AEP - Earnings call transcript Q3 2020 | American Electric Power Company, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the American Electric Power Third Quarter 2020 Earnings Release Conference Call. At this time, all the participant lines are in a listen-only mode.

However there will be an opportunity for your questions [Operator Instructions].

As a reminder, today’s call is being recorded. I'll turn the call now over to the Managing Director of Investor Relations, Ms. Reese. Darcy ahead. go Please

Darcy Reese

Good earnings and Power. call the us you John. third We to quarter taking today. join to XXXX for time morning you, welcome everyone, the appreciate Thank American Electric

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

opening this morning Brian are me Officer. Chairman, Joining our Chief President our Chief for and remarks Officer, Nick Executive Akins, Financial and Tierney,

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

Nick Akins

quarter Okay. Thanks, Darcy, and welcome, everyone earnings third XXXX to Power's American call. Electric

we pandemic. many us XXXX Flyaway want and fly singing, I figuratively literally. had to away, the of strong result want ability has continue for provide execute of get Kravitz we during face challenges end away, focus communities on quarter the continued challenges its I light the another probably at with and to tunnel. and the expect, our COVID-XX we the on the in know past serve growth, quality feeling economy, earnings that But of multiple third provide our get about Despite to challenges, been a yeah, of customers optimistic song to a have these yeah, multiple and AEP. Lenny and as dividend about effects of the our and the shareholders consistent there sang is Oh, be quarter to yeah, The I

the economic pressures accomplishing response drive customers with through memorable continues time. precautions, during by to guidance extra crisis We're the executing the to control quarter. with to taking as the move year, midpoint, this through and firmly this our As move working we pandemic, safe keeping employees the the our range on all alleviate we last cost in to by targeting AEP the within this

learning efficient AEP and environments, are issues being drive be. the focus that OEM to during of focus our lot a program, excellence crisis, on utility this home and strives regulated on from management, social brings value capital into of We that achieving the the also acceleration cultural the the a the everyone brand premier of work journey

highest fact, made In AEP Forbes ranked on for JUST just list. the XXX the XXXX Capital the list being utility

the the our even midst customers SWEPCO proud involved up in efficiently COVID-XX major major it's events, We and do of safe lights every manner, with Louisiana day and on. as territory. have the Delta, our And also to two I'm to service employees how face work storm a now to $X.XX $X.XX been weather in versus protocols, last XXXX, Laura year, share return more $X.XX at us versus operating to for important home quarter be share these environments. in and time. for the per per in of earnings continues this from operating AEPs at challenges. home our dollar stepped events and Hurricanes these just they per $X.XX the strong a keep effectively last came in to service performance of during bringing share share stay during Financially, per year-to-date year

$X.XX, the regarding within into XXXX. our to and range optimistic be going continue XXXX firmly progress stated to be continue We guidance to we of $X.XX

would range. said previously, our We as I I guidance are be and rate. the reaffirming to to to range our X% be growth in X% not disappointed of X% have X% that upper current And half long-term

headwinds to our with of of increase with incredible targeted of long-term the success XX% are second to the and accomplishment but we with load. approved payout turbulent approximately quarter expect this of industrial in just are the our facing times, in X% year. seeing X% in line XX%, this we improvement residential Even yet, board and the we ratio in our consistent we given An in woods earnings, middle X%. and quarter first not growth the Our dividend are rate the out of of

without However, restaurants, have such later. compensate into for AEP cutting are achieved has the losses attention our churches, today Brian, outcome detail as costs the our the on still more could will achieved not far schools, and the hotels thus commercial not challenged. loads during and economy surprisingly, economy. get to COVID from year, employees We

it but going wave it after while said, second program helped economy are economists has therapeutics the expect well come we positive to us of the cycle to excellent or continued future at and slowed, control. More set we the terms believe in very not all been continue has the of the this Most due until dependency seeing it cases progress the during And achieving to only on quarter, going the has very improvement upcoming for or losses O&M November in With and vaccines. catalyst that during XXXX. of quarter XXXX an perhaps fourth Our a EEI. commercial compensate will is into revenue improve. COVID of election and progress industrial and productive cost excellence pandemic, the the for

testing, mask We activities. adhere hygiene-related temperature of distancing requirements, protocols and social to COVID continue to pandemic-related

are key increasing as we not complacency of lost Thankfully, are but cases with outside safeguards down around inside. due confirmed the messaging apparent much anyone second work and the to virus, practicing have here. wave, fighting Our doubling is on as environment the and vigilance we

outreach our continued have regarding also serve to racial we injustice. communities the employees and We

