TULSA, Okla., April 24, 2012 /PRNewswire/ -- American Electric Power (NYSE: AEP) continues to make progress on initiatives designed to deliver long-term shareholder value while managing near-term regulatory challenges in Ohio and lethargic economic recovery in some sectors, according to Nicholas K. Akins, AEP's president and chief executive officer. Akins addressed shareholders at the company's annual meeting today in Tulsa, Okla.
"We're entering an exciting chapter in AEP's 106-year history as we begin to make significant investments to transform our generation fleet, transmission business and regulated utilities through the end of the decade," Akins said. "We've proven that we can execute very successfully within the regulated utility space, which generates a significant portion of our earnings and supports our dividend.
"At the same time, we are focused on successfully managing the move to a competitive generation model in Ohio and growing a retail energy company that will operate in several states and hedge the value of our competitive generation assets. We also will continue to leverage our transmission expertise by expanding our transmission investments both within and outside of our traditional footprint," Akins said.AEP will increase its capital investments to approximately $3.1 billion in 2012, from $2.7 billion in 2011. As part of those investments, AEP will complete construction of the John W. Turk Jr. Plant, a 600-megawatt, ultra-supercritical coal-fueled plant in Arkansas, in late 2012. The company completed its Dresden Plant, a 580-megawatt, combined-cycle natural gas plant in Ohio, in February. AEP will invest approximately $922 million in transmission projects in 2012, including $350 million within the company's traditional service area through AEP Transmission Co., and $116 million through the company's joint venture projects primarily in Texas and Kansas. AEP recently announced the formation of Transource Energy(SM) LLC, a new joint venture with Great Plains Energy, to invest in competitive transmission opportunities created by Order 1000, which was issued by the Federal Energy Regulatory Commission in 2011. To prepare for a competitive electricity environment in Ohio, AEP Retail Energy acquired BlueStar Energy in March. BlueStar, based in Chicago, provides electric supply for retail customers in Ohio, Illinois and other deregulated electricity markets. The company also provides energy solutions, including demand response and energy efficiency services, nationwide. AEP Retail Energy now has more than 100,000 customers. Akins highlighted the company's commitment to financial discipline to help manage the near-term financial impacts of the lingering economic recovery, low power prices and the transition to a fully competitive environment in Ohio. "Economic recovery continues, although at a slower pace than we had hoped. Industrial growth continues to be encouraging and is happening faster in the states that we serve than in the overall U.S. economy. That should eventually trickle down and fuel growth in the commercial and residential sectors. Industrial sales increased 4.1 percent in 2011 compared with 2010, and we've seen additional growth of 2.2 percent already in the first quarter of 2012. Sales to residential and commercial customers have been essentially flat since 2010," Akins said.