Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 30, 2026 · Beat 5 of last 7 quarters
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AEP's continued expansion of contracted load (69 GW) and secured turbine capacity (13 GW) underscores the accelerating pace of AI-driven data center demand across its footprint. The company's ability to secure DOE loans and large load tariffs supports the massive transmission and generation build-out required to connect hyperscalers, reinforcing its role as a critical enabler of AI infrastructure. The raised guidance and strong regulatory outcomes signal confidence in sustained capital deployment, which will ripple through the supply chain.
AEP reported Q2 operating EPS of $1.36, down from $1.43 a year ago, due to the 2025 transmission minority interest sale and tax timing items, but year-to-date EPS of $3.01 was up from $2.98. The company contracted an additional 6 GW of load, bringing total contracted load to 69 GW, and secured 3 GW of additional gas turbines. Regulatory progress included an Ohio distribution settlement with a 9.84% ROE, a SWEPCO Texas rate case settlement, and a PSO settlement with an enhanced transmission cost rider. AEP also completed a $1.4B securitization in Virginia and received approval for a large load tariff there. The company raised full-year guidance and completed a $3B marketed equity offering, de-risking its financing plan.
Management raised 2026 operating EPS guidance by $0.10 to $6.25-$6.55, citing strong first-half performance and regulatory tailwinds. They reaffirmed 7%-9% annual operating earnings growth and >9% EPS CAGR through 2030, supported by the $78B five-year capital plan. The company expects to roll out a new 2027-2031 plan in Q3, which will incorporate incremental generation investments (including the additional 13 GW of turbines) and potentially the Piketon and Wyoming fuel cell projects. They see continued load growth, with 69 GW contracted through 2030 and a long runway of transmission build-out in Texas, and remain committed to investment-grade credit metrics (FFO/debt 14%-15%). The tone was confident, emphasizing execution, affordability, and a decade-long growth outlook.
“To be clear, our future is extremely bright as it pertains to growth, exceptional counterparties, and incredibly supportive strategic partnerships that will allow us to deliver for our customers and our shareholders.”
on Growth outlook
“The bottom line is that the demand fundamentals in Texas remain exceptionally strong, and the additional visibility we are gaining continues to reinforce the robust long-term growth projected there.”
on Texas load growth
“We are now well-positioned to focus on the robust growth we are seeing across our footprint. As we evaluate incremental investment opportunities, we will continue to assess a broad set of financing tools with a focus on shareholder value.”
on Financing strategy
Given the growth in West Virginia, are you considering a GenCo structure or alternative financing to serve hyperscalers faster?
We are closely analyzing the GenCo structure and find it intriguing. In West Virginia, we have strong alignment with stakeholders and have already announced a 1.2 GW project, with more opportunities to come. We are also leveraging bridging strategies, which we pioneered with Bloom Energy, to provide customers with immediate capacity.
Can you tie the Batch Zero load to the current capital plan and the likelihood of ERCOT adjusting the batch framework?
The $78B plan was based on 13 GW of Texas interconnections, but we now have 45 GW in Batch Zero. We don't assume a dollar-for-dollar increase, but it provides line of sight to a larger capital plan. ERCOT's preliminary review shows our 45 GW is roughly a quarter of the eligible 205 GW, and we're confident in the quality of our projects. Even if some shift to Batch One, it just extends the investment runway.
How are you thinking about non-utility avenues in PJM, such as acquiring existing generation or new nuclear in a GenCo structure?
We are open to acquiring generation for our regulated utilities and have done so in the past. The GenCo structure is under evaluation as it could provide advantages in serving large customers. For new nuclear, we remain disciplined, requiring strong capital protection, balance sheet safeguards, and regulatory support before committing.