American Electric Power (AEP) takes its slice of the US power pie out of Middle America. The holding company is one of the largest power generators and distributors in the US. AEP owns the nation's largest electricity transmission system, a network of almost 39,000 miles. It also has 223,000 miles of distribution lines. Its electric utilities have 5.3 million customers in 11 states and have about 36,500 MW of largely coal-fired generating capacity. AEP is a top wholesale energy company; it markets electricity in the US. Other operations include coal and bulk commodities barge transportation services.
The company reported a 5% jump in revenues in 2011, primarily driven by a recovering economy spurring more industrial demand and wholesale power use. Expanded revenues and cost-cutting measures led to a 60% rise in net income for the year.
AEP has scaled back its unregulated operations in order to focus on its more fiscally reliable regulated businesses. The firm has also sold its independent power production operations and its European trading operations, but it continues to participate in wholesale energy transactions in regions of the US where it owns assets.
Seeking to run cleaner, more efficient power plants to comply with regulatory clean air and water standards, AEP has earmarked $1.2 billion through 2020 for further upgrades of its coal-fired generating plants.
Although only a small percentage of its power generation comes from renewables (such as wind and hydro), the company is investing heavily in wind power to ramp up its clean energy sources in response to carbon reduction legislation in the states it serves. By the end of 2011, AEP was operating 310 MW of wind power facilities and had about 180 MW of long-term purchase power agreements for wind power.
Growing its retail business in the US, in 2012 AEP acquired Chicago-based Blue Star Energy and its independent retail electric supplier BlueStar Energy Solutions. The company has about 23,000 customer accounts. The deal also gives AEP the opportunity to hedge the output of its soon-to-be unregulated Ohio power generation. – less