Even with the increasing spending, American Electric Power expects it can limit residential rate hikes to 3.5% a year over the next five years, company officials said.

Surging loads

In the last 12 months, AEP’s utilities sold 6% more electricity compared to the previous year, with residential sales up 2.3% and commercial sales up 7.9%, and those sales are expected to continue growing, according to the company. About 2 GW of data centers came online in the third quarter, Trevor Mihalik, AEP vice president and CFO, said Wednesday during an earnings conference call.

AEP expects its peak load will hit 65 GW by 2030, up from 37 GW, with demand surging in Indiana, Ohio, Oklahoma and Texas, according to William Fehrman, AEP chairman, president and CEO. The growth estimate includes 28 GW of customers with electric service agreements or letters of agreement, he said.

About half of that 28 GW is in the Electric Reliability Council of Texas market, 40% in the PJM Interconnection and 10% in the Southwest Power Pool, according to Fehrman. About 80% of that pending demand is from hyperscalers such as Google, AWS and Meta, Mihalik said. The remaining demand growth is from industrial customers with projects such as a Nucor steel mill in West Virginia and Cheniere Energy’s liquefied natural gas facilities in Texas, he said.

“We are in, I would say, the cat bird seat with regards to connecting data center load,” Fehrman said. “The 765-kV transmission network that we have provides us with an extreme competitive advantage for where these folks are trying to site.”

AEP owns about 2,100 miles of 765-kV transmission lines in six states, making up 90% of all 765-kV infrastructure in the U.S., according to the company.

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