American Electric Power (AEP) 27 Feb 242023 Q4 Earnings call transcript

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the American Electric Power Fourth Quarter 2023 Earnings Call. [Operator Instructions] I would now like to turn the conference over to Darcy Reese, vice President of Investor Relations. Please go ahead.

Regina. you, Thank and Call everyone, the Quarter Fourth Good American welcome Electric Earnings for Power. XXXX morning, to We appreciate you taking time today to join us.

presentation these website statements. to for will future results Our available Please are many during refer release, slides differ factors. may financial There discussion related a earnings cause that information the on call. our filings making materially at our be we to SEC factors aep.com. Today, of forward-looking statements and are from these

opening remarks and President for Peggy Ben Fowke, Chuck Joining our President morning me Executive President of and are our Interim Financial Chief Zebula, Vice this Simmons, our Officer; Officer; Executive Utilities. and Executive Vice Chief

We following now remarks. will the will your I their questions Ben. call take turn over to

and Power's morning, American would thought It's Darcy, to be reconnect chance Call. Earnings never these good Fourth XXXX to you, circumstances. welcome Electric have great a it under with to and Well, thank I Quarter although you,

As Sloat its made you CEO. action know, the but and to was the President believes was do best not AEP her the Taking so. in as from remove of interest and this it easy, to Directors Chair, decision a duties Board stakeholders AEP Board of Julie

any assure behalf to like everyone On family, would code that all behavior, of for of of AEP's Board departure well of unethical entire and any her disagreements or like I because conduct. the Julie's to not AEP the of and would thank Julie financial I to violation due wish her also policy was contributions.

XXXX. impressed to AEP years and base because rise Xcel In leadership aware, quality Board the retirement later. with multiple more asset my to this X impressed team challenges. and strong was AEP the its here, Board Energy, joined team tenure Board. meet seen of AEP's I'm even I've its of model, the I many are attracted you from as my business was Now in February of I I after

you give examples, earnings. me Let some with starting

exception. has guidance, in or XX years is exceeded AEP a earnings row, For met no and XXXX

earnings over $X.XX. weather operating the range increased in at despite interest within cost of unfavorable That's came guidance our Our prior year. and $X.XX of $X.XX

know, you the O&M its flat continuous met efficiency at XX doubling been essentially focus years, has team's And challenge, that for short excellent. for of a industry. the O&M AEP same challenge O&M keeping the as This Now has asset controlling last expense on is nothing while base. time

early team $X.X be put forward SWEPCO's project. XXXX, You petition ultimately with to may didn't Commission and the to Louisiana back with the of the denied on in a billion. part But beat miss also Arkansas for track move stepping project up renewables recall a project and that Texas full XXX-megawatt the

closing sales within the the expected next our of targets. XXXX $X.X the conclusion to Renewable distributed day progress retail in in on And and derisk schedule you proceeds. in of really billion are team, pleased second me a quarter, I of the bringing AEP's that, portfolio of renewable new completed plan. generation or This, the Last asset and focus renewables unregulated and Mexico to management territory, achievement a process keeps resources result, the our X. throughout and our we our with XX% execution. Initiatives should portfolio, of that We including are the solar the portfolio hope have representing billion would projects solid great with and achieve sale Development squarely Board simplify sales $X.X we capital As new of commission SWEPCO, agree of year, our made. be cash is X-year approval our today, we current on service us combination $X.X billion New with

willing a when our ownership to disciplined forward, to retain made As will price move to the execute decision our Pioneer will intersect. interest and to be both joint we've that be take To the AEP manager, end, ventures. action we in continue we Prairie portfolio transmission ability and and Wind

Transource venture We review service like that fits and will forward the to to owning ultimately completed our expect. and outcomes of focus assets, regulatory need portfolio. our joint the on down within this on of strategically determined our customers we'll us constructive and provide doubling achieve allow our also quality efforts We going remaining that

dialogue the enhance perspective Capital, Icahn team as recent teams. from addition to value investors. agreement to Like strategic and stakeholders. Board our we continue Icahn of us, there's for AEP between execute our meaningful Icahn constructive about upside believes shares will our and Regarding culmination priorities a for came potential on undervalued, The AEP's and a the AEP fresh are bring

ahead, FFO X% XX% plan Looking our XX% in reaffirming operating to target, are which shortly. our we to capital addition XXXX is billion will earnings Chuck earnings as X%, rate guidance to of to year to of $X.XX well growth $XX $X.XX underpinned expand by range today, a X-year full debt upon long-term as which

You the should believe identify CEO, to works role I know Board I President as and Interim to can permanent successor. a committed that I add my and am value while

challenging customers. you There's to turns to ahead. So a our we at tremendous and work before encourage I'll team's that lie acknowledge all Peggy. affordable to bumps achieve some in the deliver With I for I day it few certainly as objectives turn a the our over every reliable opportunities Chuck that, confidence it road. to at of key I in regulatory safe, on and have XXXX for to energies been ability a times, our turn focus and twists also review, Peggy been that would AEP. financial over let year But and updates to me has

morning, and good Ben, Thanks, everyone.

