Dive Brief:
- Electric sales for American Electric Power's (AEP) utility subsidiaries fell 1.6% last year after discounting the effects of weather, company officials said Monday during a conference call to talk about the company's earnings.
- Looking ahead, AEP officials expect load growth to be essentially flat through 2016.
- In a warning about possible strains to the grid system, AEP plans to retire 7,150 MW of coal-fired generation in mid-2015, but 89% of that capacity has been operating in response to freezing weather.
Dive Insight:
AEP expects residential sales to drop by about 1% this year. “We think it's largely being impacted by a lot of the energy efficiency programs that we have across our service territory, with Ohio, Indiana and some other states having some pretty aggressive programs,” Brian Tierney, AEP CFO, said.
Not counting the loss of a major industrial customer, AEP expects weather-normalized sales to be flat this year. Flat sales are helping keep power prices relatively low, which benefits ratepayers. Prices will likely rise when coal-fired power plants get shut in the next couple years, but low natural gas prices should help keep a lid on price hikes. Grid operators like the PJM Interconnection and the Federal Energy Regulatory Commission are working to ensure that power markets are properly designed so new plants will be built when they are needed.
