Research Update: American Electric Power Co. Inc. Outlook Revised To Negative On High Capital Spending And Limited Financial Cushion

American Electric Power Co. Inc. (AEP) is proposing to add nearly 16,600 megawatts of renewable generation by 2030 to replace about 8,000 megawatts of retiring fossil fuel-based generation and its expiring purchase power agreements over the next 10 years, which leads us to anticipate that the company's financial measures will remain at the lower end of the range for its financial risk profile category. In addition, management indicated that it will purchase the coal-fired Rockport Generating Station (RGS) unit 2 from its existing owners for about $115 million after the leases between the current owners and AEP's affiliates expire in late 2022. The company also launched a process to sell utility Kentucky Power Co. (KPCo) following a strategic review. We

...- American Electric Power Co. Inc. (AEP) is proposing to add nearly 16,600 megawatts of renewable generation by 2030 to replace about 8,000 megawatts of retiring fossil fuel-based generation and its expiring purchase power agreements over the next 10 years, which leads us to anticipate that the company's financial measures will remain at the lower end of the range for its financial risk profile category. - In addition, management indicated that it will purchase the coal-fired Rockport Generating Station (RGS) unit 2 from its existing owners for about $115 million after the leases between the current owners and AEP's affiliates expire in late 2022. The company also launched a process to sell utility Kentucky Power Co. (KPCo) following a strategic review. - We revised our outlook on parent AEP and its subsidiaries, except KPCo, to negative from stable and affirmed our 'A-' long-term issuer credit rating. - The negative outlook on AEP and its subsidiaries (except KPCo) incorporates our expectation...

Research Update