined there being kind of a bridge solutions I was wondering if you could provide a bit more detail what it means from the AEP side potentially just if we could frame what that can look like from capex or any other way to kind of think about that.
Jeremy Tonet: No.
Jeremy Tonet: Potential and specifically just wires or other elements as well as it relates to AEP.
Jeremy Tonet: Sure.
Jeremy Tonet: Well first and foremost.
Jeremy Tonet: In the spirit of protecting.
Jeremy Tonet: Our existing customers for these deals all costs for the fuel cell projects will be covered by the large customers that are understand alone contracts with AEP and these are very customer specific and they'll need State Commission.
Jeremy Tonet: Approval and so.
Jeremy Tonet: We're very excited about how this is rolling out and the fact that each of these individual customers again will will cover the costs that are associated with the project.
Jeremy Tonet: As far as the capital side, no Trevor maybe add a little bit on that or how we're thinking about it and what I'd like to do on that Jeremy is roll that out if and when that comes to fruition, but thats all kind of part of that $10 billion upside. So we havent really disclosed specifics around that but expect more of that to come in the normal cadence.
Speaker Change: The only thing I would also add bill is that I think AEP has had a rich history of being an innovator in this industry, whether it's being the first to kind of have 765 kv lines. All the way to this solution to help our commercial and industrial load come on.
Speaker Change: With this balloon solution, but as Bill said, we're going to do it in a very disciplined way.
Speaker Change: And kind of talks to what AEP has done over the years to be a leader.
Speaker Change: Okay.
Speaker Change: Got it thank you for that and.
Speaker Change: Just pivoting here to West Virginia, if he could just wondering if you could provide any incremental color on stakeholder conversations and just the state of I guess.
Speaker Change: Stakeholder relationships in the state at this point and how that has evolved over time.
Speaker Change: Really appreciate that question I have been very focused on west Virginia since joined AEP last August.
Speaker Change: I spent a considerable amount of time in the state in talking with.
Speaker Change: Key stakeholders, including the prior administration as well as members of the of.
Speaker Change: Of the current administration.
Speaker Change: I would say that.
Speaker Change: Right now.
We were very innovative again in the in the filing that we put in.
Speaker Change: We we corrected the deficiencies that we had and put it in a very robust filing.
Speaker Change: But inside of that filing we also offered the commission.
Speaker Change: A separate solution for them to consider.
Speaker Change: As I noted in my remarks, the hearing is in June and we expect a commission decision.
Speaker Change: In the third quarter.
Speaker Change: We will obviously see progress as the interim intervenor testimony is due in April rebuttal testimony is due in may.
Speaker Change: The proposed securitization option that we have on the table.
Speaker Change: Is not in our finance and <unk>.
Speaker Change: Current financial plans.
Speaker Change: So again, if it does come to pass.
Speaker Change: That would be a good adjustment.
Speaker Change: But we did included in the filing as an option and really purposely to support customer affordability.
Speaker Change: This option is very strong option.
Speaker Change: That helps reduce the cost to customers and so we really look forward to collaborating with all of the stakeholders are in achieving a favorable outcome for for really all parties and I think that.
Speaker Change: So far as the process has gone through we've gotten.
Speaker Change: Positive feedback on how we approach this.
Speaker Change: Got it thank you for that.
Speaker Change: We will go next to Dr. Gass Chopra Evercore ISI.
Gass Chopra: Hey, Deane good morning, Trevor welcome and look forward look forward.
Speaker Change: Listen I just had two.
Speaker Change: Clarification questions a lot of discussions on the on the topics I'm going to ask you on but just to clarify Bill I think.
Speaker Change: You discussed the large low tariff in Ohio and decision in Q3 by the commission is as I understand it that data center customers are not part of that settlement with technology customers in that part of that tailwind is that completely off the table or can they could you still working agreement with them I guess, what I'm trying to get at.
We're in active dialogue conversations happening with them or is it just now in the hands of the commission.
Speaker Change: So you are correct. There is actually two settlements that were being <unk>.
