Earnings call transcript Q1 2023

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

Operator

Ladies and gentlemen, thank you for standing by. Welcome to American Electric Power First Quarter 2023 Earnings Conference Call. At this time, your telephone lines are in a listen-only mode. Later, there will be an opportunity for questions and answers. [Operator Instructions] As a reminder, your call today is being recorded.

conference Relations, to Darcy the President host, turn Investor of Reese. now call your over Vice I'll Please go ahead.

Darcy Reese

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

website Our our slides available presentation release, related financial aep.com. earnings are information and on at

statements. our we be making to There filings that factors many future discussion will factors. forward-looking results call. of to Today, may materially differ Please for a these from are SEC statements during refer cause these the

this Joining Officer. Sloat, and Chief for Ann me President Officer; morning Julie opening remarks Executive Financial our are Kelly, Chief our and

take will questions remarks. We following your their

now to call over turn Julie. will the I

Julie Sloat

good with to morning. Thanks, this be quarter Darcy. Welcome everyone It's AEP's everyone to first call. XXXX earnings

and and with delivery billion our five-year in on remain an continued transformation embedded direction energy capital fleet strategy track all emphasis our and is on generation our investment plan. $XX infrastructure, which Our

continue on an some with then to financial following the well. of come with as our to us implement and stakeholder plans and important review needs first, our operations ensure our communities' enables on with transaction and retail new which I'll financial know deliver our legislative our insight of to sale, into we commitments some closing Kentucky other the the met regulatory are I'll updates initiatives progress you front work to our customers as renewable Liberty. performance first and before before unregulated on our termination start business overview provide quarter discussing contracted strategic for

today's on XXXX business Slide our first X can highlights A quarter be summary found presentation. of of

pleased objectives, that consistently our strategic to quarter no history delivering long-standing is of and a have different. share We this on we're

disciplined this, past the or XX tell impact quarter the AEP an in of $X.XX ranked as share, you Turning our unfavorable XXXX full per the X% financial share one our high-level first I to quarter operating approach rate enables with of XXXX per and thoughtful of range long-term us per of share of to midpoint business our $X.XX delivered per -- share and mid mildest million. of managing per growth that $X.XX earnings Despite $X.XX Weather $XXX year quarter a guidance overview first $X.XX of share, rate can years earnings results. in resulting results. to to a operating to this -- growth X%. and reaffirm range

AEP's our the we to our and commitments confident continue built-in of financial that performance. financial flexibility in have strong business deliver successfully ensure We're track-record on in we

to pleased our We're efforts minimal experienced the on also increase primarily our report of to successful due suppliers diversify supply investment capital robust our that AEP plan. to impacts to-date, financial mix impact and our has order quantities operational and minimize chain to

performance first XX% also I'll to our continue Ann we economic share and as She'll drivers the outlook, support our expansion. debt some development through our to range. targeted our to service walk territory perspective load and to FFO XX% on quarter drivers review positive drive

this by XX.X% this am at quarter, materially FFO metric is our While I will debt improve year-end. to confident

stakeholders. a deliver on you and our to initiatives our transactions, business significant last of our disciplined priorities. By benefits strategic of execution mentioned call, continue simplifying I to and is actively profile As and one derisking portfolio our top demonstrating we a commitment to quarter's managing to clear

with the initiatives transactions we April this of On operations flexible be our to change being and Actively Kentucky sale means challenge. and clear that team termination viable. ready A when may very weeks our Liberty. portfolio the was our certain our staying or strategy our it announced XX, few longer no also becomes ago, focus adapt managing of to faced

clear approach disciplined our uncertainty. We remains stakeholders took timing the of and was thankful to a continued pursuit continue expectations, evaluating what team's terminate regulatory to to that outcome ultimately the for pending Kentucky a our to for outcome best that terms benefit strategy develop to of mean a the employees our economics, react would priority and we the circumstances I'm in customers, the determined Ensuring operations. the our for and transaction sale sale ability of shifting top to and better work adapt and long-term investors. for

future the and met that ensuring the may Kentucky serve discipline and Power with and forward. customers our needed the commissioners so financial Kentucky discussed of We sale, Kentucky the stakeholders. we continue the manner a After health AEP to termination key moving of while collaboration in reliable Power's

term, region the communities In and we're the serve. -- support support on the near and we renewing our our of focus

earnings the stakeholders. earned utility, first which today needs ROE This in to all XX-month interest the period for XXXX Power's healthy is Kentucky reflect the materials call X.X%. resolved not see You'll the of quarter that a does of of in consideration ending financially be

issues due number next are and be unique is over the underperformance improvement of part that for course to a the in of The addressed year. will

the As local be Kentucky for development, ahead actions reliability, and system we controlling operations, about engaged on the and enhanced will think economic include we our customer opportunities cost. a refocus

approval financial will file with taking the effect include Other in using plan plant XXXX. performance be to rate securitization and balances January generating to in and base. legacy deferred We profile that beneficial with factors improving rightsizing June Kentucky an case new storm the base costs expected and commission in recover in process, a six-month rates

time, section Antitrust. Foreign approval and from United have waiting filings made States of Slide March, at and for IRG portfolio. renewables Investment approval FERC be focused we're on in the clearance already sale execution key found on regulatory were on the Euro All announced and this Acquisition of While Antitrust. in X. can and In in we under sale cleared we're transactions. other we summary the of renewable unregulated A the agreement February X,XXX-megawatt XXXX, Kentucky, Committee the pivot Holdings our successful We on from China XXX an Hart-Scott-Rodino with

will close regulated we second messaging, our transform to to delivery the the proceeds be directed infrastructure. prior as timing sale our near we our electric businesses of the and The of end approvals. XXXX the fleet enhance our with transaction regulatory quarter generation on the depending from expect Consistent