ongoing Now I'd turn like to efforts. on legislative our updates to regulatory and

XX earned focus is it successful key XX. Closing activities for even made Slides do gap Details facilitate constructive on through area in While clear authorized to is found the of we appendix XXXX, versus can us. regulatory outcomes. we of important a in that more progress and the can related be ROE

in points in ROE quarter mild from fourth slight reflects quarter. improvement Our XX of over X.X%, weather third a the came XXXX. basis approximately This conditions also impacts at

Our and while Most regulatory improve ROE reducing Kentucky, years Virginia. gap to provide service obtained we've rate by or legislation done reliable managing importantly, will DCRF efforts work and and us reviews Texas, we cost costs factor, the safe to lag. that distribution the in recovery securitization and help biannual of to is every X in passage recent in position a related bridge supported

in base and in reaching On we the Oklahoma relief. rate which in over awaiting rate $XXX our we're ESP the several V case and a outcomes wins course achieving filings, XXXX, XXXX, secured we the and Arkansas Louisiana, Ohio regulatory Louisiana secured order. Overall, settlement in including front, reestablishing formula constructive million plans rate in important commission of on Virginia,

we the Michigan, and in We this settlement, also to already filed ruling In In a commission new in which have we the we through expect decision expect reached base in and approved July. application case case filed continue year. this currently the earlier in process Kentucky, In XXXX. Indiana, cases was a by of the advance by and commission Indiana, base year. securitization the we and Michigan Kentucky December, in June

filed a include we new last cases rate which month. for upcoming Oklahoma case PSO, Other base

of biennial first in AEP have APCo that will rate the include benefits rate changes the XXXX. filings legislative should and Additional in an review Texas base quarter attained Virginia case the

constructive XXXX, in many are disallowances we disappointed While in received. recently reached outcomes couple we a

a First, the later. motion in in a related AFUDC issued a disallowing filed Plant decision week Texas, we our of reconsideration for mid-December commission And Turk capitalization to XXXX.

under Virginia, recovered West disallowed filed In portion last March February the an and February fuel, we recently Court our on month, the appeal Virginia of with to commission XXXX West a X. XXXX Supreme

just related treatment associated in we with carryforwards, of accumulated February the unfavorable XX. operating Shortly, FERC affecting We for net filed on Chuck our discuss rehearing operating or XXXX Transmission disappointed NOLC, are impact net to the financial to earnings. taxes deferred January also segment. will with Holdco related mostly loss XXXX order received income We

more ROE to XXXX of we our a as be ahead, X.X%. in achieve we work is forecasted know Looking to regulated regulatory advance strategies there done

way look on regulators to to of levels. all with or at engage relief secured strengthening mechanisms and our more well with constructively that almost are rate year are forward We related relationships administrative continuing to We nature. this our XX% either in

mentioned, advance appendix $X.X Ben to billion X-year of total state a by billion have this XX now can XX. and year, the commissions. additions our through AEP $X.X of various continued viewed plan resource regulated As on Slides in detail renewables approved capital More be

received solar we solar in megawatts for megawatts approximately projects, XXX.X-megawatt previously $XXX for $X and wind renewables more commission than and investment, received and disclosed, million. In SWEPCO's Michigan approval I&M Indiana of of for to As $X.X XXX This is billion of in approval million renewables XXXX, both of generation, of megawatts for billion. also for PSO's approved billion XXX investment. the portfolio XXX $XXX APCo's projects $X.X XXX-megawatt addition wind previously totaling we representing

and our goals fleet aligned transformation Our by integrated resource plan. supported are with

which generation provide companies, and We program, our regulated projects on are renewable an to have come in Kentucky, more generation of at for additional for SWEPCO, integral resources diverse a operating and set are requests with other I&M pending These PSO investments proposals including from APCo. the great from generated focused along to to XXX% capital assets is value tax that broader and our are our passed of production part energy customers. credits

transmission an customer advancing and billion to while in systems these EPS to and to These commitment support growth in projects, addition additional X% resiliency. distribution underpin bill In impacts. combined investments our is reliability $XX our X% investments AEP mitigating

I'll financial the pass our to Chuck details that, commitments. drivers it through walk With in over supporting to performance

for load, to I'll and service results good share credit year quarter the call. commentary full morning on and and outlook territory us updates liquidity. Peggy, on fourth with year our metrics XXXX, our some on Thanks, and through everyone finish the for this walk

for go per $X.XX of earnings the the quarter operating for which Let's fourth were and quarter Slide share periods. compared X, share $X.XX earnings in to GAAP the GAAP to per shows to comparison XXXX. year-to-date