Speaker Change: Discussed there was a settlement amongst the data centers themselves.
Speaker Change: That they filed and then there was a second settlement that was.
Speaker Change: Ourselves plus the commission staff plus some other.
Speaker Change: A large load entities.
Speaker Change: That was filed both of those went through the hearing process and then.
Speaker Change: As I said there is basically now in the in the rebuttal and hearing or excuse me.
Speaker Change: <unk> testimony rebuttal process.
Speaker Change: <unk>.
Speaker Change: I would add I would say that there's continuing discussions going on as.
Speaker Change: Always as you go through these processes.
Speaker Change: But at this point I would say, we're really into waiting for the commission to issue a ruling and we'll see what happens again.
Speaker Change: We're very open these are our customers we want to work with our customers.
Speaker Change: We want to find solutions for them just like we did with the Bloom energy deal.
Speaker Change: So we will always try to find a way forward but.
Speaker Change: We do have certain principles that we want to make sure.
Speaker Change: Stay in place, which is good protection for our existing for our existing customer base.
Speaker Change: That's very helpful color. Thank you and then turn it back to you just a little bit more color on the 2025.
Speaker Change: Glenn So obviously congrats on the asset sale, that's a big bite at the outflow from the from the all equity in the plan and then your commentary about the deferred fuel balance.
Speaker Change: While kicking off a little bit down, but still keeping you comfortably above the downgrade threshold.
Speaker Change: Should we take all of that to mean that.
Speaker Change: From an equity standpoint, you are done for 25 or could you still kind of a bunch in.
Speaker Change: More equity.
Speaker Change: Do you think about just I'm focused on 2025.
Speaker Change: Not sure if you can answer that or not but just thinking about whether youre done for 2025, we are not.
Speaker Change: Yeah, So I think the gas.
Speaker Change: The thing that I look at us.
Speaker Change: The $2 8 billion of cash coming in the door when when we close that transaction.
Speaker Change: We will really go a long way.
Speaker Change: Two.
Speaker Change: Getting what our needs are right now because really when we laid out that 535 that was over a five year period. So over half of that is coming in in year one.
Speaker Change: That being said.
Speaker Change: We are really focused on this growth of the $10 billion.
Speaker Change: And seeing how we can get that into our plan as quickly as possible. So.
Speaker Change: And then there's other things we're dealing with as well.
Speaker Change: As Bill just mentioned the potential securitization.
Speaker Change: So a lot moving around right now, but I think we're in that great position with this transaction.
Speaker Change: That.
Speaker Change: Kind of got the benefit of stepping into after Chuck and Bill had kind of solve that issue that it really takes a lot of the pressure off of 25 right now.
Speaker Change: But again my commitment is to.
Speaker Change: I'll be in a situation certainly where we would be above our downgrade thresholds and this plan. Fortunately as we've got it right now with the $2 $8 billion, even with a deferred fuel adjustment mechanism keeps us above the 13%.
Speaker Change: And.
It puts us in a good position going forward, but again a lot of moving parts around the growth.
Speaker Change: And that's what we're excited about right now is this incremental growth opportunity.
Speaker Change: Got it appreciate that was possible.
Speaker Change: Thanks, Don.
Thanks.
Speaker Change: We'll move next to Nick Campanella at Barclays.
Speaker Change: Okay.
Speaker Change: Hey, good morning, and congrats to travel welcome to Columbus, and Chuck have here in the room Congrats on your retirement too.
Speaker Change: So hey, I just wanted to just a couple of follow ups.
Speaker Change: When you announced the transmission sale you kind of said, it's one 7% accretive.
Speaker Change: On average to the plan and can you just talk about the flexibility that that offers you as you work to kind of add this capital to the plan and strengthen the balance sheet and I guess, where I'm heading is like when we get to the end of this year like is this transaction lengthening the six to eight or do you expect kind of a step higher.
And.
Speaker Change: At the one 7% level. Thanks.
Speaker Change: Yes, so Nick.
Speaker Change: To kind of convert that into an EPS.
Speaker Change: That's roughly 11 or 12.