Furthering this week, venture we've XXX and commitment and XXX a regulatory Renewable the currently with and move simplify closing project AEP. fourth megawatts, company, adviser Mexico megawatt approvals. early solar construction PNM we solar development And megawatts. summarized projects operations hold Resources of and to selected X, to New this developing year with an partner eight subject or operating NMRD of This joint process. was derisk We as unregulated our the our agreed of known our Slide announcement the and sale owns NMRD. to within totaling portfolio, by Last operating target Mexico. anticipate quarter is on under our Development, to XXXX, six sell New in sale XX/XX forward XXX partnership the will end projects projects totaling timing in of portfolio making

news We with share also some you today. to have

you will Partners, distributed our and an move also on markets. which As for to We've hired business, in October XXXX, unregulated business. that that we the which will we'll updated PJM start sales and know, resources business is strategic Energy a fold the our forward, advisor the review AEP progress. we process in you announced keep the decided that retail operates of completed process into strategic OnSite primarily We've and review AEP

XXXX. sometime the launch expect update and We the first transaction to details completion currently of the the this with the along summer, half sale expect in you process but we'll this way, of

their core utility our on to opportunities enhance to focused We're to additive regulated value and for operations evaluate and recycle capital. performance all look potential activities continue

in-service or the to keep XXXX -- end our conclusion for assets, posted As AEP's of a in Pioneer PJM interest in of of projects joint updated non-core a consists Transmission, in on XXX strategic businesses. line miles expect effort, including some Energy. in and all of of of of or as AEP you but plant consists development businesses consequence or net with approximately pursue well three venture four our we $XXX SPP. businesses, Prairie Wind divesting our decided complete review as our we've the definitely progress, Transource this These transmission various a and substations on remaining million review by We'll total to of Transmission, and investment that under

that of let's and $X.X talk gears continue to transition switch a to share renewables AEP's our significant customers. megawatts regulated we storage and or billion solar and have on wind, XXX investment our for So, billion more Most approved our that we be -- filings five-year, energy at cost at for make Through before to about progress we APCo regulatory million. energy wind representing of to capital provides March predictable specific, and recently, of regulated in economy execution. to at our I'm total stable storage megawatts clean plan, pleased renewables a commissions. another $XXX owned, $X and billion XXX of made INM, owned $X.X owned,

we Company risk Public and for Service solar approving the the to positive on early the provided of company. week expense other billion. capacity settlement in PSO's of In wind step today, judge benefits filed large without focused settlement case the X. PSO's for a $X.X a to of need. assurance fuel-free power May parties which crucial this commission the any plan settlement other The took case, this settlement on a address with last undue Like, the April the April preliminary and has agenda along help issued its in XXXX that'll XXX.X-megawatt Oklahoma negotiation, without customer on capacity relates when opinion a in fuel case, portfolio case XX, forward

an in these at we in in development did hearing approval. the Louisiana we For look a coming that and the the but Texas which forward preliminary the another solar SWEPCO's recently matter law judge however, settlement, will settlement Texas, In meeting January administrative represents month. in the order parties project approve this not positive optimistic were which and reached resources. XX, billion in to orders We next And settlement recommended the and oversaw reconsidered evidentiary the April remain filed wind Arkansas that the XXX-megawatt Louisiana disappointed owned, quarter. Commission second for be on consideration issued renewables we that Louisiana, the in continued investment, $X.X project, Arkansas the

focused issued accordance on integrated and affordability. issued plans, and that important It's are We or at previous these reliability proposals customer by year plan to requests regulatory to related have In our utilities. for our regulated of preparing our plans, from with vertically consideration renewables each for note we next aligned resource goals taking supported preferences processes. the RFP make into filings over to commission integrated resources be additional while

our regular authorized some this ROE was update on gap. focused We're several provide initiatives. legislative our mentioned by work an Now, unfavorable as let Have on me to earlier. part reducing do the in on ROE and X.X% weather our driven at of I conditions that quarter, ongoing versus that

costs reached effort SWEPCO the am to report A the closed we recover And last gained January this provision close key month. as in rate have On and out to approval to I to the under action under the commission filed rates this and settlement XX happy case our -- gap, a case. XXXX that base into formula Louisiana this ability put was reset already plan. we that we

was in filed commission review in which case. formula in April, authorized base the Similarly, last rate by AEP that a Arkansas,

case rider we base currently in XXXX, in XX megawatts the X. actively pursuing is is team for Arkansas set the As of not the hearing of plant Oklahoma rates. advanced the And Turk on through May current recovery

So, the on we're front. making regulatory progress

with our We legislative -- rate in active process became session, new former its filed after March process. XXXX in front closely also on case XXXX period. triennial in stakeholders April the APCo biennial law law active last the the new The will continuing to APCo its two-year Virginia XXXX first to period. in subsequent after XXXX with rate for improve biennial The the biennial an require of in legislative through worked triennial file

we can place little rates So, your biennial litigate it's XXXX while going a to in XXXX, the in for triennial further we here. help rates get down put we XXXX you effective will in with line The for needs once and modeling work pending the like this.

