American Electric Power Sees Surge in Profit as Data Centers Drive Demand
American Electric Power (AEP) reported a significant increase in fourth-quarter profit, attributed to growing demand for power from commercial customers, particularly data centers.
Rising Demand from Big Tech
As major technology companies invest heavily in artificial intelligence (AI) and supporting infrastructure, utilities like AEP have experienced a surge in power demand. CEO Bill Fehrman noted strong load growth in commercial sectors, particularly in Indiana, Ohio, and Texas.
Projected Load Growth
AEP estimates an annual retail load growth of up to 9% over the next three years and anticipates serving over 20 gigawatts of new demand by the end of the decade.
Investment Evaluation
The utility is considering an additional $10 billion in capital investments to its five-year plan, currently at $54 billion.
Industry Outlook
The U.S. Energy Information Administration forecasts record-breaking power consumption in the coming years, driven by increased demand from data centers, cryptocurrency mining, and residential and commercial energy use.
Company Performance
AEP provides electricity to approximately 5.6 million customers across 11 states and operates the largest electric transmission system in the United States. For the quarter ended December 31, the company reported net income of $664.1 million, or $1.25 per share, compared to $336.2 million, or 64 cents per share, in the same period last year.