Moment next Seize and deeper understanding exist, the reach another the last divides racial I about that As is a of quarter, perspective one initiative steps. important our from mentioned gain to actionable

potential particularly noisy I'll Ohio. cycle. change have questions Before Any past a flatly in just perspective. legislative report this head not HBX just to from I AEP's get imminent, nothing updates, say at that off election to regulatory about the I'll is the we new given

after election. hear perhaps more the So we'll

earlier, for regarding legislation legislation said technology the scale to existing clean and energy at still be customers. energy to with any options, financially looking other we've AEP, change insignificant forward enhancements is likely efficiency be and grid and we will As our pushing

issues Regarding HBX, the on this also subject. report stand my new nothing comment and to surrounding previous legal

the system there's This our we activity, regulatory pandemic acknowledgement one that the pandemic, criticality update, of apparent for of and have and customers the workforce. communities. to year, Now overcome become weathered the has significant if of that and our a challenged our that is observation through the this service have we storm through effects it provide

be of our customers to to communities, meet expectations our with fundamentals work company able we we the continue As strong regulators position to stressing a the and sheet. are balance to the of

have quarter, of before well-positioned our communities. be are most X, our regulatory our to to state previous base as than provisions more for is prior most you this with settlement. Now needs for customers the to ever, June have is pending returns terms stipulations, needed of And all our case required regulatory the meet operating its needs a investments. and companies the flows cash essential or and know, recent number out attract ongoing capital of conform which into we Ohio of address stay needed necessary of timing followed regulators it ESP critical to the to the to proceedings

case. schedule in increase yet ROE, Virginia a rate base filed that has million not a $XX a seeking are as required law. XX.XX% been established on with procedural by its March APCo rate We case

the We have hearings to submitted for and completed been commission the case has decision. a

a pay stay and our the The to and obligation opportunity an allow In we an costs to XX customers afford the filing our to received trien to the next an million increase regulatory taken yearend. has but our where to with company for company under Commission the XX%. request AFDIT customers June years. residential need is November. elected $XX this use funds from filed who bills. case, we arguments, expect of million confident asset past ROE was a authorized The case the of and were over unprotected out on a jurisdiction, the position see rate not subsequently expected subject decision depreciation for which We their least, the to not these return. this Hurricane approval provision recognize XX, year. cannot staff asked to an remain recognize sought earn by until Laura. have to the remaining have will to asked create in law Kentucky with combine fair and this AG, opportunity for A We through ROE associated in with for in disappointed SWEPCO period. offset the that by Kentucky base earn $XX.X of over a of rate [ph] both the to return X.X%. their commission rate increase experienced case Virginia the commissioner June we bills Last resolution have Our also with fails our base We we to a net

increase will Texas, hurricane October are to XX, $XX.X our of associated and safely outages filing increase we case increase hopeful customers. this that to to for Hurricane put and for We season we ask base a minimize In seeking seeking treatments vegetation risk its of management an the Delta, storm us. rate on million the are similar with We're costs year's can SWEPCO behind made the expenditures with also where our ROE reserve we future XX.XX%. Texas

our the the Arkansas on continue final customers Invenergy to preparation to locations. will Sundance on of Foundation Louisiana, progress by Traverse make is at North site end facility, is benefit first Central and the which and We projects, in currently quarter service expected Oklahoma. XXXX, in our both Maverick be is commenced which completing Wind work

December Traverse acquire to XXXX the quarter December the of continue facility by We first to and timeframe. the Maverick expect facility into XX,

settlement forward some our the our Oklahoma. projects greener Arkansas wind settlement in these in future. true energy will to We're and up bring are a by helping and our providing advance of looking to that filed the access PSO have resources benefits true customers, We finalizing and richest up SWEPCO nation's to

the about So now that. to equalizer I'll talk chart,

the on Page presentation. I think it's X of

is current know And our mind to they generally XX% not X%. the to ROEs And returns are equity below where just that well. in keep also ROE normalized. X.X% you as certainly, in range. thickening we target we're layers So be these about The

case ROE legacy the authorized rate XX%. we've to I due that the the for So, the offset there. of off to been also of first, regulatory years, mentioned It's around the I'll just RSR. talk regarding we trend AEP yearend favorable talking primarily authorized roll and expect by above about the items, levels [indiscernible] about issues partially Ohio the But

associated already costs authorized, is the XX.X% APCo, lower as Mitchell higher then due rates. partially increased January of capital stay from but customers, during depreciation For Virginia's there, case plant with higher interest rate offset Wheeling O&M economic through last a mentioned along I've and below loss load already out see to can management with the Wheeling And and earlier I'd you well-below expenses. became and period. Power's major in slightly Effective Kentucky, discussed usage authorized which XXXX, discussed loss of conditions weak review. investments, I continued due from they're the of below normalized the APCo and tri-annual recoverable by of expenses

rate yearend, level normalized ROE trend So, to of due the end industrial the Michigan X.X% authorized tracker, slightly O&M XXXX the earlier. a and of to PSOs work there. expense authorized of end retail in about $XX about expenses. recall, is in and primarily SWEPCO mentioned effective weather Arkansas increase an XXXX, base recall, associated make the not and lag in SWEPCO, is case In quarter, as XX.X%. track in rate was impacts to distribution reduced lower ROE as is a settlement basis to unfavorable did that continue onetime of expenses, around ROE not the due offset it PSO, authorized course, approved also during with a due by below much ROE by of the lower December offset Its quarter in case, the of its and at usage approved related management you SWEPCO the In recovery filings. Favorable authorized XXXX, tiny base authorized, with so partial since lot Texas, it to file ROE in continued Arkansas, as for in At consistent pendency X.X%, or order of third regulatory of our finalized continued management at progress we is commercial ROE ROEs was we'll case received X%. was case and being partially filings, Texas of filed there. transmission XXXX, have a rate TCOS partially below XXXX to million that in third AEP and and for X.X%, we've Indiana. in of point. previous X.XX%. and those to to ups, AEP and the cost of Texas, of I&M, October its from case annual base ROE treatment below adjustments is revenue We itself. allows do make annual its this you by filings sales. interest and Turk many O&M Plant we XXX DCRF projected was points. rate ROE I its by true those rates XX% I&M filed I&M's above