our Pivoting minute. for cost recovery fuel to efforts a

in us fuel adapted quarter. for recovery $X.X Our deferred management top balance fuel our our of as our of at subject on balancing of cost fuel first recovered special a commission total was Texas, In priority recovery is surcharge the to approved across cost since with filed $XX We focus a all jurisdictions XXXX the review customer billion and million with our of impacts. February fuel October XXXX. being

making So, there. progress

XX% that prudence firm our and recommended produced was a reference commission's in by a the relies on review prior filing have West facilities. April taken staff Prudence factor the fuel consulting of costs. the of outside takes to to at would period. of disallowance the coal Virginia beyond in recommendation fuel report a practices by to available last during our with The an is aware that issue staff. XX ensure factors are We The hired winter capacity Friday, rooted report some power the peak AEP's control provide electricity plants certain

Virginia tool line February an very Those in to strategy, storm the West the that fuel million this recently mechanisms. balance costs. costs a historic filing cost fuel West The off provided legacy extreme swing impacts path XXXX. to costs XX, effective manner approval seeking passed pay and still fuel and recovery apply In $XXX to familiar these with area certain XX with over historical the made how securitization system We to mechanism the pressure Commission while new April on addressing those in the for deal customers are APCo with advocated that cost two to Virginia years legislation the filing of past coal also proposes issues. it the on minimizes as the securitization knowing to utilize deferred a in placed

out prudence the time in consultant's also or the days taken available new on most be and filing system. lays extreme to volatile the the cost would in APCo on actions fuel to operating recommendation, was Related coal over the time APCo ensure the this fuel environment

first the constructive billion receiving and is Our $X.XX plan collaborate After commission deferred deferred with securitize costs, a forward together to West of coal to to customer Virginia. to plan bonds combination legacy would approval, for balance, and in issue XXXX. fuel address deferred in the half path of commission concerns in plan balances the the storm fuel the amount be

I'm from momentum XXXX. wrapping pleased So, we're making, progress it the up, with our on capitalizing

business commitments our continue our to objectives. for experience reliable all communities, made values simplify safe, customers I seeing outlook. strategic future our possible approach deliver We also investments whose changes it make lead AEP team disciplined to We're investors. we have our and thoughtful earnings and to for rapid and to against our we're our on a taking and proudly support positive derisk execute a expertise and to growth and and delivering groundwork our clean, while lay affordable, we're Together, success the to in new for and energy adapting creating responding and industry. while

quarter will I first her through targets. to -- Ann that, ask provide With now walk us drivers and details financing performance some with our the on

you, to Ann. So

Ann Kelly

Thank morning, in. good It's thanks dialing you Darcy. all this to and be for Julie you, and with

share walk finish some targets, results, I'm credit us management. on financial on and our first going our load territory well some to guidance, and service liquidity, as updates metrics quarter through commentary with as portfolio and on our thoughts

the to the first quarter. in share were operating share per go for compared earnings $X.XX Let's $X.XX of Slide earnings XXXX. which per GAAP quarter the comparison X, to shows GAAP to for

of I'll cost, of the mention renewables earnings as the cost mark-to-market the There's GAAP addition Page that detailed operating on the our the to a well reconciliation Kentucky adjustment typical to in adjustment. as business on contracted of sale as For related transaction to we deck. XX expected an quarter, true-up loss the non-operating to a reflected expected presentation

the on The was our $XXX the Slide $X.XX in quarter walk XX. performance $X.XX one weather with years, share share quarter the Operating we've or mentioned. $XXX quarterly of million first driven Let's than to operating per at compared lower weather XXXX. more Julie quarter quarter past per by of the first seen unfavorable looking totaled for through performance When the by only earnings primarily mild million XXXX. in XX segment earnings weather, historical as or

X, with to Utilities depreciation. Operating and to in earnings Rockport load retail get and have $X.XX. and transmission associated more were for included Favorable primarily we'll Integrated a Unit and Vertically rate across down jurisdictions, changes share per load, revenue $X.XX sales performance, share, minute. drivers off-system multiple our I normalized that

O&M unfavorable and income higher by more taxes differences the related and largely to were weather, timing years items interests. than between These offset

year-over-year interest interest more as in the the variance expect to of rates We be year, pronounced have somewhat the half stabilized. first

O&M weather, These ongoing of of to We to efforts second favorable the spending. such timing also timing to in year year. help impact are addition as see reducing our offset open, the reflecting inflation O&M we discretionary spending holding prior travel to of and efficiency allow that the half in of near-term us compared expect taking unfavorable the each that to adjusting actions positions actions the offset the year, and are

the like second sales sales our Unit Also, I&M additional the off-system XXXX, are three lease, $X.XX the favorable about quarter the year-over-year talk $X.XXX expiration to depreciation. favorable would the off-system QX. Unit Rockport no depreciation since first of first quarters in Due to X due the purchase will of longer I lease, net of and in we an December, $X.XX impact of each the take are to was $X.XXX customers. with a favorable to the margins Including Rockport seeing plus last versus of shared see of retail depreciation of Rockport X year. approximately

and unfavorable, of consistent have Utilities if depreciable Vertically would been segment. $X.XX a with the higher our lease, you the exclude about which incremental in However, depreciation base impact Integrated is investment the

in spending drivers mix. interest earned due as Ohio, the unfavorable recovery the lower quarter, the favorable distribution O&M and The sales $X.XX segment from in revenue. retail unfavorable to last Favorable weather, items distribution were higher rider due in per cost normalized as this Offsetting in and to Texas customer well Transmission these to changes largely transmission higher investment and compared rate share, segment Utilities Distribution down distribution $X.XX included year. rider factor

per to contributed primarily by driven Holdco $X.XX growth. of segment favorable $X.XX AEP up The $X.XX share, last Transmission investment compared year,

