American Electric Power has locked down 13 GW of gas turbine capacity that can be put into service by 2031, the utility's chairman, president, and CEO Bill Fehrman announced Thursday during a quarterly earnings call. The Columbus, Ohio-based company secured 3 GW of that capacity just in the second quarter through agreements with GE Vernova and Mitsubishi, and has lined up options for another 10 GW of turbines by 2035. Fehrman said the new generation investments will play a central role in the company's long-term growth strategy as it deploys the turbine capacity across its regulated operations.
The utility's contracted data center and large industrial load pipeline climbed to 69 GW, up from 63 GW in the first quarter, according to CFO Trevor Mihalik. That pipeline includes 45 GW in Texas, 12 GW in Ohio, and another 12 GW spread across Oklahoma, Indiana, Kentucky, Louisiana, and Virginia. AEP's commercial and industrial sales jumped 12.7% in the first six months of this year, while the company's combined regulated return on equity rose to 9.2%, up from 8.8% in 2023. Second-quarter income came in at $713 million, down from $1.2 billion in the same period last year, though the prior year included significant one-time earnings. The company's utilities expect to add 27.2 GW to their systems by 2035, with resource plans calling for 15.3 GW of gas, 6.4 GW of solar, 5.1 GW of wind, and 500 MW of storage.
Fehrman called turbines "a scarce resource and will become increasingly more valuable," pledging that AEP would "continue to be aggressive" in securing positions on turbine supply. The timing for the 10 GW of turbines aligns with AEP's aging power plants, Mihalik said, "setting us up really well to continue to replace, potentially, some of the coal plants and some of the retiring gas plants in our vertically integrated utilities." The company has a $78 billion, five-year capital plan running from 2026 through 2030, with the next version set for announcement this fall. Mihalik noted that AEP utilities' large load tariffs require customers to make long-term commitments and support the investments needed to serve them, while providing "strong protections against project delays and changing development time lines."
Three months after Fehrman said AEP was weighing an exit from the PJM Interconnection over frustrations with governance, load additions, and resource adequacy, the outlook has improved. "The pace and intensity of productive conversations with PJM has significantly increased," Fehrman said, citing positive engagement with PJM's team, FERC, and other stakeholders. FERC held a technical conference on July 23 exploring potential changes to PJM's governance framework. Fehrman said he's "very optimistic that there's going to be alignment around some of the solutions," emphasizing the importance of frameworks that ensure fairness to all participants, protect customers, and appropriately assign costs to those causing them. With 13 GW of turbine capacity secured and a growing pipeline of data center and industrial demand, AEP is positioning generation expansion as the engine of its next decade of growth.