impact authorized earnings XXXX. in trend a the in be long-term, continued of levels filings that three ROE. been expectation of in while X.X% finalized should investment the there's rate resumed think base around the ROE have an and will case improve but by the And towards Texas annual been for is The with end filed. probably XXXX, now of I cases ROE X% to

by company forecasted the as in far was authorized over an up second XXXX to below AEP it driven and of of X.X%, true ROE quarter As transmission collection Holdco was XXXX return is is Holdco operating annual occurred. revenues. concerned, the revenue Transmission now X.X% the of Transmission This look the primarily the first to range The average Transmission which that XXXX. in quarter. our when in note, the interesting also actually It that's quarter for is jurisdictions, is happened largest, you equity XX.X% has that first at to the

same being our service is the So, time, of is making the a the to though lot relative investment transmission certainly to of made at progress. quality But improving customers.

customers’ making we're its improve with progress T&E happy investments the very our ability and experiences. So, around to

service needs out that of close, weeks under was remiss officially customers several of and thanking decades Oklaunion and I'd the construction resources, retiring, resiliency the people Thanks years. college. it change to over we the to employees after ago, the assets demands providing Oklahoma. retired with you And further time I joined be XXX not Oklaunion employees a have AEP Station I but AEP in when change also was and about just it. at all generation the the from As in our Oklaunion again Power see of meeting and years, of the couple last our illustrates Texas occurs of electricity the through

AEP it about Van as quarter clean forward company beyond. latent solid and thinking and resist future energy we'll we in This even We AEP a overcoming resiliency let of will the grid all-in-all, work I shine. late into for and the So, XXXX transformation had I our the the the from can't to we the environments, reliability on, with of, time, Eddie would support of the of of to it's with when for home convinced in of challenges moving further resources, be and value post-COVID, electrification AEPs time, or XXXX. beginning economy. which stages need about time's stronger this move the and Brian? say right words Halen, in am the

Brian Tierney

our preview balance Thank economy, load provide liquidity I sheet Nick of good and with us we on year-to-date the in conference. will through insight and you, review will the present and third results, finish some everyone. financial the take quarter and EEI at a morning, what

to share, the $X.XX periods. operating third Slide the earnings quarter compared per $X.XX GAAP a GAAP compared Let's share, through quarter per last per earnings There's which share of per GAAP operating were to $X.XX reconciliation year. and briefly to shows to of share start presentation. X, were September Pages $X.XX XX to on comparison GAAP the earnings year-to-date earnings the XX on for for XXXX. in of

were The down per $X.XX. the improvement earnings $X.XX turn last $XXX revenue. of at third distribution operating XX% share driven lower This Operating X, to favorable offset investment produced were $X.XX wholesale drivers AEP in earnings segment taxes last per as items continue earnings up for margins. since or as by utilities unfavorable for transmission revenue, interest weather, was and in quarter revenue, contributing was and primarily XXXX. partially reflected O&M. segment. per and share $X.XX or temperatures other warmer year, and including O&M, $X.XX. fourth in timing growth depreciation, Favorable segment taxes an lower year. vertically earnings look $X.XX of and year. Slide changes million taxes, Holdco to Generation unfavorable net $X.XX Other share, transmission particularly to The items Let's operating and primarily rate that This by on included $XXX transmission by changes integrated as timing share as as last well Favorable due the September. of marketing grow, earned to to million, the down $X.X share This from were per Operating the well return or weather, year. quarterly than increased load Transmission per rate $X.XX compared normal quarter. by were depreciation income utility higher last $X.XX higher by in share These drivers driven plant due from wholesale items lower operating and lower per included higher averse and $X.XX September of around expense. billion favorable

primarily items related that penny by up reverse consolidating was and taxes driven corporate year, year-end. will Finally, from last a to other by lower

or billion, $X.XX compared Let's $X.XX X, Operating XXXX. to share review through $X.XX earnings year-to-date Slide in billion and results. our turn share per or $X.X per to were September

$X.XX drivers legacy riders OCA the interest last $X.XX items of and earnings up in true utilities across revenue. from to the and the unfavorable ups. than lower included year to Other items integrated transmission both earned vertically at O&M per this Transmission multiple expenses, expenditures warmer due penny true the AEP share, sustainable and timing prior down [ph] to O&M, increased primarily favorable year. Ohio, settlements. to this of charges, share rate higher of was AFUDC. The offset true and in time variance The decrease was Weather expense, reversal due in higher concerted Texas tax O&M a summer to The on impact tax a unfavorable transmission in segment changes rate roll investment were driven comparable transmission negative for the Favorable Ohio. and and Other primarily also included were the impact operating one warmer in per last due contributed depreciation up revenue due FERC to segment Looking These through per regulatory primarily higher Ohio off winter year temperatures higher XXXX to Holdco effort weather year. mostly jurisdictions recovery by prior drivers from segment, and by down provision the Other and due the normal distribution of depreciation and revenue the decreases included and was $X.XX reductions. share of smaller by and a changes, O&M lower the year segment and last carrying year of transmission XXXX. items $X.XX utility impact expenses. annual transmission