$X.XX here Favorable Marketing up and site sales, higher per & a Generation include retail share, wholesale produced from depreciation, year. power taxes. last favorable development and $X.XX drivers margins,

interest. that due down And and unfavorable higher rates the well to our as on in remind reflected debt earnings finally, call. everyone like that balances. to Other I'd XXXX as rates by in we higher note this provided Corporate is interest largely an share, $X.XX driven per was that year-end I'll increase guidance both we our interest

to I year, actions full us prior unfavorable refinements While reaffirm guidance the give the mentioned, that just offset taking that confidence are the to quarter O&M was including weather, the to unfavorable range. year we our

provide Turning for when to performance I'll continued when evident performance a is We've service classes. XX, Slide retail weak on This an load the load see normalized it's be proving quarter. update load growth our our comparing to across economy to across most areas. outperform

So, in some we loads. residential are seeing weakness

industrial upside from are development Our classes ongoing commercial efforts. outlook. new the large potential and to full provides This from volumes benefiting economic some year customer our

Beginning relationship normalized a of rest we residential income in inflation is continue hand was expect and to the the over between growth. That and slide, stabilize residential the relationship of the down driver to usage, the upper corner squeezed customers be year. left of by key load as it see

X.X%, seeing service for decline While in our customer, customer were up by total a residential uses demonstrating are we counts territory. residential growth in

quarter the move food the commercial new many Normalized an data real exceptional as Though centers, of see the was large Ohio, and online to that Looking sales companies, attributable AEP operating the in XXXX. Outside merchandise slide, commercial and by and the were freely X.X% rest industrial in loads commercial and in through robust wake the coming growth data primarily the customer commercial additions. new individuals year. the across of especially driven were to substantially compared was gains projects in first this offset AEP to establishments continue in center more new accelerated estate, our drink of gains by pandemic. spread general sales stores, gains you'll to attributable Texas of our of

their left sales ago. to lower resume we a of corner, pace look healthy the X.X% from If increasing the we see hand growth, industrial year

in in AEP its sales, As most experienced industrial SWEPCO were Texas, gains also commercial sales. robust while double-digit with growth

are primary oil at pronounced sectors, among Looking gas and most extraction individual gains metal. and

load and it's on Probability that note quarter, that our customers' are You'll a our already still industrial material and of is finances. is despite having expectations a commercial impact for it's strong clear that for results extraordinarily the high, downturn our point a slowed muted. activity national growth XXXX to first

face area were labor economic we they the growth market weaker contraction While slow anticipate year standards. downturn. us in the into for continues Though in serve severe by rate of service confidence of which pace been baked These of the some projected severity achievable. ago, expect full load be further, XXXX don't a to resilient time the household Fed potential historical economic to still we year across growth have a much very our healthy will hikes, Furthermore, limit for are is assumptions finances a XXXX. allowing our that to our guidance than

believe economic Adding attract a there rate local allows projections more a base. while service to on is mitigating to to customer know to key working prioritize confidence We commitment to our with to the customers. area. disciplined upside the that that customer continue more impacts strategy our our us This our is that stemming activity investments than across downside, to will value our improve development providing is that to economic stakeholders load from experience

to for page, FFO decrease discuss to from look at move below to Taking the XX.X%, on reason year-end let's see liquidity stands left which the debt of the collateral The our us of associated of from of also natural sides during is funds and both XX you Return partially this upper target. So, primary reduces company's hits a to position. and a can it in capitalization Slide the our this gas sheet mark-to-market positions so in billion at metric power a and the long-term quadrant prices. decline quarter, decrease with our is $X.X increase operations, balance due equation. on debt the collateral the return X.X%

positions, will collateral metric XX%. in FFP our fluctuations be mark-to-market closer to Without to our debt the

close metric year, and the by the this over units year-end funds debt our improve predominantly expect of equity quarter. and sale we our the will reduce that renewable prior in conversion, after as XXXX announced operation We fourth improve from

remain We early of of through work XX% in as FFO this to debt our back XXXX plan regulatory to the deferred to into to we processes our fuel balances. XX% to recovery targeted trend and committed range range continue

You can our lower see the in liquidity summary of the slide. left quadrant

revolver Our in five-year bank quarter $X two-year outstanding billion just billion credit that remains due is increase extended debt position, mainly $X.X XXXX a $X to revolving support from which million decrease liquidity in strong at was last liquidity and our March issuances. to facilities commercial billion. The $XXX paper long-term from

XX.X%. On previously our we plan debt prior planned close units a increased conversion. sale and ratio back to XX% our closer GAAP year from announced by to basis, as the to equity trend capital X.X% transaction quarter this to our complete We

the pension that rate pension On liability Rates which X.X% XXX.X%. an the assets. caused front, fell qualified driving the the decrease, our the increase funding during discount than during on was decreased to quarter status quarter, greater in gain to the

Now turning Slide XX. to

the The has a our challenge form of in weather. significant first quarter unfavorable way brought

we the we and to remainder continue mitigate action through this As impact. to the business manage take progress of our year, will

operating business $X.XX. in position a remains of are guidance our and earnings core to Our range reaffirming we $X.XX strong

growth long-term be to committed rate X%. to X% our also of to We continue

our long-term operations in Kentucky to forward. maximize strategy previously are focus potential we order Julie regarding of full renewed going addressed the sale the new establishing transaction, Kentucky -- in As terminated a a

while and to the second divestiture of on and fundamentals, unregulated O&M capital will portfolio distribution ventures. year, to our quarter transmission, contracted of to our business the track on and retail initiatives regulated the have close billion outcome. the focus management on are continue and a review and help in plan, regulatory of positive us distributed executing announced our $XX We resources joint These simplify sale of this transmission derisk businesses, renewables we disciplined are some embarking the renewables

the We we ask really hear that what's open can I'm with your and mind any questions today. to Alan answer attention time have. to your you on that, so and going And call appreciate

