... Power Company, Inc.'s (AEP's) ownership of nine regulated electric utilities operating in 11 states and its growing investments in Federal Energy Regulatory Commission (FERC)-regulated transmission projects provide regulatory, geographic and cash flow diversity. Fitch Ratings forecasts almost 90% of AEP's consolidated EBITDA will come from its regulated businesses over the rating horizon, supporting a low business risk profile. Balanced Regulatory Construct: Fitch views the state regulatory constructs as balanced within AEP's service territories. ROEs are close to the industry average and include provisions to mitigate commodity and environmental regulation risks. Recent favorable outcomes to general rate cases (GRCs) and incremental rider mechanisms should result in modestly higher earned ROE in 2015¡2017. Large Capex Spending: Fitch's model includes management's forecast capex spending of about $4.4 billion in 2015, $3.8 billion in 2016...
