AEP Expands Capital Plan to $100B as AI Loads Hit 84 GW
Utility giant adds $22B in capex to build gas and transmission for tech
American Electric Power (AEP) has raised its five-year capital expenditure plan to $100 billion, marking a 30 percent increase driven directly by surging electricity demand from artificial intelligence data centers. The utility giant reported that its contracted large-customer load jumped 22 percent in a single quarter to 84 gigawatts (GW), led by a massive 10.4 GW computing complex under development in Ohio.
Key details
AEP increased its capital expenditure budget through 2031 from $78 billion to $100 billion, adding $22 billion in new spending across power generation and transmission. The Columbus, Ohio-based utility plans to allocate $20 billion toward gas-fired generation, up from $13 billion previously, and $37 billion toward high-voltage transmission, up from $33 billion. In its third-quarter earnings disclosure, the company outlined the resource requirements:
- 84 GW in contracted load: Total contracted large customer demand surged 22 percent from 69 GW to 84 GW in the third quarter of 2026, outpacing the operating output of AEP's existing generation fleet.
- 10.4 GW Piketon campus: The primary catalyst for the load surge is SB Energy's planned 10.4 GW data center campus in Piketon, Ohio, which will be served by three dedicated 765-kilovolt (kV) transmission lines providing 3.2 GW each between 2028 and 2030.
- 9 GW of new gas generation: AEP utilities are planning to add roughly 9 GW of new gas-fired power generation through 2032 to deliver continuous baseload energy for data center customers.
- Retail electricity sales growth: Data center connections propelled an 11 percent increase in total retail electric sales during the third quarter, driving overall nine-month sales up 8.7 percent.
- Dedicated transmission financing: SoftBank and its development affiliates have agreed to directly fund the $5 billion Piketon transmission project, guaranteeing AEP an 11.35 percent base return on equity.
Why this matters
The scale of AEP's revision illustrates how artificial intelligence workloads are forcing regulated utilities to expand their balance sheets to accommodate unprecedented industrial power draws. With 84 GW of contracted commitments, AEP alone faces power demand from computing facilities that rivals the total generating capacity of major European nations. The heavy reliance on $20 billion in gas-fired generation highlights the tension between tech companies' climate pledges and their immediate need for around-the-clock baseload power.
Context
AEP operates across 11 states, serving approximately 5.6 million customers across Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia, and West Virginia. As tech companies accelerate hyperscale data center construction, utilities nationwide are confronting multi-year backlogs for high-voltage transformers and grid interconnection approvals. In response, AEP is evaluating dedicated generating subsidiaries, or "gencos," in states like Indiana and West Virginia to ring-fence large-load infrastructure assets from traditional utility rate structures.
Risks and open questions
The primary uncertainty centers on whether commercial ratepayer protections will withstand regulatory scrutiny. Although SB Energy has committed to funding the 765-kV lines in Ohio, the Piketon project still requires formal approvals from the PJM Interconnection, the Public Utilities Commission of Ohio, and the Federal Energy Regulatory Commission (FERC). If data center tenants downsize, delay, or cancel compute deployments after transmission corridors and gas turbines are constructed, utilities risk stranding billions in capital costs. Furthermore, building 9 GW of new fossil-fueled generation faces environmental scrutiny and long lead times for turbine delivery.
What happens next
AEP plans to break ground on the Piketon transmission project in early 2027 to meet the targeted in-service dates of late 2028, 2029, and 2030 for its three 765-kV circuits. State utility commissions and FERC will review AEP's proposed transmission and large-load tariff filings throughout 2027, while regional grid operators assess whether additional capacity additions are required to maintain bulk power reliability across the 11-state footprint.
Source: Utility Dive Published on AI Usage Global, author: AUG Bot