last and The impact on investment the year. offsetting per business on business. generating other onetime fundamental wholesale asset around and growth $X.XX offset acquisitions produced sales prices Renewables and wholesale income of and marketing return with a margins O&M the timing grew more penny Generation than items weaker Our up continued. lower taxes. retail from share,

interest $X.XX lower in operating Partially Overall, $X.XX annual of offsetting reversed to Finally, that pleased income offset per consolidating related year share. & financial a the were we our with adjustment. Corporate O&M. items $X.XX these by our and per items down are earnings confident was due higher are taxes prior by to and to was share guidance yearend, tax in Other results confirming

reaffirm our Turning guidance. first to retail we shared topline, the sales during forecast. assumptions we earnings Starting Slide call with let's recently the updated to review quarter X, the

came to normalized forecast the than below now higher Third projected. load from previously quarter XXXX first X.X% the expect in quarter. X.X% is sales better We come than in which last sales year,

improved, used While it earnings. helped the favorable the the outlook guidance. forecast mix for has still below pre-recession our The is on mitigate to in impact has sales original XXXX

item of impact second weather. The the was

the second drag, second quarter significant mentioned the weather we slightly weather favorable. While was quite quarter weather first third a quarter quarter presentation were that, July's impacts the produced and In favorable.

September and August weather However, was mild.

now have cost expense. originally O&M a results. the earnings impact drag $X.XX drive The on a was track weather result, on we had XXXX As to O&M expect to and next the planned We XXXX revised item billion this both expense decline, on to response identified we billion In and sustainable $X.X in target. track of $XXX additional $X.X sales an the lower for from reductions to savings million XXXX. onetime down in to hit are expected

made identified be we quarter future support this We of $XXX of during our capital in could to approximately the expenditures through that expected years. position and first decision Finally, shifted cash the pandemic. the downturn XXXX in million the out

earnings expected at we XXXX. we've approximately As back the $XXX million better of reinstated have and than second call, million the come in $XXX results discussed quarter into

reaffirm XXXX range. our these key progress able earnings we the were made assumptions, guidance operating to we've Given on

you at load normalized beginning to summer. the sales up sales to right increased the work our quarter. in the from our quarter third load. In jurisdictions. this normalize quarter. Slide down in normalized was all in The last by normalized sales growth people turn lower the better first to update residential moderated forecast has the let’s were as left we are year. XX, down X.X%. Now the the We quadrant, on Through shared residential sales Starting were our across an load slightly normalized the September, with was pandemic. provide Year-to-date in X.X%, than corner, our residential upper sales in X.X% significant our up Weather X% saw increases over of residential residential return

decreased the third decline year-to-date X.X% Moving bringing in clockwise, by sales to our X.X%. quarter, commercial the normalized

came schools, As declines in biggest class this the restaurants and hotels. expected, churches, from

A sales declines lower is year-to-date of Finally in economic sectors overall the decreased decline this to industrial X.X% quarter, biggest in The the X%. industrial but the activity. number changed have for by chart, the were outlook contrast, driver left posted primary biggest and factors that bringing followed a quarter the class, and of manufacturing territory metals. extraction the gas the recovery the oil Overall, By strong growth plastics earlier to in and load mining, for we the pattern rubber automotive posted related anticipated the across service industry. quarter the year. the

During remotely, some the its territory Because for second will and working hit quarter, lows. commercial and residential our at to sales to then, been normalized a industrial time. some levels residential back continue continue sales our to sales peaked their Since higher work has service we businesses more expect way levels.

Let's why a would the of into for quarter lines shared At we of quarter XX. The weather first by The a look earnings economic regarding during load raised normalized and outlook and represent the the on take green lot deeper that the solid updated customers XXXX. duration still our Slide how normalized there we end call. growth load respond. forecast uncertainty represent load time, was slowdown bars depth

the accurately quarter forecast the quarter, forecasted. depth the contraction a results that in indicated second predicted recovery better our of than While third

barring trend a continuation latest another economy. the of this view, shutdown of anticipates Our

and move capitalization company's let's to on review Slide and the Now XX liquidity.

and at quarter stands Our XX.X%. ratio in the to debt capital unchanged third remain

fuel during contribution. storm basis, of debt a Moody's X.X% to cost recovery, a to timing decreased XX.X% primarily FFO due on the pension to ratio deferrals quarter Our and

Importantly, the end we metric year in guidance provided. consistent to the expect to mid-teens, the we this with low have

supported facility. Our credit a liquidity at position remains revolving billion, strong by $X.X

finance like Wind I to the Before providing funding, the on Project. discuss pension Central update plan an North to would

reminder, with two-thirds completion We As we in projects stated to have Central billion the to three plan equity we comprise that finance of approximately individual the North to equity Wind. issue use that this coordination a $X intend of project.

traditional as this offerings. flexible will deliver This asset at earnings approach For growth avoids a as helps unnecessary us mechanism, to well include and the the secondary rotation, we on approach reason, which dilution market take X% and rate. could X%

