Having benefited from more normal winter weather in the first quarter of the year, especially in comparison to the same time last year, American Electric Power, parent to Indiana Michigan Power and the Cook Nuclear Plant, says they marked a strong first quarter financially, and they are seeing positive economic indicators in the regions they serve.
In reporting first quarter earnings today, AEP says retail sales increased for all customer segments and industrial sales also were higher for the top 10 industrial sectors. Coupled with unemployment rates at the lowest levels in years in the states where the utility operates, the company says first quarter earnings of $454-million represent $0.92 per share, while operating earnings were $473-million of $0.96 per share. The difference between the two figures was due to the mark-to-market impact of economic hedging activities undertaken by the utility. Those numbers compare to $592-million ($1.20 per share) and $474-million ($0.96 per share) respectively in the first quarter of 2017.
Nicholas Akins is Chairman, President & CEO at AEP. He says, “Our performance in the first quarter demonstrates that we can continue to deliver solid earnings results through our focus on our regulated businesses and investments that enhance service for customers. The ongoing benefits of those investments, combined with strong economic signals, support our confidence in achieving our 2018 operating earnings guidance range of $3.75 to $3.95 per share.”
Akins adds, “We resumed normal levels of operations and maintenance (O&M) expenditures this year after cutting expenses last year in response to very mild weather conditions. Our ability to adjust O&M spending allows us to manage the impact of weather and load on our performance.”
Akins says that the company’s investments to maintain a robust, reliable energy grid are continuing to support the earnings growth. He adds, “Additionally, we are making progress in our efforts to bring clean, affordable wind generation to customers in Arkansas, Louisiana, Oklahoma and Texas through the 2,000-megawatt Wind Catcher project. We recently reached settlement agreements that are awaiting commission approvals in Arkansas, Louisiana and Oklahoma and continue to move forward with discussions in Texas. Wind Catcher is a win for customers and the environment, lowering customer bills while producing clean, renewable energy.”
In the wake of federal tax law changes, Akins reports, “We’ve spent considerable time evaluating how federal tax reform can provide the most benefits for customers. The impact of federal tax reform is neutral for our regulated operating earnings performance, and benefits already are being passed through to customers in several states in the form of rate changes or other offsets. We are working closely with regulators to determine the best options for delivering the benefits of federal tax reform to all customers.”
American Electric Power management reaffirmed its 2018 operating earnings guidance range of $3.75 to $3.95 per share. They say that operating earnings could differ from GAAP earnings for matters such as impairments, divestitures or changes in accounting principles. The caution that they are not able to forecast if any of those items will occur or any amounts that may be reported for future periods, adding, “Therefore, AEP is not able to provide a corresponding GAAP equivalent for earnings guidance.”