Operator

from first question the David Morgan. Thank you. [Operator ahead. Go Instructions] come J.P. of with Our will Arcaro line

David Arcaro

Arcaro for much question. at Dave my so Stanley. thanks Hi, Morgan

with see, Why I transmission wondering business, those if could was on size starting needs what makes non-core? from that thinking if -- does the What equity you Let's thinking decision, on proceeds? you're in Could do plan come there. divestiture strategic that the the it a reduce little plan elaborate wondering here? what would maybe your to assets a of bit assets? And you to

Julie Sloat

thanks much. the Appreciate so Yeah, question.

necessarily we are continue talk to because with we review As transmission the a business, the of the about JVs as of I derisking, comfortable simplifying wouldn't profile strategic the transmission, otherwise. put or very risk JV

So that really and about focusing footprint. customers with said, to simplification ability is our being more deal this in our on

transco utility we American with to toward assets. utility But and love wrong business nothing So, these We the traditional have at assets. core them the we'd channel business Electric and really like Power. take dollars those

necessarily different, as we at and our Again, these and point, that footprint under it a of Wind? So on or and traditional not outside those -- outside Pioneer that pieces current is Prairie and we are this Transource have today. little why under of not review ETT -- are currently focus our footprint. is

as as utilizing this a review. see far Again, we'll that from should a is this have how any So, sale proceeds we strategic goes that would transaction occur.

We yet. decisions haven't made any

opening been you thing is get side. lot do when we've dollars bring to the transmission the about, traditional dollars you talking to the very in The expect We've same of What the end her But Clearly, is investment should maintain a the expectation on have utility operations. little in comments. metric to our bit do. balance regulated a door, us do talked got channeled should the about sheet. in a to that healthy of heal by Ann work to year.

if the out in confident sure timeline, responsibly we then And feel But issuances are always that to we in in can, we the equity regard. would make metrics So, periods. further look reduce going good. future

And strategic XXXX end be again, strategic more through I But if as anything being of expect apprised. review underway. review. we story keep story this to And XXXX you with us. of get a the for occur, were would We'll would the

So, question. thank for the you

Operator

next Tonet of go Morgan. Go to J.P. ahead. Jeremy We'll with line

Aidan Kelly

Kelly Hi. This actually Aidan morning. is on Jeremy. Good for

more New Also, shifting prospective insight the OnSite you Partners just talk now? great. and just could as Thanks. interested market here? So of resources would G&M the the buyer you're sales, on segment about be type to well retail would Any the Mexico any language you be on seeing distributed with of right buyer

Julie Sloat

bet. you Yeah,

So let different tacts a me of take at this. couple

the retail a one, had know, number business. So we've strategic underway for review as you

Partners addition Energy So about that XXXX sorry, the about component businesses I'd is -- $X.XX about Partners today. OnSite the Partners about $X.XX business shouldn't retail say, we're is new be guidance. $X.XX. should the is terms a that Those talking about, -- is Scooping of of in I'm OnSite in I comprise say, surprise.

me let about XXXX you you what know exactly those of is NMRD guidance. we're So talking so about. parameters, give $X.XX the

few there we're a got pennies playing with. that You

As as it are with buyers, far unregulated who this answer way. dealing multitude renewables buyers let We're me our likely from the contracted of already a business.

that terms that that NMRD, space with piece that that interested particular of very asset activity closely think of would I the might would be type in we're more business. of because base. we familiar contract with underway that with have parties So, the fit in

But the retail move then let's business. to

be of more won't into given narrows of that field the OnSite think for potentially And then meaning bit names, the got -- then hundreds any got set parties a the of of piece could more unique but I a business. And go distributed the interested in little that. business, or business, just and I the touch. you it narrower a just of Partners, on nature buyer particular part the that

the of and advisor with completely buyer that working [two a retail (ph) forward could you different way. transaction, our the there financial we're put situation both to sold is be combined bases. we're business the move distributed together you've and because platform tube] a when just are other where to with have start But the The pieces that separating got open the we about thing thinking where

move through Can't time what it what absolutely started really as we experiencing you will just with progress is of and but yet getting opine here. we just because we're keep we're our it, apprised on

stages, off then financial underway early the process So terms advisor well kicked and in getting but started. of the

Operator

David follow-up is Securities. Go line question not next a go with Shar in please. We'll Arcara have queue. Apparently, from Stanley. to with ahead, line Pourreza please. line moment, One the Morgan that the Guggenheim We of of

James Ward

Ward James taking for Shar. questions. Hi. you Thank This our on is for

case how case? forecast of First, investment And look towards could are to this rate June capital you expand context period? in on over jurisdiction overall your the a asks as in allocation how you as you see developing this Kentucky, the plans filing follow-up, thinking about in key the your you

Julie Sloat

appreciate I I you a really guys it, And busy still morning. have that. get

have So, don't different who names us. I we know typically cover

So, I just time I'm -- of Lots and attention your reporting. still companies of today. appreciative

absolutely what affordable front, do sensitivity the us state of We conversations serve to in have Kentucky to you And we're on them and arena. We for make we Kentucky the said, that on keeping the we're different being want the reliability. because the Kentucky need be tuned, lights is in inches. to going stay a that with the that area particular in are the sure So and in thoughtful we make particular. you'll all approach to sure keeping with expect successful commission, should the -- and very in to staff stakeholders, scratching to be in

you than with be will we lot a to to that partners other the granularity assure have jurisdiction. I today So, that working you of in share collaboratively with

up. continue company look we that to We of We need important the extremely to at healthy allocated piece particular cost us current that ROE need when situation So, the capital that low business. in to to particularly get utility you can have a so is. where be to

to a how we're ask our little and I'll bit to allocation capital from Kentucky. that digest then, talk Ann going about And

Ann Kelly

Right.

