Utility AEP raises capital spending plan to meet data center power demand

Oct 29 (Reuters) - American Electric Power AEP.O raised its five-year capital plan to $72 billion on Wednesday, up from $54 billion previously, to meet unprecedented power requirements driven by large-load customers including data centers and industrials.

Shares of the company rose 3.2% in premarket trading.

U.S. utilities are ramping up capital expenditure budgets as they address growing demand for power capacity from major technology companies that are setting up data centers to support complex AI-related tasks.

AEP said the plan was supported by 28 gigawatts of new load backed by customer agreements, up 4 GW since July, and an additional 190 GW of load requests at various stages of development.

Serving about 5.6 million customers in 11 states and possessing the largest electric transmission system in the United States, the company said its peak system demand is expected to surge to 65 GW by 2030, up from a current peak of 37 GW.

Power consumption in the U.S. is expected to hit record highs in 2025 and 2026, driven by a surge in demand from data centers needed to run AI technologies, according to the Energy Information Administration.

Company unit AEP Transmission had also secured a $1.6 billion loan guarantee in October from the U.S. energy department to upgrade nearly 5,000 miles of transmission lines in Indiana, Michigan, Ohio, Oklahoma and West Virginia.

Total quarterly operating revenue rose nearly 11% to $6.01 billion, compared with a year ago.

During the third quarter, its transmission and distribution utilities segment reported operating earnings of $259.1 million, compared with $245.2 million a year ago.

AEP reaffirmed its full-year adjusted profit forecast in the range of $5.75 to $5.95 per share and said it now expects it in the upper half of that range.

The Ohio-based utility reported adjusted profit of $1.80 per share for the three months ended September 30, narrowly missing analysts' average estimate of $1.81 per share, according to data compiled by LSEG.