$XXX.X X.X% our The Funding plan to for that in plan's contribution the to also increased to X% the report from and I amount XXX%. service OPEB cost Turning pension quarter am of to million. the was the driver the our during annual benefited pension, funding returns Strong pleased increases. equity primary a increased company XX%, of

can wrap Slide so this your we up to Let's questions. get XX, on

reaffirming XXXX operating guidance to We $X.XX share. earnings of are our existing per $X.XX

Our we message leading premium X% way forward in line growth as at the a ESG earnings be with with EEI to an will X% with that utility growing dividends are earnings. delivering focus regulated

the North includes in to benefiting plan PSO we as and billion Our energy project transition $X Wind Central in Oklahoma, our cleaner SWEPCO customers a future.

will EEI XXXX year. full operator your with release with of last the late segment we conference provide of questions. expenditure did a over couple and One the I item, will filing you the With XXXX the and we call many We in to weeks. detailed at like year our for for XX-K, turn the XXXX, drivers talking quarter coincident guidance earnings earnings in fourth final plans. by virtual updates will February, XXXX that, in to to capital and financing We of forward look

Operator

go Instructions]. will to Julien Dumoulin-Smith Bank Lynch. Please you. Merrill Thank with we go [Operator of And America ahead.

Nick Akins

morning, Julien. Good

Julien Dumoulin-Smith

Perhaps Hey, things kick howdy. Thanks time, for off. the just guys. to

of from play your Indiana, APCo? perhaps many And can the to Virginia. in your you in seen peers also some that about little How changes some last about X% of pretty reaffirming few rolling into or reaffirming we've the talked talk EEI that? Specifically, peers similarly about what's in opportunities. and X%. bit You backstopping Can months, in substantial are the perhaps talking out a preemptively

perhaps Rockport. have all You

about talk you role if conversations the forward, that or if here outset. curious of you can at the don't on mind, foreshadow Just perhaps some

Brian Tierney

opportunities lot to enables legislation Virginia a think are of Act Indiana we're transitioning things to generating renewable addition North carbon-based a we're and how in to enables from of that Wind, Clean that the much I fleet as the talk Julien, Energy in Central the renewables lot well. going more about a

lot what a take detail provide EEI looks on to we're more So that like. through going and that you at

You in requirement have renewable Virginia. the

there. got fourth there. You are to various just in here And did Ohio well. brewing continue applications have we APCo. Michigan, We've mentioned areas in also in renewables, we renewables also doing requirement renewable We're Indiana, sale the that then as And we also do Oklahoma.

And have at about. renewable way a more relationships spend about Planning with then a is to And standpoint. the the us to of do plenty resources. I you we as runway opportunities and regulated I don't through if to that think, it also from individual massive the it's on don't of available talk as maybe process. the we particularly continue see renewable the the spend we'll But Resource but we've customers, Integrated And will got we just pretty AEP, terms should So, that, talking we side transformation in substantial. precipice look well, we're

So EEI. November at that we'll certainly talk more about

Julien Dumoulin-Smith

if Thanks here, you Got are of factor don't there. updated mid-teens. me want prior but an about I characterizations you definition that more this on FFO at point? to of you tandem, entertaining you it. more Perhaps, can mind. in XX bit if little here, for detailed provided get low gave of a you know Is I to here? view Moody's simply mid-teens of a this under total Or rolling how forward debt perhaps thinking versus all

Brian Tierney

August. it much originally is the consistent FFO being back occurring taxes be regulatory deferred more to more jurisdictions to thinking adjustments Julien, incorporated quickly. thought, Moody's completely they accumulative remember we in repaid of continue to quickly the debt. this when income five with to than on And years. made improve some outlook years. turned And was occurring messaging prior are And And out low XX maybe we that's in as that that that to is will their mid-teens our

will rolls So up pick metric debt that FFO to that as off.

Julien Dumoulin-Smith

Got Excellent. Thank it. you.

Brian Tierney

Yes.

Operator

question from go Evercore next Our Chopra is with Durgesh ISI. Please ahead.

Durgesh Chopra

next year-to-date, be of X.X% good X%, color Great. into Hey, two, could $XX you morning. year? quantify some you'll Hey, digging one? appreciate part I we degradation And that forward the in year-to-date share should million bit XXXX. Thanks. savings O&M what assume sales at carried us that a But for was to just part EEI. little into more

Brian Tierney

Yes.

residential. is load expect. largely industrial let commercial and the me being with what It's start sales. offset So decrease The degradation. It's you X.X% would by

And so, the residential, is numbers raw really just than looking it's what industrial, the it we've mix. and more takes on seen commercial at

do You mix better industrial. than remember, beginning that come we at residential the we has commercial margin the had on pandemic. make and in anticipated And sales than more we on of

So, of what's it's because happened just not been decreases. it the thought be as sales what with rather dire than as mix, the might overall we

positive. that's So been

O&M O&M in doing $X.X for range very tightening billion anticipate on to of billion towards forward number what lower doing our Looking with that I'd with and around going we're have very, belt us end and and achieving non-sustainable years we And O&M, that sustainable untracked a cuts, of we're everything range. $X.X the with forward. been tight been excellence, else being

Durgesh Chopra

Understood.

