From staff reports Driven by peak demand growth in Oklahoma, Texas, and a few other states because of industrial electrification, artificial intelligence computing, electric vehicle charging, and data centers, American Electric Power plans a 33% surge in its capital expenditure plan, which will total $72 billion.
A larger capital expenditure budget by AEP, parent of Public Service Co. of Oklahoma, supports transmission upgrades, reliability projects, and new delivery paths for heavy industry. Moreover, this surge positions PSO and regional partners to handle multi-gigawatt customers that arrive in phases.
Company leaders said during a recent conference call to discuss third quarter financial results, that the increase in capex was driven by 765-kilovolt transmission projects in Texas and the PJM Interconnection region, Utility Dive reported.
Ultra-high-voltage 765-kV lines move large blocks of power with fewer losses.
Thus, AEP capital expenditures target backbone corridors that support the ERCOT power grid in Texas, PJM, and the Southwest Power Pool, of which Oklahoma is a member. Importantly, longhaul lines enable balancing between fast-growing load centers and diverse generation.
William Fehrman, AEP chairman, president and CEO, said the company anticipates the peak load will hit 65 gigawatts because of demand growing in Oklahoma, Texas, Indiana, and Ohio. It will be an increase from 37 GW and the growth estimate includes 28 GW customers with electric service agreements in place.
The jump from 37 GW to 65 GW signals extraordinary growth. Those electric service agreements represent contracted demand, not vague projections. Consequently, AEP capital expenditures prioritize shovel-ready corridors, substation expansions, and advanced protection systems that maintain reliability while loads scale quickly.
“About half of that 28 GW is in the Electric Reliability Council of Texas market, 40% in the PJM Interconnection, and 10% in the Southwest Power Pool, according to Fehrman, Utility Dive reported.
Because Oklahoma is in the SPP, that 10% matters locally and could expand with continued recruitment. Meanwhile, ERCOT and PJM carry most of today’s pipeline, yet interregional dynamics still affect Oklahoma pricing, congestion, and planning assumptions. Therefore, AEP capital expenditure choices today help shield customers from volatility tomorrow.