Speaker Change: <unk>.
Speaker Change: On a full year basis that this transaction is accretive.
Speaker Change: But again it depends on the timing of when we closed it during the year.
Speaker Change: And so that will kind of you have to take that into consideration.
Speaker Change: It gets towards the end of the year on what that really does.
Speaker Change: My view is I think we put out the range of $5 75 to $5 95.
Speaker Change: And we'll be at this point in that range.
Speaker Change: With the transaction and.
Speaker Change: In a good shape with regards to credit. So again, it's probably the later it goes into the year the less impact. It has on 25 with regards to the accretion.
Speaker Change: But it more really does help with where we're going to be on the credit metrics.
Speaker Change: Alright, Okay, and then just.
Speaker Change: How are you kind of thinking about further portfolio management at this point I mean, the transmission sale.
Data point, and I definitely know like kind of a clear focus here on Indiana, Ohio, and Texas and just do you guys still see opportunity to kind of prune things.
Speaker Change: The portfolio, if it's accretive to your plan.
Speaker Change: Yes, again, I think on any type of M&A, we wouldn't really speak to it but I would tell you. The thing that we're most excited about is investing $54 billion at one times rate base and if you think about that that's basically the size of our market cap right now with a potential upside of an additional $10 billion.
Speaker Change: Our view is we want to get scale and scope and we believe we're growing this business.
Speaker Change: And we think we've got great.
Speaker Change: Footprints over a large area that helps us to mitigate risk.
Speaker Change: And so from the at the end of the day I look across the portfolio and believe we've got a really good fit footprint relative to our competitors and so I'm very very positive about what I've stepped into here.
Speaker Change: And feel that this is really good but I'm not sure. If you want to add anything on this and I think again as Trevor noted we've got.
Speaker Change: A tremendous opportunity in front of us and as a company.
Speaker Change: We are going to drive ourselves to be the biggest and the best energy infrastructure company in this.
Trevor Mahalik: In this country I mean again, it's in our name where American electric power, we're going to power America, and as Trevor noted the opportunity and.
Trevor Mahalik: Is almost unlimited for us going forward and I have very strong confidence that we're going to be able to deliver and execute.
Speaker Change: Alright, thats, great and excited to see it and have a great day. Thank you. Thank.
Speaker Change: Thanks, Nick.
We'll move next to Carly Davenport at Goldman Sachs.
Carly Davenport: Hey, good morning, Thanks for squeezing me in maybe just one quick one for me just as you think about the generation needs across the portfolio to accommodate the slowed growth I know you referenced some of the gas filings at <unk> in the opening comments can you just talk about the status of procurement of key equipment like turbines to execute on those plans.
Speaker Change: Okay.
Speaker Change: Sure and I appreciate the question.
Speaker Change: We have a very strong generation plan that.
Speaker Change: Has been developed within AEP in.
Speaker Change: A bit of it also predated me with regards to.
Speaker Change: Looking at strategies around procuring turbines procuring transformers another key equipment.
Speaker Change: I am very confident in the plan that the team has our procurement strategy is strong.
Speaker Change: We have a lot of activity out in the market right now, where we're doing rfps for a number of our states.
Speaker Change: We have significant ERP activity going on.
Speaker Change: And obviously there is a growing energy man out there, which is really where we're leading the efforts.
Speaker Change: In the industry to try to find solutions for them like in the near term Bloom and in the longer term <unk>. So.
Speaker Change: We will be all over this I'm confident in our team and I'm confident in the fact that we're going to deliver what our states want from a generation plan.
Speaker Change: <unk>.
Speaker Change: Clearly as the year goes on we'll be providing more updates in that area.
Speaker Change: Great. Thanks, so much for the color I'll leave it there.
Speaker Change: Thanks, Charlie.
Speaker Change: And we have time for one more question and that question comes from Julien Dumoulin Smith with Jefferies.
Speaker Change: Okay.
James: Hi, Tim it's James on for Julien how are you.
Speaker Change: Yes, good morning.
Speaker Change: Good morning.
