Modernizing the Grid
Having a modern, reliable, resilient and secure grid is vital to our clean energy transformation. Investing in the grid enables AEP’s decarbonization strategy as we prepare to accommodate new, cleaner grid resources, grow load in our service territory, and open the door to future customer-driven growth opportunities. This is essential to serving evolving societal, economic and customer needs as well as meeting our net-zero carbon goals.
Our network of 260,000 miles of distribution and transmission lines presents the challenge of ongoing maintenance and operational needs. While our transmission and distribution systems are built to last, equipment naturally wears over time, which can increase the risk of failure, outages and efficiency loss. We continue to invest in maintenance and equipment upgrades to meet customers’ expectations for reliability and to provide them with an optimal experience.
From 2022 through 2026, AEP plans to invest $38 billion in capital with an emphasis on transmission, distribution and regulated renewable energy. Approximately $24.8 billion of capital, or 65%, will be allocated to transmission and distribution operations to construct a more efficient grid and deliver custom energy solutions to customers. Our flexible capital investment pipeline provides us with the ability to quickly redeploy transmission and distribution investments where needed while mitigating customer bill impacts.
Our transmission strategy focuses on leveraging technical innovation to deliver low-cost, high-value solutions as rapidly and efficiently as possible. From 2022 through 2026, AEP plans to invest $14.4 billion, or approximately 50% of transmission capital investment, to modernize the transmission grid and enhance reliability and resilience. Our five-year transmission capital investment portfolio will deliver significant customer benefits across AEP’s broad geographic footprint and four regional energy markets. Benefits include optimizing the grid’s performance, reducing congestion, enabling the deployment of new technology, improving reliability and resilience, lowering energy costs and directly connecting renewables and other generation to the grid. Investments in transmission also enable public policies and customer demand for clean energy, as well as economic development.
We are also leveraging data analytics and digital technology, such as Geographic Information System (GIS), to reduce system failures, increase safety, improve grid reliability and minimize risks. Approximately $2.7 billion of annual on-system capital investment is required to replace and enhance all transmission assets beyond life expectancy over the next 10 years. This is determined based on performance, condition and risk. AEP’s Asset Health Center (AHC) uses operational and predictive data as an indicator for proactive system maintenance and equipment replacement needs. We minimize risk by identifying safety issues in real time and by prioritizing urgent needs to maintain a robust grid.
Reliably delivering electricity to our customers’ homes and businesses requires investments in our distribution system. From 2022 through 2026, we are allocating $10.4 billion to improve the reliability of our distribution systems. Distribution investments will be focused on renewing and replacing assets; responding to customer requests such as new services or upgrades; implementing technology automation; performing storm restoration; installing smart meters; investing in fiber to provide broadband to rural communities; and investing in energy efficiency and supporting electric charging vehicle charging infrastructure. Learn more about our investments in broadband in the Broadband Accessibility section.