$XX our is other So, We billion plan plan, change. from capital reallocating areas not the capital segment. would be just the going forward same within to going

distribution, expect timeframe you stay for would all planned those same. generation, the to see numbers So, the will five-year transmission, the

are they reliability, focused to as just to on sure We jurisdictions mentioned. allocate Julie within will Kentucky that make

Operator

line Our with ahead. Durgesh question next Chopra come will Evercore. the from of Go

Durgesh Chopra

I'll me not, for have Thanks on you plant time. which with If are you and Hey, Is up that Hey. team. I can us? the Darcy. number you us rate that a morning, strategic there base with know transmission share giving handy just Good gave review. equipment for just property assets, follow-up number

Julie Sloat

have You base your that front to know rate I get you though. in much can me. question. what, a for number Durgesh, don't absolutely of so We thank you

But million, AEP in back with to $XXX the net So, plant out, we'll the you. circle is as you point that particular. attributable position is

Operator

to Andrew Weisel line Go of next with go the We'll ahead. Scotiabank.

Andrew Weisel

you. Thank morning. good Hi,

balance on question sheet. the First

besides degree what's credit of confidence and and if transactions what metrics Just the over FFO of targeted contracted renewables, guidance, to forward in time these your move period? clarify, none

Ann Kelly

Yeah.

about what on earlier I based was talked that So scenario.

modeled additional the applicable. in asset any besides contracted not transactions sales have We

early So, we improvement getting an and next year. metrics year-end would our targeted expect it by within

Operator

pardon the with go to of now ahead. line Crowdell -- go Anthony Please Anthony Mizuho. me, We'll

Anthony Crowdell

I gap reasonable is under What's we look five Slide gap. that anywhere you when I could assumption at XX guess I earning the basis greater the like quick to during two assume points. questions. that closed between OPCos and that are on XX what Great. underearning underearning timeframe? One a shows guess when of

then heard I -- have is may follow-up the not And correctly. and

I if segment correctly. didn't not or lease or know maybe it's it's Rockport maybe reporting? I that don't to Turk that think you've you. hear or bought plant of plant, G&M the now I in a Thank back move Does -- part the

Julie Sloat

bit. take much the so ROEs. the to up little Thanks Yes. one going question. on I'm going a truck for the to your I'm first back

be our Today, we to provided X.X%. you for the recall around X.X%. when the know, across may guidance, average ROE businesses was earnings You regulated we're XXXX going system as at

filings close gap that year. XXXX to we're the regulatory to that going of know, expectation. So help several the end you mentioned going toward here's we that us different And as that successes close in had and we've are my get expect I as I gap.

So close, a that confident we we'll little be feel but I expect under gap that that X.X%. will do

to not have rates. so guidance, get our earnings goalpost still the growth guidance earnings and we plan we within the Importantly, on changed

but that going to in gap that had not it's versus a take us XXXX worried about So either, X.X% I'm guidance. little the that longer we the close to

with that. leave I'll So, you

And within of utilities. to in them. as these just get there that's of because, level you our authorized be an basis on boy, one a close going while lead relative authorized, we're have But of time It's objective. XXs to a any love each little benefit know, earning things points take of get a surely single bit and versus jurisdictions. utility to the the That's having dependent us little would to to portfolio as that know, I a on not gap direct in you of company a

is stand So by the and know guidance sound.

segment, Vertically off-system And a too. I unit, unit. needs then So, there, Rockport captured that modeling you would with your sales, merchant Utilities that hopefully, in, will what, that on our the And as captured right? becomes actually it And Integrated believe okay? be that's help

Ann Kelly

And that's due to the ownership structure.

to owned want move didn't it it's Utilities. still we because Integrated by the So, Vertically

Operator

question follow-up a Guggenheim. have Shar Go of We with the ahead. line Pourreza from

James Ward

Or think distributed a always Ward Hi. recycle financing JVs at financing three we asset will here to of recycling Unrelated eventual source your transmission this for of to is would sales sales should assuming Thank resources needs? successful longer capital retail the and look And question, how into and just again. business, the prior James follow-up. you today, factor which there approach? you about both Thank you specifically, you. to no future for point highlighted the assets? funds wanted non-core the ask, your

Julie Sloat

Julie. Ann Yes, here I'll hand -- to this is a it minute. I in

look I and derisking of how fabric. be should our the Simplification it. at business Here's part

continually So, use put for of at to the and the highest value look we where each work. to best dollars is that going are we

make think we I the assets portfolio earnings. have the So sure have our is best that's that highest is in the can to job of we

authorized do around and better to to as have earning path here. that we better we at back go You the down do continue to go we'll answered that, ROE, at your question I just the

