Why AEP capital expenditure is rising now
A rapid upswing in Oklahoma energy demand drives timing and scale. Companies add load quickly, and grid planners must respond. Therefore, AEP capital expenditure grows aggressively to meet firm contracts and expected large-load arrivals. In addition, industrial electrification, AI compute, EV charging, and data centers keep stacking new megawatts onto regional systems.
Driven by peak demand growth in Oklahoma, Texas and a few other states, AEP plans a 33% jump in its capital expenditure plan, one totaling $72 billion.
A larger AEP capital expenditure 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.
Transmission projects and market regions
765-kV buildout underpins growth
Company leaders said at a recent conference call to discuss third quarter financial results, that the increase in capex was driven by 765-kV transmission projects in Texas and the PJM Interconnection region, reported Utility Dive.
Ultra-high-voltage 765-kV lines move large blocks of power with fewer losses. Thus, AEP capital expenditure targets backbone corridors that support ERCOT, PJM, and the Southwest Power Pool (SPP). Importantly, long-haul lines enable balancing between fast-growing load centers and diverse generation.
Peak load outlook and confirmed demand
From 37 GW to 65 GW—what it means
William Fehrman, AEP chairman, president and CEO said the company anticipates the peak load will hit 65 GW 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 expenditure prioritizes 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, reported Utility Dive.
Because Oklahoma sits in 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.
Why local customers should care
AEP is the parent company of Public Service Company of Oklahoma.
PSO customers benefit from resilient transmission, modern substations, and better interties as the state attracts manufacturing, data processing, and energy-intensive projects. Consequently, sustained AEP capital expenditure supports reliability, economic development, and long-term cost control through efficient, right-sized infrastructure.