For were XXXX. the compared earnings year, in $X.XX to $X.XX GAAP

throughout related comparison gain businesses, as well nonoperating. XXXX, regulatory our earnings reflects mark-to-market to certain As the outcomes to sale the typical adjustments loss of year-to-date GAAP our as of operating as we have highlighted or

of committed operating earnings presentation are forward. Detailed shown Slide team the and between the minimizing XX operating variances to earnings Our is GAAP today. GAAP we as reconciliations to and XX of on go

the fourth Let's cover quarter. quickly

in of costs at and and improvement Note in last was unfavorable years. $X.XX Generation XX weather, partially $X.XX came out of our XXXX. strong earnings had $X.XX by share, the which Marketing interest higher segment, of performance favorable December an in the particular, performance the weather, of lower quarter offset Holdco. Transmission $X.XX was warmest XXth and that over in we per $X.XX same fourth period in Our O&M

our For Slide on reference, fourth details XX shown full of the are results presentation. the of quarter

for results $X.XX on Slide year Let's XX. per have in earnings XXXX share full a look share per $X.XX to Operating compared at our were XXXX.

weather, drivers O&M. normalized the lower increased at is at for share, companies, due earnings segment to Looking and income retail from $X.XX $X.XX operating higher interest positive favorable segment, Once by transmission depreciation weather, higher X $X.XX were $X.XX Positive growth of unfavorable Integrated $X.XX, the and changes Utility various increased Vertically Distribution lower taxes offset rate and earned by offsetting in this Texas and Vertically revenue, the interest Utilities again, These the segment. O&M. drivers segment. were transmission depreciation favorable up Integrated higher income investment Partially items Unit share, these year. taxes. primarily expense in $X.XX per last depreciation unfavorable mostly load, Rockport were $X.XX Transmission to and and partially Holdco XXXX. The main Operating due of in and higher drivers segment across expiration down revenue, year, AEP included higher changes the in lease of share, expense. The December segment favorable last per $X.XX this rate Ohio contributed items from Transmission up were per

plan the of Peggy the earnings we impact in with of to at January, per The resulting approximately FERC impact the is NOLC unfavorable received mentioned, of this Holdco. order Transmission occurring XXXX As that in share. our $X.XX consolidated majority net to impact $X.XX an order share, per

These of share, year. higher were interest Generation sites sale variance last up associated the renewable and to unfavorable from renewable Marketing August. taxes. development primarily contracted is per impacts positive improved $X.XX retail sale in with by here wholesale favorable expense $X.XX due and power and offset partially income the produced and items The margins,

by investment Corporate higher down Finally, offset Other of was driven in and year-over-year by favorable share, XXXX. partially change per in $X.XX investment losses largely occurred the gains, expense, due interest that quarter fourth a to

reaffirming our for are earlier, we guidance mentioned XXXX. we As range

our bridging this waterfall included Slide XXXX of an we've in convenience, For guidance midpoint actual our results updated to XX. the year

changed is results, segments due year's overall last guidance. variances there to or change no actual our some to While

update development retail stronger I'll to XX, X.X% XXXX. of Slide our our in were This to incredible in to when grew on economic Turning for the thanks center the grew provide apparent was guidance, Overall our load looking by performance. This sales across quadrant commitment most again dominated at X.X% weather service load and an X.X% original in commercial year, expansion load, data an is centers. the acceleration territory. right-hand normalized in the Commercial and upper in shown than growth slide. data the

are are gains diverse. We the becoming encouraged that geographically more

as to expect in years over of AI technologies. see Oklahoma and processing growth come what and global in projects New for Texas. Michigan, accelerates storage next supplement and through we the and online a Ohio other This Kentucky the several have data we of is to demand development continue trend the the

you X.X%, challenges number any This left-hand added see a commercial higher I are is projects going more industrial expect our from queue through grow its that this some which accelerate the XXXX lower this We sales mostly and to believe the are year to offsetting base existing bleed the economic slide. year. Industrial across their to quadrant attributable customers. recently of XXXX work continue to way than load which large our the exceptionally and commitments robust. into by we've grew loads load in can new for as at territories, seen service of of is

We industrial modest to in continue a with growth to the reflect only increase this manufacturing softness year. load expect nationally,

energy construction upper residential year usage positive In left-hand on online. In negative and residential However, slide, for that added at beyond net home. Overall, and resulting as influencing and well. On almost homes our this slightly a the several spend as Usage note, sales of in inflation The under a growth workers segment. have of come you'll per efficient costs time several grow impact optimistic of office load X industrial perspective. residential in years, has corner borrowing as in more industrial should accelerate in customer an declined more XXXX. declined see loads the the moderate large household certain in residential new currently base past consistently the become next load customers the be footprint, offset positive about customer regions. our XXXX, XX,XXX may budgets we've we positive years, across to in commercial this trends over we're from seen especially instead a

a the conservative loads our Our in us of forecasted. however, confidence see we large approach update, to to would expect in some growth this gives I upside estimating In area. lot next