I do you mind. should that think So, in the back keep of

use would we that -- keep and JV that to that it. if we actions those business that to that of side continue signal a transmission you but see we unregulated absolutely move that may the makes you today will to able to the ones on ones review put want love to terms But talking transmission, are strategic today. We and think fit you about on sense we that the updated the are might us inside side derisk recycling traditional complete then, And It of forward profile the on there's outlined we of with the in consider the to house, be simplify. house, that we footprint. better clearly, those

any that? So more want if color Ann, know I to add talk about don't to or you any additional

Ann Kelly

we've And in Yeah, I flows, when Slide on that the we cash mean here. right, Julie. absolutely at are only the renewables look you're contracted XX sale modeled which

the while And proceeds So we will balance any the also additional be maintaining to equity forward, mentioned, could sales issuances we plan. able sheet. going the strengthen capital potentially reduce as selectively same

Operator

Go next with question line Karp from Our come of KeyBanc. Sophie ahead. will the

Sophie Karp

guess and thank right? constructive, and very Hi. you DCRF gap wanted to you whatnot. recovery TCOS ROE the there. my are So, about and taking I the utilities have in for you Texas mechanisms Good ask your I Texas, question. morning, and the regulatory

to to what specifically? guess, there gap addressed So needs I speak that? be, Could close to that you

Julie Sloat

appreciate still question. I Yeah, that

on today. working on it. So call thanks for being We're the

the So on story. let the me backdrop with start

good. we know, opportunity Texas. do the capital you deal channel AEP great improvement. to there's a always As continue mechanisms of think for think recovery there We very to We are

we've I'll moment. that one Texas. underearning here So we that growth of relative talk authorized with touch Texas, of comfortable about in the the a in that amount the But things in to have gotten with, of is

perfect. because earnings XX%, a is to take got on average, grow no at a regulatory trying I but can we haircut work recovery to little that. of bit But there on we're So

read Number that Those investment. DCRF is and TCOS things. bubble about that legislation the bi-annual filings specifically XX, shorten example, talk We to process there's that And working good relates there that you for capital we some earnings in have love so some do significant to ability the that. the recover commentary and Page if on under timeframe. through to We little

So maybe we that twice a do versus can year annually.

too, cap then help that that a And around be also will So to us. structures, there's might helpful some close legislation to little of that bit. gap kind

work case. to that more much to cost to trying way all recovery about to different mention thinking even other the base a about angles. period, continue talk excellent is, Not for that a continue throughout in you're mechanisms in those progressive are we're the thing So, Texas we're when use and to the

be on So, taking term, aspects legislative there we're demand to a hit to to trying and use But as authorized just as little the because the there. the trying near to bit gap. we've well as as in grow close ROE been can is the possible that earnings relative the comfortable efficient we of

we make love that just to of terms We're recovery. better was But it rationale. the in trying business. the So

Operator

ahead. of Julien We'll to line of Go America. Dumoulin-Smith the go Bank with now

Julien Dumoulin-Smith

Appreciate team. good you morning, Hey, time. Thank guys very the much.

Just following up the on a couple earlier. of remarks

to next you next as different all, Just the elaborate there can pursued of be be more outcomes? here avenues, bit which Obviously, matter but on the bit consideration a there, you month. here, maybe that the but potentially element also to there's you a to alluded commission procedural but elaborate here -- a to think Louisiana? the on may you on the perhaps little of steps little electing setback back can not putting or flex this you reconsider the a other some Can extent about

Julie Sloat

mind of Yes. top absolutely Julien, call today. for thank is for you being the on us. And that

that to you in filed the my a we're settlement mentioned approval, agreement I good stuff. As with staff know, constructive get testimony all conditional able Louisiana to and comments, opening and

of So, at information commissioners next actually, to the work that one be some recalled we want additional the decision And shared. once suggested meeting for reconsideration to is continue that angle. the could

top So, us. mind that we for have of

from should you SWEPCO. expect what here's So

continue goal that we the can You should this line. which pool across to seeking rehearing be in us to we expect see optimistic

specifically, jurisdictions to to too we'll able going then to So, in because stay we be of with them. get and forward, applications is right this and just weeds would yet move much that have the line game in front in with the it all hope don't have that in tuned absorb now. three stepping on literally positivity, And we want on that. I we're that

we On other the that have flexibility that But flexing is in have opportunity we projects in do that that in up we included think of there the filing. a jurisdictions? different with terms are that discrete basis,

able nothing the there. we're can't So again, so assured, different tool we tools use at having to tuned. optimistic need today. conversations, get But we're stay a different there share should and bag angles Louisiana to and But that the all route specific looking if we're rest in we're

Operator

go ahead. the of We'll with to Fremont Paul line next Ladenburg. Go

Paul Fremont

of Thank expect you. a the to the to debt. collect us to can basically assume we that In you give And I XX% guess sort order range, is to on need my first XX% hit those you on question of $X.X billion the FFO timing to the should in that sense targeted would deferrals? you fuel amounts? recover

Ann Kelly

Yes, I'll take that, Julie.

respect of So, model our West timeframes securitization year. first have that advantage taking upon we agreed the Virginia, half next quarter first have the with we of jurisdictions. the already we collect over within to the that or would And extended expect in to

Operator

follow-up from the of with ahead. a have question We Karp KeyBanc. Sophie line Go

Sophie Karp

in limit require like bring rate for differently, ROE might you rate giving of right, more there, for I Kentucky, that right? to you for of If time. the what spoke payers? you have sense asked like get this regulators increases the upper the do to follow-up But would Thank a the kind and need appetite Hi. of clearly, increase Kentucky rate you of can me And environment? like regulators that the a up, ask when kind on