Nick Akins

improved obviously, back and side, the see we a from from comes which to just I look learned is. in on as of When mix, at the have support of better, home have at the you commercial be believe by it economy industrial mean environment. assume still, But moderate residential particular. commercial residential. mean, work longstanding virtue forecast, if to it we remnant I continued is you we don't load what XXXX going companies will you're going that And the look

least that a other and you activities ensure savings lean associated a to before. and change the fundamental is on capturing of And picture load. budget all achieving process did with our we're along little of part step every then on a focused really has that the augmentation at way. look a we excellence program it regular and things it us financial And truly the this bullish and So, then O&M at I'm the been bit for when load

achieving So, progress about good excellence. year-on-year the feeling of pretty continual

Durgesh Chopra

That's Thanks be plan in great, guys. thoughts AEP? initial Maybe and elections, on I for the appreciate that but and details, just color. taxes, initial going to implications that was for climate that thoughts

Nick Akins

what's into first Yes, here, going continue managing it's got the of do here, so history who we knows so happen cycle, noisy I goalposts we've economy. between years well, that. election all, XXX that focus never on energy move as our But guess, clean to a we'll is of to election, And know. and the certainly

it will the nevertheless, if difference maybe the occur that Trump. at is Biden which But much obviously, pace really, administration the versus a doesn't only there's So us, change change for clean making as the we to into to happen. because as ensure we're we on future can, it's that know quickly energy are that that economy focused going we moving transition that

Now, future. delivering who renewables are customers knows our for transition for in natural we where fuels, technology even fossil to that some gas to certainly go, will the but we'll that nevertheless, and ensure continue

original So, I perspective, continual about, what know we as the doing, record latent, what making an of they we're with our when electrification that from certainly And it undeveloped message O&M you find we're generation said, activity or the as we of client is in write around we the And have And I automation. of where know economy, progress. used and ahead I seen transformation, why get then, think we the make that from transformation my with around continue see a and is, community to because ESG digitization we'll of then up, an we forward think what us. word course, excellent that's somewhat and a emerging progress. the they move

So company good pretty is feeling that's, why where this about that's I'm heading.

Brian Tierney

until the we increase for proceeding, ago. that to our If taxes. on years allow a Really, and three to where higher We cash we reflect we the were income any either out us reform next would an or how come or wouldn't that issue, taxes, to rate. increase earnings rate allow event, of update anticipate rates be adjust the deferred would quick they'd we they tax in significant it. just four a two In the going expect be kind to that a to they would new driver handled anticipate one forward. to of or tax commissions Just to it anticipate dissimilar have order expected handle company ways they one not have

Durgesh Chopra

it reset sort a flow, of things. given other be Great. like a cash modest into delve could Thanks. But amongst in AVIT and [ph]

Nick Akins

I think [Indiscernible]. the

Brian Tierney

way Yes. we be to one other. anticipate significant or don't Again, it the

Durgesh Chopra

Nick. Thank Brian. Thanks, Understood. you,

Brian Tierney

you. Thank

Nick Akins

Yep.

Operator

next is Please James Capital with Markets. go Our from BMO Thalacker question ahead.

Nick Akins

James. Hello? Good morning,

James Thalacker

Good questions. [multiple real thanks, Hey, about quick Two the speakers]. morning. I guys. apologize

in maybe issue driving I Could that or service I by it? Just wind, Traverse noticed to a Central of so. a in chain about something could talk the was guess, Or extended bit slides that that be kind North you there's look outlook? be a like Brian, related else out first, just potentially supply pushed little addressing, COVID? quarter just Is that

Brian Tierney

physical to of ability get things. our than has so it more permitting and the It's do Yes, lot to actual done. a like

We that material like the teams. late And to so get that searches into of early things was big during at And land year be the that have in associated next do could this due would to those hard issues shutdown, title unanticipated anything just that us come it with one We're and the offices, to potentially some pushed which not of back anticipate that. it is year range anticipating largely able to there. still signal of online. a when acquisitions, COVID project

Nick Akins

of we require not be range when payments, particular the going obviously feel we it first But range. it the the fall that progress we're in that remember, end into summer, confident we're making either. of quarter, but It's it's any like to James, Hey, still sort done. it's of could

financial it's So perspective fine. a from

James Thalacker

the three potential of to guys ways And the has give on probably something I year. to rotation XXXX? acquisition finance guys, as following saying, issue. Okay, something death. you be thinking year, end modeling about you an a were be same I or because that the maybe guidance, perspective, Brian, been you sort ATM those just obviously, the you coordinating asset you the full something of beat would to of How are XXXX Thanks. guess close great. up that this would from as of guess, block it But but think, sort look equity, I even and talked really with spread about, final closer over present as to final

Brian Tierney

matches $X.X The comes aftermarket we one we're a then anticipating come to about -- online. asset them, done, about XXXX, commercial million Traverse, comes an on of And time those the project very issuance we XXXX, which the when last about don't project given saying is if you one, we in the of equity being equity that's that the of end believe was nature the when the late or what then going get what which And anticipating online. able those billion we're at flexibility, discrete it $XXX with issuance, the whether James reason, need projects And quarter the a closely We'll is very, million at completion issuance next project. can closely We that with that Sundance, it's when closely with kind be follow talked that we Maverick. program, and to the rotation, is that's that discrete projects until project, is we early time is the really about project. able a online. be XXXX. time first $XXX we're is get It Nick the very to which XXXX, of don't projects look

timing that going talking modeling is shaping repeating a insignificant myself about be it in XXXX. to So and And standpoint, we're the from XXXX. to really start I'd