These metric changes the In on to XX.X% position. company's debt quarter discuss outlined on as issuances you offset primarily by move XX $XXX changes March other XXXX. collateral, included maturity. to positive call, to cash prefund FFO of to quarter the the -- and to recovery were in left debt the various FFO during long-term top and Let's increase due were in an Slide liquidity debt our million AEP can drivers. see the XXXX parent capitalization the and stands changes third table, Positive at favorable issuance fuel somewhat for in

downgrade We threshold and are to Moody's end unprecedented above due headwinds team weather in of strong an increase has the pleased year the to overcome financial interest XX%. rates that unfavorable

improve regulatory our growth cash expect for towards throughout range deferred and our including recovery to approximately XXXX to flows trend normal XX% as to XX%. our XXXX million. FFO positive debt of through assumes continued in activities, of of balances continue fuel targeted progress We our metric $XXX This continued various to we weather

revolver from to facility. the and cap bank $X.X parent is increased to see XX can and XX%, summary, to basis XX.X%. quarter debt prior by slide, points supported debt of is approximately debt our this strong remains our at quadrant which credit total left by billion, In liquidity our lower you Our the and

Lastly, funding just unchanged over on to prior quarter the end the front, year status the our pension remains at from XXX%. qualified

positive increased asset offset this falling While the was increase returns. quarter, rates the by interest during liability

of of give normal mild Weather years, I'll the year-over-year Also, despite a in was To XX record on interest years in AEP $X.XX versus a to XX. Slide our negative quick significant to commitments overcome $X.XX put down a versus impact system. to XXXX message. weather. we the hurdle to system resulting and heating $X.XX the most challenges little for more delivered the degree context normal We a days numbers, across compared Turning our the faced. results. for were recap XXXX one expense those today's on past was XX%

the our business adjusting of throughout discretionary diligently needs. balance meeting focused and by our to timing on work spend year We the while reprioritize staying plan core

on outcomes supporting to critical in some front, While provide service admittedly that reliable many rate secured facing customers. the objectives challenges to our were regulatory we our

this year, of team. and Julie a into any by implement would X% like with XX strategic impact you authorized We a XXXX continuing capital share, to the and balance years reaffirm and AEP of we ahead Looking while executing improved positive our rate long-term our about to the on to for management X% many. Ben, will AEP. per to our opportunities us. made Julie $X.XX earning of to Sloat $X.XX and the an we are take for challenges taking customer, be welcome our missed has growth optimistic on program, thank guidance our to face her care and sheet AEP moment of prepared return priorities. I

and the all industry embraced to respected, to for AEP will value management looks Board employees enhance be stakeholders. entire look team AEP. as The working we you you and in is leadership well by of Your the forward with the

Operator, the today. time open your for call can you for you questions. up Thank

Pourreza Partners. will Guggenheim question of line from Shar Our Instructions] the first with [Operator come

are of on slides the obviously, the leaning So AEP. successes

reiterated targets, some on You've guess, the guidance, off outside balance guess what's numbers. goal earnings What's growth table, see you broken? is your management rate, shuffling, CapEx the table? sheet I the of review? do what the I of what's

would the Well, that And can word is don't I tell use I Ben. think you this I broken.

I can areas think there's we where better. do

and of we made. we script, which I think you many showed in accomplishments, the I the -- think

we We can getting constructive on also regulatory that recognize better outcomes. do

our the same. So priorities strategically, remain

various I and get then to for better communities, again, much remarks, keenly completed, at and of asset. at, as And I but mentioned, going We it's and where outcomes, only We'll to review well. our and through We add shareholders of always by looking for that. be finally, think we've better. we the point. And CapEx given that leaders what us that, -- need you I gives then my price recovery the think at it good people, invested scripted Transource. the step of key constructive think listen want circle industry this the think asset. on lot but And capital portfolio that good what planning have goes a long execute willing that as Xx important value lens a We what's in it and And we're optionality. to and FERC said though, they a that that we on important you is look local we that into and is think disciplined term I at virtuous translate Xx And to CapEx Extremely placing to we're to continue intersect, a going good a of great book can do to into ability keep that's local chance but very transact changes want the stakeholders. to it do you that. managers. a if done for of getting Those in can I level. where the you the customers pretty the constructive is ways not process and they and success, at investing back, one book to

the So that's going plan forward.

process, of that And jurisdictions do do you hit where et thinking currently there's you're targets as people, about sort be -- some believe cetera? you not those believe, able may you AEP to operates