Speaker Change: Yes, thanks for fitting us in here at the end.
Speaker Change: Very thorough Q&A covered.
Speaker Change: Pretty much all the questions that we had did have one that was remaining.
Speaker Change: <unk>, which is just on the ATM that you filed.
Speaker Change: You had mentioned that $400 million had been already issued.
Speaker Change: In combination with the $2 8 billion of net cash proceeds that we would expect to receive to see you receive in the second half of the year.
Speaker Change: To those to meet your 2025 equity needs or should we assume any further usage of the ATM in 25 or is it just the 26 and beyond tool.
Speaker Change: Yes.
Speaker Change: As I said, James we're continuing to evaluate all of that the good news is we do have access to the $1 3 billion. That's remaining under the ATM and we can always hit that if we need to.
Speaker Change: But again right now I think we've got a very positive situation that we will be.
Speaker Change: Getting the $2 8 billion coming in later this year and then as we look to the $10 billion growth opportunities here.
Speaker Change: We will continue to evaluate that but I think largely you've got it right with the ATM in place and what we're doing with the drip program and the cash coming in and the securitization that potentially could come to fruition by the end of this year, we're in good shape.
Speaker Change: Gotcha Gotcha really quick follow up there I guess.
Speaker Change: From the $2 55 billion that you had less 500 million or so for the drip 100 per year. The one point in time for the ATM that $3 50, it would seem kind of perfect for J S N or some sort of equity content or equity linked.
Speaker Change: Security, So I guess that kind of fits with with what you've described is that a reasonable way to think about it and then I just had one more on the $10 billion.
Speaker Change: Yes, no I think absolutely you are thinking about it correctly theres a lot of levers for us to use here as we continue to look at things.
Speaker Change: And so again, it's a very positive with a $2 $8 billion.
Speaker Change: And then Securitizations and other equity like instruments are all very positive and then if need be we do have that $1 $3 billion ATM, but again, we were in good shape here.
Speaker Change: Terrific last one and I'll leave you with I note that you've answered one or two questions already on the <unk> just wondered if there was a rule of thumb you know a couple of years ago, either talk was all about 30% or 50% or whatever percent of incremental capex and I get there's certain thresholds, if you've got $1 billion of attendants a different scenario than if he can all 10 of the 10.
Speaker Change: But any rule of thumb, you can give us on a high level thinking about the amount of equity or equity like.
Speaker Change: The portion that you'd be looking to finance of that incremental capex versus.
Speaker Change: Yes, the biggest thing that I would say is we're excited to roll that out.
Speaker Change: In a normal cadence on our third quarter call.
Speaker Change: And again, there's a lot of moving parts that we're managing here.
Speaker Change: And we were going to finance it in the most efficient way possible to ensure we can continue to meet the needs of our customers, but also to deliver on value to our shareholders and that's what we're very focused on.
Speaker Change: Thank you so much I appreciate it I appreciate it.
Speaker Change: And that concludes our Q&A session I will now turn the conference back over to Bill Chairman for closing remarks.
Bill Chairman: Yes. Thank you we appreciate everyone joining us on the call today I'd like to close with just a few summary remarks first very exciting times are ahead for AEP as we put our robust capital plan to work as you've heard and continue to grow the business, while delivering shareholder value.
Bill Chairman: I am very confident we can unlock the incredible value in this company by advancing our long term strategy and providing safe affordable and reliable service across our large footprint.
Speaker Change: And then third.
Speaker Change: Trevor and Darcy will be hitting the road actually in March meeting with many of you in discussing AEP is very strong and comprehensive value proposition.
Speaker Change: And finally, if there are any follow up items. Please reach out to our IR team or through questions. So thank you again for joining US today. This concludes our call.
Speaker Change: And again. This concludes today's conference call you May access the replay for today's conference by dialing one 870 702030 and entering the conference I'd of 1336080, followed by pound.
Speaker Change: The replay will be available until Thursday February 22025 at 11, 59 PM Eastern time.
Speaker Change: You for your participation you may now disconnect.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: [noise].