Nick Akins

also at. we're we're the assured mentioned at Brian being looking And options internally, death. the James, rest

the we'll decisions sure that relative right associated those making we're timing with investments. the to So, make

James Thalacker

gives answered kind space, question down. kind had, going No lot flexibility. just back worries. guess, The I it and was understand service you question, a dip of you of trailing initial I XX the guys the and to in FFO months last I my of

in Are You your you 'XX, trend still targeting know of low you thinking I into 'XX, where kind the 'XX sort guys of you guys were that I of cash back for flow sort to of mid-teens, recently. were sort that timeframe? looking updated that guess. for forecasts

Nick Akins

yes. we It's that timeframe, are. Yes,

James Thalacker

the much you perfect. Okay, time. for so Thank

Brian Tierney

James. Thanks,

Operator

ahead. Please go And next, we'll with Sachs. go to Goldman Michael Lapides

Nick Akins

morning, Michael. Good

Michael Lapides

Thank guys my Good LSU your question. sorry for morning, about Tigers. taking you Nick. Nick, And

Nick Akins

with good doing is Alabama I'm Yes. happy you're sure that. though.

Michael Lapides

if impact commissioners in rates. I if flows goes me due or think tax a way through I assets up rate it's AEP. and standpoint. that tax for or PSCs, there's policy out I get if or to utility it or the kind numbers if offset? or administration, there's seen Yes, let's is customers. and customer come coaching. But much whammy, one bit at a staff size of And a just in is just around higher do also XX% back double tax cost the service kind little rate on others, and slows asking tax maker to does of [Indiscernible]. floated from the we’ve the you're the How to What's get that think it's another regarding as pretty you're strikes I coming of it down not I a get a on increases back But say flow And higher hope downturn. what change commissioner of could Uncle for keep be want decent about Brian, increase an customers an Sam’s state, it public the who because given they must probably of declines. the going next XX%. the the rate, so rate on corporate economic to or corporate rates. year power heck or earnings But that state talking PUCs of for to

Nick Akins

there's Hey, impact reduced, I because reductions of to think there's was -- in. back you're those doubt be taken will there an And certainly again, the put that right, it that is going no no lot is there to advantage doubt headroom and think that with it a be with that I tax occurred.

of a looking those and much capitalization hurricanes, Now, kinds so also you're achieving with wildfires, at we as that that. as for kind time cyber, put we back But the all when excellence, continued definite the why as in and it's as frame quickly you're question of important rehabilitation But in is so we forward and what of that dealing of supply, to to impact need mitigate us to have face it move how reliability accelerate possible issues the to possible. that resiliency thing. grid to or still, ensure and of respond have that can for that's particularly

be our measures. but longer and it's rate time reform that commissions, And, the excellence discussions achieving of new So we possible didn't think make associated mitigate we'll tax there'll of period much increases have as unavoidable, I it's sure the taxes. incumbent when implementation it's with like unfortunate over certainly if be a to we like issue discussions like And we we other to do much occurred. have as keep continual do then program for We return it a taxes. if some recognize. it rates back not to moving need there because as around, of as as regulators going would we're had suggested, our and that had us becomes could And forth the industry our with vacillating volatile. with And we continue it on just reserve be ensure mitigate customer that's to that even to this, pretty

that's always supply. that's service that the the I'm do and change the AMR from cost not to going because think activities of everyone can meters for thing residential is going nature of one be conversations. AMI of make work why those to effects things the I in of well we look have do example, with though of is for don't but look and at home, we you AMI to the the is, sorts the do need All importance no at AMR. we that's we watch will balance into AMI, to all want troubled Netflix versus nature change undepreciated their the provide, home. by that the associated investments AMI, or So, mitigate saying there's how to they the able forward. play of that And to And come recognized, is question those But we'll point commission the at here, just your also we'll what it's

adjust and opportunity got those just decide to in to you're the things into customers’ opposed be the as energy that's the forum. picture their to that, to system what efficiency and at leveraging and You've and of customer drive to look the all give to that do able energy ability own

make And as going to need as with be as economy, more focus issue of there's the discussions electrification regulators opposed what to our total headline that's increases. just actually we So, resilient, adjustments sure the lot future reliable an economic we have I more on really make means. a things need our on to to to clearly on on and that customers deal to of think are about also that with to opportunity dealing but rate give bill a them their possible, with

Michael Lapides

and unrelated. talked Nick. question, about growth where totally And then I'm investment. for Got rate not sizable about it. other thinking you've base really Thank that, you states one

West One a transformation like that you about going out Virginia. pace those of Virginia? West stands little do a generation the bit state think forward, in is How of