Well, over to have improvement, elaborate Peggy I we but there's where it think will areas turn and/or Chuck to on I that.

we're regulatory strengthen to do on do really I regulatory it our think on to had. from what is and have constructive think going legislative a to outcomes that relates relationships, perspective, regulatory keenly continue execution. we're the I be going we and We're to further focused build as going

them, I back we're to think that that some going going of standpoint. execution from disappointments out we had in the and focus from XXXX, on we're learn to and that go

looking you And of Perfect. CEO? lastly looking just the guess, you the can just in for are successor? with next what you're about of I President are Board finance as a sort Ben, stands kind and or exactly maybe the for thinking for just looking external? as background, regulatory a me, then someone background, where AEP an -- Okay. next guess, you today, specify for I internal, CEO you prior of in Are what OpCo,

down Well, don't by to way, to ideally but background, and -- get search. it's very narrow robust that, specific definitely going a think want I we're of start the an candidates. to external list any and with I'll I

AEP for people. So assets, great talented and an be think attractive it's going I many, destination a great many with company to is

great pick to think I be to it's that talent. from going So

that investor in utility is industry, a get a the is somebody you in -- Ideally, well seasoned the executive community. known

candidates. would again, extremely at they talent ideal a regulatory important, it that's leadership lot to are big that's lot of But qualities. success. a experience And got has if AEP wish that think be We've to have going the we I list. we're and ultimately, -- to great I ability multi-jurisdictional Those talent. great think and of a get develop want achieve

of from comes with Tonet JPMorgan. next Your the Jeremy question line

be along AEP the you're and comment, if we able to if I Icahn's top Capital along Icahn lines forward should agreement I was these the relatively there's recent I recent looking lines, here tenure? could. And anything continue given that change if want of with announcement? expecting, with just I on of guess, just kind to ties the And wondering kind these at announced the I how guess, into else wondering short

Yes. in probably in with press rehash release just the mean additional board -- what and I the will I just came scripted after our remarks. the Icahn really members we've said the are we actually that AEP We to do perspective. and together Icahn shares opinion unleash team. their undervalued, shareholder team and value. AEP want share we They work welcome the to discussions as

Regarding discussions mean, path go can't deliver work more full CEO. we've We're to I It than was with Julie's value. continue after already going is to and we Board departure, I into Julie, to new decision really details any a what said. decided hard a best to forward that transition to shareholder the

I give Icahn as goals. fresh pursue think us we will the those perspective Board a members

And we table? options parameters just Got it. or strategic going path going of table helpful. Just juncture, to want of see very on forward all could options kind the we any are That's the at what think forward? expect the this off about as the

the -- reviews, with mentioned going FFO we strategic we're to have, we're shareholders. targets. I we completed look right assets can We've strategic to debt enviable where and for goals. the but position, in I think that But continue the achieve also And really Well, Chuck to we have an our are a those do the price assets our mean, okay? to like we opportunities the thing -- for

So I position, a good we're pretty quite think honestly. in

gets to going going you're to execute and But ability to We'll the and good managers, blocking right we'll the transactions that see. be is the the if be tackling -- to term, want that we're I as will continue again, portfolio do before, the viable. not it you long is in but the price and to that said I to So open be. results in meantime, to redundant, be guess result

next question will Campanella come from line with Barclays. of Nick Your the

prepared the for Thanks remarks.

So and 'XX. I in some remarks, and some in volatility twists guess, regulatory turns you your acknowledged been there's

unchanged You from resilient order, pretty been on highlighted the But has among time. that FERC few X% X% entire order and the Oklahoma taxes, some a headwinds just rate had you other to this items. the

been maybe you just to that you absorb plan help of can in to just continue all allowing understand offsets X-year the So and kind us AEP kind allows the these what's have of where issues reaffirm? to

Well, where if that's what in better to the to road, rate minute, that know and it's In add happen. road to capital not underpins want I Chuck we XX we I resiliency back, back years in other about. to the but we're produce. might how in to if or things out And weather at you regulatory X%. $XX generally of look we that things do this you to years absorb going like a don't do But bumps we mean, the to the and going we billion in need we on you bump if cases. look you X% jurisdictions. going the it history, I it AEP other And I might I'll we sometimes forward, we management plan pretty well. -- over that, when we have figure year. historically, that? we and kick look But just have a X-year a hitting We're unfavorable file to the It's look forward. Chuck, mentioned of mean, get team -- X talked do. Yes, I XX what said were the

flat member as Ben, made said, an in what No, and you underpinned Yes. Board it's plan. remarks that while There's company that deck O&M XX-year the basically rate about base doubled capital in of opening $XX a our as keeping point right? a over his to O&M. can the observation billion you also entire period. We've I'd our this to, by X-year Ben refer chart

my O&M. I about are optimistic plan we continue reallocate to to opportunities But there. forward we're I repurpose and I grow take going of also measured that's and think load as and kind opportunities. remarkable seeing accomplishment this the basically really to about that's that remarks approach tend our a a talked we company this. in the

and that As I course, just growth development of is underpinning then amazing. earn, load economic improved we hitting We mark industrial are returns. commercial said, are need regulatory seeing is in that well. And in prudency to and activities we're there. reviewed plan opportunities not need as Right? execution make the right, sure, we lastly, the And some the good have earning we to to where

think of plan all, kind underpins going all in the I that So forward.