Julie Sloat

Yeah.

answer you earnings the today, that's actually okay? this hadn't conversation, we today. announced today public information numbers don't have way. to that's So yet, I had me let new because we share that So, specific when with

conversation the -- a is to this go-back so truly we'll are company. that And utility the because be plan financially will sound having the that interested the commission I'm and And collaborate, again, have. in commissioners sound confident very

we'll working all so And that direction. in be same

you a bag, tool time longer too. the development on that, know, a because with That as it's the lead top-line to with things it. But we'll we're influence nature. successful in try tools really as takes economic and longer, far that as little of got obviously, little Now we know

be sensitive very stay tuned. of then, course, well. as So cost we'll And to

of got us for thing storm on tools are using will other is be So, sheet. top deferred tool in bag The the okay? balance is sitting securitization, the the we've that that mind new costs

to Big coal associated the an legacy of opportunity plants plant that's of net balance like of have on the sitting We Sandy. take million tune too, something to sheet, care $XXX with

to kind that least we So math also back the what the and -- things into And at or securitize make of I about rate talks that able strikes work. that base. at kind of to need mentioned rightsizing those then idea of are we'll how be

X.X%, seat We So, deal utility need get various of top Kentucky and make the a healthy. honestly, that commission will and with from the it state of that be need to in to my not seat, got from it in just the where work to a situation. that we're healthy the mind we've But it's sure and because we lights all for And us, keep to stakeholders affordable. to getting be. keep we on with we

we're So literally don't We today you a have for with data game. line. okay? a thank in in X.X%, point Sophie, to lot This is because stay jumping share back new tuned. But of color

Operator

Ladenburg. Fremont with question follow-up Paul from Go a have ahead. We

Paul Fremont

Thanks.

XX% as the that So, to to of the is that to to debt? -- will you'll West assumption part that in you're you assuming Virginia securitization -- getting get XX% FFO

Julie Sloat

give customer. be a thing, will a us, securitization it's Actually, more more helps Julie. good great for little is that this the importantly, flexibility, Paul, us and

that options our think, I fuel spread to was recovery What when -- to balance. you'll see filed recover filing. use April securitization on we one it. for under-recovered is so, two And we we sorry, our fuel is the we the for that ENEC that the other was XX, like proposed years, filed in three made the to I'm what and the February it over new And have filing balance is date

part in and Mountaineer there trying think and I customer in plants, securitize we legacy well. the to looked as because as as we that, essentially them swallow a backdrop with plant of and in an to we the also balances idea protect And to have and have motivation option, again, rates Amos is coal storm from some particular, watermelon so costs here is can't

And securitize, like that number we that's so when billion that I all $X.XX would mentioned to in. today,

collectively can make and all And so, need. West the able we the are give but sure that Virginia a to we're to we metrics of that utility have work protected, trying the balance still hit citizens that so that options sheet and to healthy customers we're we commission

need absolutely So, doable, It's it's just to we'll move doable. process. through the

Ann Kelly

year, FFO to due dynamics, a as And well did of one outflow fuel. thing just debt, think significant an just we to add as the collateral deferred have in of you on market to increase when QX conditions, about quarterly in last

that as as quarter our help that we to through FFO that will and get year, off, rolls So, debt this well. significantly

Operator

with Paul open We [Operator question Ladenburg. Fremont did have Instructions] a up. me, line Pardon from follow-up not that

Bill have Go We Appicelli with UBS. ahead.

Bill Appicelli

renewable for approval of have contracted Most and a answered. the of Hi, good But the timing just questions around morning. asked question my been sale. the

both You March approval you filing Foreign the those Committee on on filings gives I do at the in in to to you Investment? the I made And XX. approval you'll get guess get comfort what QX? on what's the demonstrate what guess and that FERC -- need

Julie Sloat

Yes.

had two requested XX-day as made far So approvals let it FERC this answer we'll a way. When the initially, and need as process. me at we get, other approval we FERC that filing the to

tied the that we material we given normal order the approval any competition and/or kind relates getting And it not on and roadblock of the United within approval, be XX would to business States the days. in unregulated, to FERC So, this customers from XX don't loss. clearance but anticipate of an days. under XX as would applicable to like stakeholders, significant is traditional get not Foreign May Investment any Committee only multiple

short commentary with at So keep that say end gives to second we're be where are up. if past relatively the done think we'll expect But which in that the order, apprised going point, that us this latest. confidence quarter get But comfortable to by smoothly. we're we have we'll you seems we the and anything this everything were and periods, pretty at we come to should of

leave I'll So, that, you immediately. suggest shifts, front anything be and in right at it that if of anyway, we'll

Operator

queue We have this further in at lines no time.

Darcy Reese

for joining Thank on call. you today's us

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

Operator

beginning Thank be you. at X, this replay Ladies XX, May will and May through at made Eastern Time available today, XXXX, XXXX, a.m. conference gentlemen, for XX:XX midnight.

XXX-XXX-XXXX, internationally, are During the AT&T by can XXX-XXX-XXXX, the you code area and internationally, code is XXXXXXX. service toll-free, the access Those XXX-XXX-XXXX, again dialing you and that time, toll-free, area access Playback dial code XXX-XXX-XXXX, Executive access code numbers XXXXXXX. may

That will conclude your for using conference your call and Thank participation, you Event for AT&T today. Teleconferencing. for

You disconnect. may now

American Electric Power (AEP) 4 May 232023 Q1 Earnings call transcript