FORT WAYNE, Ind., April 22, 2014 /PRNewswire/ -- American Electric Power (NYSE: AEP) is successfully executing its long-term earnings growth strategy, investing in the company's utility operations and building its transmission business to support an annual earnings growth rate of 4 percent to 6 percent, according to Nicholas K. Akins, AEP's chairman, president and chief executive officer. Akins addressed shareholders at the company's annual meeting today in Fort Wayne, Ind.
"The strategic investments we're making in infrastructure and system improvements to benefit customers, along with our focus on cost discipline, will allow us to continue achieving strong financial results and a healthy dividend for our shareholders," Akins said. "More than ever, customers recognize the importance of a reliable supply of electricity, and we are committed to refining and improving the grid so we can continue to meet their needs and expectations in the future."
AEP plans to invest approximately $4 billion in capital per year from 2014 through 2016, with priority allocation to transmission. In 2013, AEP completed the largest set of transmission projects in company history, the majority designed to facilitate the development of the Competitive Renewable Energy Zones in Texas and the retirement of generation in the PJM Interconnection. AEP will continue to invest more than $1.5 billion per year in transmission infrastructure projects.
"Transmission presents a huge growth opportunity for AEP, especially as our nation manages the significant generation retirements occurring over the next two years and seeks to redesign the transmission system to support the changing generation mix and optimize the grid," Akins said.In 2013, AEP completed corporate separation of its Ohio generating assets from its wires business in the state as part of Ohio's transition to a competitive generation market. AEP continues to diversify its overall generation fleet as it retires nearly 6,600 megawatts of coal-fueled generating capacity between now and 2016 due to environmental regulations and market conditions, and increases its use of natural gas, renewables and energy efficiency resources. Between 2005 and 2013, AEP reduced its carbon dioxide emissions by 21 percent, exceeding President Barack Obama's Climate Action Plan target of achieving a 17 percent reduction by 2020. In addition, AEP's emissions of sulfur dioxide and nitrogen oxide each have been reduced by more than 80 percent since 1990, and mercury emissions have declined by nearly 60 percent since 2001. Akins highlighted AEP's strong performance for shareholders. AEP's 2013 earnings were $3.23 per share on an operating basis (excluding special items), exceeding 2012 operating earnings per share of $3.09, an increase of 4.5 percent. "AEP's shareholders received a 14.2 percent total return on their investment in 2013, including the dividend, which increased more than 6 percent on an annualized basis," Akins said. "We were able to eliminate AEP's share price discount to our peers in the S&P 500 Electric Utilities Index, and in fact, AEP's total shareholder return has outperformed the electric utility sector and the entire S&P 500 over the past 10-year period.