kind CAGR, Got kind there comments to anywhere the I the it. of new there well the say And with definitely as overall hopefully, X% to then they would see is yourself of the And expectation it back they Or just plan appreciate CEO the company? on the plan? as year, sticking -- where your to plan? of in in the guess, a that Is taking you about they're O&M. that would any think shaping X-year range that come in as of of and have coming the that right kind I we X% And guess now? size over more in, that just embrace in diversification half then this is

Yes.

the take I'll first question. So

X-year with And of based X% to plan Ben midpoint no X% and on guidance. identified let our kind the to is the there. grow plan real downs Our range between I'll really year's of the... midpoint that the ups current off through is basically answer

that find -- all, I we absolute the and think, mean can. successor best our permanent of we'll we'll first time, successor take I

priorities. the permanent process, we obviously I strategy Board and way part figure execute to a goal. the comfortable that that successor priorities. comfortable our perhaps I on looking not of think them. complete have be be discussions. will the But suspect a think I very the at That and strategic we're strategic would better I strategies, strategic mean, of our dismantling out is as also will with our ultimate with those CEO can

will Goldman Sachs. Davenport the come question next from line of Carly Our with

asset I guess, the A the retain on in a terms decision program, to the of JV. transmission shift sale of bit

we rationale talk you area your or as sort a bit just there transmission about the of portfolio monetization an going think view value of could little of about So as forward? and how on should the potentially part

and States, transmission and what in which the that let great a augment I And I'll is Well, I'm like I going what let -- provider mean said we asset. are, Ben. we is Chuck -- Transmission say, before. pretty position. is obviously, the Chuck United I'll to this largest much

don't better We do sense will to that open be we do to would have shareholders. anything. for we compelled even that things feel But make

us as forward. we I position better puts that think move So in a

want to Chuck, I don't if to that, but... you add know

Yes.

Prairie think were right, those those is, decision pioneer to our I there keep The these to selling maybe AEP, if you assets. we insignificant, overall, and also attractive contribute Wind returns. planning financing plan we're on our reality earnings to to right, -- was in referring are really assets. overall it And

transmission and we're looked to to do. before said, at back transmission right, plan other and assets continue, what root goes we the as to embracing have, in as really we opportunities that what we time reviewed it. lead it So we then competitive in the of -- for to that transmission leader that's the us Ben It's us space,

about debt Chuck, XX% that could FFO pieces to you're XX% helpful. probably expect relative what range? That's as XXXX that. Appreciate And on around for Can metrics the of debt moving a you to a that that then, little of and should for to kind watching tone just talk shift to the just bit you, of what in range outside 'XX. you move are that FFO we well for

Yes.

we that And plan. in mark the thank hitting is trend and timing we're the it's XX%. X-year there, the for then a most question. bit really message is It's through I But not So it's of on, our tell changed And go what that would really you kind on staying has is timing. the that range you on sustainability the important. as of what

we let and on and we comment a weather soft be is Right? also that didn't in couple we the XX% would Right? the So in said right, QX. happened threshold any downgrade the quarter, were, year-end, make by things. second, Note cash Moody's. And going excuses above to for trend XX% positive. We me very another is at of roll This that collateral off XXXX. we're have of

down with will is think our out are lastly, we on -- balances. And what's fuel around indicate the trending positive also, our and this the year direction right, longer the term. hitting agencies. in That's mark, over the staying we in be Those in would that and range. that range I XX-month we average. then number million review And show right, $XXX deferred that come clearly models and those in the most working models the important, of the range be the

I X not things So again, the that the important, quarter which timing, which earlier. it's month mentioned or is

comes of Citi. question next Levine Your line the Ryan from with

regulatory of and company's focus view the review you different new AEP processes, people on in do the long take? And Given the has historically? how is how strategy from to strategy its reviewed regulatory context, that its how review

case. as that is Board just that to really I make to team, very something we'll scene blocking a who this actual this of stuff rate with mean, down but gets things turn heard, the over the discussed Board involved that isn't future. Peggy. and to of outcomes it those to the to level. sure over behind is it at is going tackling, I'll Peggy, get in into need It's but get it what you. point there's in that. we it to I'm to lot pretty going really add do like we're to the processing, And a goes a This going But initiating. I've turn that planning quickly, We've the And I'm executing -- on we're better good something do up. Peggy, have -- we the Well, weeds and got much that in member a something

positive We've talking -- with strategy. were disappointments some I XXXX. Yes. there looking And some and outcomes had to in But shared the when working add regulatory I would would those just earlier, and of through bring we forward that we highlighted. Ben regulatory lag and the before. rate work to remove in address that to have that's work years Virginia done biannual for our going to help We've Virginia, legislative that's where help some done, X it with the lag. was to of review forth we going

view going to January in had we was X-step be with with earlier that We're that going the it and a -- we look improving order we in we received to very also outcome that constructive on Kentucky a much process, at said the securitization.