Nick Akins

severe capacity on steroids. And our weather, investments, looking the coal where, in summer. Yes, the think lower really like there's you all in transformation warm and really run I we're capacity, how our with that you as I still at factors and And capital. have -- even available and we states moving the quickly cold coming in as those to jurisdictions, step have think it's on is of weather example, think, process it. when our you be will that no we're like T&D look in possible, now at significant But question then we where and forward state have states based but I Virginia, going the forms sort of all of energy West units, they coal resource fired making all for or but we of that if dogs see be on changes planning times other the be first

interim, run that also that transition way a facilities it's So, we forward. it's going then but these the make during we

all conservative making fairly I have true in our jurisdictions. jurisdictions of for think And been that's that transition. the

that pace emissions the plant. on our bipartisan a in result the even lower as focus of think though, I quick continuing can to and

in own are be happen, quickly proposed legislation the seeing the we if you're being from knows possible. resolutions, occurs So, ensuring helpful I And Republican national that some question. post-election, are that think moving as you a as but particularly still can there's then and forward with states have who see, that their actually, I answer catalysts that's that to standpoint and there. already And Democratic what'll and tries

Michael Lapides

Got it. Nick. Thank you,

about both Sorry [Indiscernible], the and it. Thanks I appreciate guys.

Nick Akins

No, that's fine.

Operator

Our go line KeyBanc. Karp ahead. Sophie question is with of from next Please the

Sophie Karp

Hi, questions. Thanks taking good morning. for my

Nick Akins

sure Good thing. Yes, morning.

Sophie Karp

kind to and activity. case load I'm the back curious, rate go want I composition of to the

So, dislocation but higher, have And not continues is a we residential, as where we load picture. this persist, roll forward it's where that's to really maybe suppressed. situation and be unusual C&I the normalized

rate rate you just and So, if like? here, you normalize? now, your to do my you cases future address attempt Do cases where guess. the actually that's period through question, with they becomes So, I go look that? right? go first what this test your Did How you

Nick Akins

Yes.

have right. we utilities, So, multiple

at with not to to of say we we to right have activity case discussions things only saying investment we're important we're have ensure opportunity to Not with that on relative go on, right the we spinning spending when that rate capital what anything, Commissions we're through the about or around the it case, to to load that, time budgets So, that it's move but filings, are rate will is what the results that the the the trying be. spending time. what

about not willing if make discussions to are rate what increasing, the still obviously, we are obviously, regulatory having It to two, to if because based for help us what the that's helpful. okay, is it So, priorities certainly for, isn't, you're with load jurisdiction are priorities growing, challenges denominator the the exaggerate. pay it on is If not exist. impacts, is the Commissions each that one, number what choices number those the growing. determine, denominator But

them like a for those we'd period of some time absolute that are out we of before do, that to work but it may have bringing And be of priorities things and are some in. longer to yes, that

continue all relative the we'll And is there's going been with occur, our where have whether has whether downturn. Commissions. And in or kinds done, dialogues that well, should So, it's prioritization economy that the we to a of economy doing gone, that what be.

upturn. an toward moving we're think I

to that's helpful. So going be

Brian Tierney

so jurisdictions incorporate small already a And are be looking that have to also like we'll we then test have residential decoupled. forward looking places Ohio, we have able commercial where and years, Sophie, some forward view.

So, mitigations there right in unusual are find lots we to that now. load of ourselves circumstances

Nick Akins

had moratoriums COVID a say, things to react. these the have we and so we adjustments known at actually, of some themselves, had be you on cut-offs. then of reasonable sort of changes to XXXX to these are the And because to had we is make test and circumstance and And COVID. too, look going Commissions year customer And unique

So, coming in made that out process, is we'll as that process we all adjustments I and well. of there those adjustments think make

Sophie Karp

you. the Thank if And a on Wind. then, I follow-up Great. may quick Central

You mentioned at of of considerations Or assets a like for Thank assets as more we the Is this I be rotation, financing be? guess, something you. your could might churn a one-off more What here? equity there. in with those situation part looking strategic portfolio?

Nick Akins

in that's be and a project. about how Well, anything what we finance right going at key sources it major do uses. our And of the be a management future. now of potential we assets, Wind, sources so the Central part we is North we part portfolio, And where and when can we in everything, obviously, we to and at portfolio the do look use is look talk want

at to we're focusing and So, I a looking is be or I'm us what perspective, what that on at say, this like everything But will from anything say specifically to on source it's that incumbent looking not then point. Central, going how that at, to ensure way it continue projects shareholder able transfer the to will in and that. like capital we into deploy our do we best really value. be and And North in way fund to the best

sort what got you of think the year out. I play So,

Sophie Karp

you. Thank

Nick Akins

Yep.

Operator

questions, turn to I'll back it with yes, And you. no further

Darcy Reese

for Great. Thank call. joining you today's us on

give always, questions team available the please information. IR to As have. replay will the you any answer be John,

Operator

at Certainly. XX:XX this It last Time, And midnight. at available and October for starts conference and will October AM XX, replay. Eastern gentlemen, until today Ladies is XX,

That code XXX-XXX-XXXX You code at access your does your XXX-XXX-XXXX, conclude is again for time numbers any access XXXXXXX. or XXXXXXX. dialing you or the today. XXX-XXX-XXXX to We may XXX-XXX-XXXX. access replay Those participation. for The thank by conference

disconnect. now may You

American Electric Power (AEP) 22 Oct 202020 Q3 Earnings call transcript