AEP raises capital plan to $78 billion, beats profit estimates on data center demand

May 5 (Reuters) - American Electric Power AEP.O on Tuesday raised its five-year capital investment plan to $78 billion and beat Wall Street estimates for first-quarter profit, as surging power demand from data centers and industrial customers drives expansion across its network.

U.S. electricity demand is rising at an unprecedented pace, with utilities ramping up investments to serve Big Tech companies building data centers to support artificial intelligence technologies.

AEP said it signed 7 gigawatts of new load agreements during the first quarter, primarily in Ohio and Texas, taking its expected incremental load growth to 63 gigawatts by 2030.

The company said AEP Texas accounted for 41 gigawatts of new load commitments, adding that the timing of infrastructure buildout in the state would depend on generation needed to support the load, which is supplied by others.

The Columbus, Ohio-based utility increased its five-year capital plan to $78 billion from $72 billion, driven by newly approved transmission investments in PJM and SPP and new natural gas-fired generation in Indiana.

AEP said it has line of sight to over $10 billion in additional investment potential beyond the new plan, while signed large-load contracts are expected to provide up to $16 billion in cost offsets for existing customers.

"AEP is executing on our strategic plan at an exceptionally high level during a time of unprecedented opportunity for our industry while keeping an intense focus on affordability," CEO Bill Fehrman said.

AEP posted operating earnings of $1.64 per share for the three months ended March 31, compared with analysts' average estimate of $1.57 per share, according to LSEG data.

Revenue rose to $6.02 billion from $5.46 billion a year earlier, beating estimates of $5.68 billion.

The company reaffirmed its 2026 operating earnings forecast of $6.15 to $6.45 per share.