to So working a forward, and there. with to we going upon build I that. improve as ways on just keep we're to talented moving going to continue Ben look do we forward, I said, I agree, again, team, to and have can continue we're

balance unrelated, the your your any from to service Great. do territory? see have you benefit then in opportunity? the where sheet reservations opportunities And build-out that you given And do or constraints, data biggest center concerns around

our been If would opportunity to serve Texas. included in smartly there so the in how those it Ohio X-year opportunity growth we an that, have capital beyond is biggest plan, have figure customers. that and incremental to and it. far we have our be forecasts, evaluate would for needed The And we'd out finance

that it. And meet the with come Yes. generation needs

from the next line with Mizuho. comes Your Anthony Crowdell of question

Hopefully, X X for you, ones, Ben, X easy for Chuck.

could what -- then just seat. has Just, position a some and Ben, there's think Icahn if kind that of think non-advisory I think, I yet, position the and in seats it taken me, insight be don't Board. changes X a seems know that I about been you -- I But the don't that that X% provide. major big excuse would voting

Board? the in what Just to expand that thoughts Board change the on maybe

Icahn there's on you're that we -- Icahn. incremental holds. and seats had Well, shares And X Board I And settled like position. mean, we with right. -- advisory that X.X something I like that, the discussions million think There's

and for transition I CEO. it think was was AEP Board a to back after just to I decision what with and This determined to discussions said. full Julie repeat Julie, best we I'll new a the Board,

into keep make can full just read CEO. Board and you I'm Board going the you decision, to It's I remove but to just you need a what is. as the it full to want that, decision So a it think

to you equity X the Great. the what could to improvement It above lastly, be targeting near we XX% your looks of but the And equity quick understand earned moved. think had And And -- then questions Carly it slid Chuck, are on then, the of I I'll term? may like year? ones. threshold, timing expect earlier leave each returns, off I type there. on

Anthony. Thanks, Okay.

since equity haven't EEI. Our changed needs

the You may forecast -- with talk what shown older an EEI. I'll let seeing about be maybe we've returns. consistent, in months But we referring our had mark what go to you're right, today deck back. Peggy and is ahead some at

Yes.

for As for -- it ROE, to those reducing said some lot building legislative what that work at of already of of gap, the our from perspective. projecting just to off earlier, closing -- the we lag successes some going is regulated XXXX, with that have, we're continue to a relates able what of kind to I've we're our And on we're segments. X.X% were

of the Karp comes question with Our Sophie from KeyBanc. next line

you these a ROE proactively allocating think about about jurisdictions Just allocations there outcomes. right? nonconstructive for like should in the to for got how where and Like, hurdle capital where think is increase we quick your a you me. capital this you regulatory I when one jurisdictions? And earned you there to outcomes, strategy ones make got where across reduce jurisdictions, ones attractive? just a don't constructive your guess the And what's

going to do need to baseline Peggy that we're look safety. a and you best the that resiliency, to going There's returns. to minute, make always capital it Chuck I or you mean, compromise sure to can where But Sophie. turn I'm get to never over we in put capital reliability

to what listening frankly, gets because, but to It's your quite So can think from what -- I shape And and also jurisdictions want that we it really needs I local back regulatory need. can said. apart shape it your outcomes. that, those capital

add So to have they I'll to it team over turn if that. the anything to

outcomes where Ben's have forward-looking just we the to in well our look would continue know we to as have are I of And customers. capital there's certain jurisdiction. clearly, -- allocated reliability years. by capital amount our are. constructive we a needs test there comments echo from to perspective. what continue meet really of resilient yes, to say, needs need as we just on that's be continue I outcomes, And there what those able We're safety have to to the a I&M, at meet Those that we and

right? Okay. back to incremental see Do And generation maybe centers, going the then attractive or support customers to you opportunities around T&D data those more investment?

generation opportunities Michigan right? are there those states. Indiana, clearly, be Texas, and We're -- for to territory, there would those serve customers. In Ohio in our deregulated Yes,

from line with Fremont Paul next of Our comes question the Ladenburg.

include contribution at resources distributed guess the EEI? Does that question as the 'XX was of I outlined from would first be the on retail sort guidance. and to continue

