A Positive Outlook
Our projected operating earnings range is $3.35 to $3.55 per share for 2014, $3.30 to $3.60 per share for 2015 and $3.45 to $3.85 per share for 2016. We expect to achieve these results through a combination of robust capital investments with timely recovery in our regulated utilities, and continued cost control. We will continue to keep O&M spending – which is not immediately recovered through rates – in check.
As we keep O&M spending under control, we expect to invest approximately between $3.8 billion and $4.1 billion per year in capital between 2014 through 2016. If there is unallocated capital in generation and distribution, we plan to redeploy it to transmission, which has local reliability improvement projects as well as new construction projects ready to go as soon as resources become available. In 2013, we put this strategy to work and redirected approximately $150 million, primarily from our generation business, to invest largely in transmission projects. Today, we are building transmission facilities in 13 states, and we expect that number to grow. We will also invest in new technologies such as a mobile alert system to improve communications with our customers and make improvements to strengthen the grid’s resiliency and reliability.
During the next three years, AEP’s revenue and earnings are expected to grow in all of our regulated segments, with the most significant growth coming from AEP Transmission. During the same period, earnings from the competitive generation segment are expected to decline, driven by lower capacity revenues.
We are optimistic about AEP’s future. Although the things that made AEP successful in the past will not necessarily lead to future success, we have a plan. We’re investing in our infrastructure to better serve our customers, engaging our employees, and learning to adapt to transformative changes in our industry as we build the utility of the future. Our success will pay financial rewards to our shareholders and reward AEP with improved customer satisfaction and an engaged work force. At AEP, we assume success and we manage, plan and act to realize it.