Yes.

the change we Our based changed, the Paul. kind out on what's right? waterfall But EEI actual, guidance, right, in or of hasn't

get to concerned you go from that down the distributed the call we ability we're the take normal we to NMRD what too, businesses. forward. appropriate is coming sale we're will, there'll much through. As not conclude I'm when you on as in that as benefit But to same the would Generation took look here if plan next in process everything we the today, which retail and Ben it's be also closing more them use at to put mentioned still accretion at months we the proceeds, But underpinned. Remember, a several that mentioned, as waterfall, about that segment Marketing we out that contributions. & no, the EEI. plan, He

on is 'XX. decision have to that negative to then Or going mentioned a to be the And expected operating excluded FERC that nonrecurring? impact treated going Chuck as as be that is $X.XX Is EPS?

it's operating. No,

a guess, power in there's there's where, I disallowance the fuel costs. purchased of last Kentucky have I recommendations is, guess proceeding and question I And potential for then currently,

I happening guess, in there's think us, a an taking that take your or place could in I may what give Louisiana. are update and review those fuel proceedings? also what's be expectations you on place Can

are have Yes. month review other that. what it relates the was we your this to We -- that we underway, related waiting, excuse had been and SWEPCO? In it then from has And X-year hearing was as a fuel Kentucky, do question a outcome actually. earlier me, to

Yes.

the that fuel? of of a part the to review there of settlement as think the ability do I guess, renewables, staff on was, I

finish Yes, your ahead, part sorry, that was go question. excuse me, --

No, that's it.

Yes. that and is ongoing part the That review, well. was of as

if wasn't So you more that enough. Darcy can -- give clear but on definitely that, information some

me. for question last And

X.X% do targeting of of X% of you're hit as ROE X%? the hitting part needing past, I rate? order about the see the improve that talked necessary think I in the terms an to improvement for you've this to In being what in to your you growth type think year, as earned targeted

Yes.

our over be look the we to X-year typically So to be plan, X.X% range. in

we increase to is each through that do to looking achievable, year, basis that close XX points to be our gap. regulatory outcomes and and to able think work continue we by that, we're what So

Patterson come will Paul line from question Glenrock. next Your of the Instructions] with [Operator

So of really Am a the change -- sound chapter it correctly? just at. doesn't me is this managerial you're thinking in change strategy with looking much that there like new and to the I about

execute, to -- Yes, so. have is great. that's It's and strategy the We on, I think what keenly Paul. just we're focused

Okay. but and thing sure guess I this -- there about should that before, asked just I timing thinking be when is in then second in I'm think place? that want make terms be would CEO hearing -- we the was any to and a of I new

long to say I'm as just stay me let takes. it as committed Well,

take I hopefully, absolute doesn't more the take a it being it candidate X and needs to year. than process it But But than the time get will to to the in take months, place. it's shorter going -- So shortcuts. no can't right again, see

the about get when making those sure what than X and seeing sense having regulatory Okay. that to are the various I isn't And a And think increasing I'm I'm they terms of I'm you perhaps of jurisdictions and the saying I of rates. investment, maybe Do this -- surprise desires then new general Ben just look of a do but concerns at finally, number at goals, that to not investment AEP concern watched investments? addressing there leading jurisdictions, -- talking ease of concerns, we're have. there other guys saying? you, you going prices. obviously, And want follow jurisdictions is if innovative looking addressing that that you terms resistance lower any way you the sort wondering, in But but to regulatory you're new they what I'm the higher or number just follow those approach in the

providing we either it see mean Paul, we load turn opportunity, part that I -- can that's in the jurisdictions the great development want or think Those jurisdictions. -- I very that it. opportunities. a I big listen amount to it drive mean to the growth great all infrastructure And and I accordingly. mean I'm our to everybody economic to of we're allow but helping jurisdictions, of, what carefully or are a certainly over going Yes. wants that team, again, going need -- that's and Peggy respond in be be Chuck? to our to But

XX we jobs totaling to new territory. that. about customer add additional additions briefly and service just our adding XXXX, landed X I'll load gig And to In

how that X help affordability think as I we're that's area and well. to So aspect with of going certainly

well. that right, and Paul, to create fixed opportunity And right, experiencing is load going clearly, as improve there bigger the an along Yes. costs, headroom data base spread center a the we're to opportunity,

for joining us on today's you Thank call.

be the any you you answer always, would questions have. may additional will team give available the replay please As information? Regina, IR to

X XXXXXXX. This international XXX-XXXX the through Today's access The number after approximately Thank (XXX) The concludes joining. to conclusion replay on Time for conference you number of Eastern the ID will for (XXX) X, XXXX. hours callers, and be available p.m. dial for all conference replay beginning to replay is will today's the and XXX-XXXX. call. conference is this for March call run XX:XX

disconnect. You may now