American Electric Power on Thursday said it was considering adding $10 billion to its record $54 billion five-year capital plan as demand for data centers ramps up in the U.S. electric utility’s Midwest and southern service areas.
As the technology industry pours billions of dollars into expanding energy-hungry artificial intelligence and cloud computing data centers, U.S. power companies have revised load forecasts and capital investment plans upwards.
AEP said it has commitments for 20 gigawatts of new power load through 2029 and the utility expects total retail demand growth of up to 9% annually over the next three years.
The U.S. Energy Information Administration expects power consumption to reach record highs this year and next, driven by growing demand from data centers dedicated to AI and cryptocurrencies, and as homes and businesses use more electricity for heat and transportation.
AEP, which has about 5.6 million customers in 11 states, added nearly 450 megawatts in Ohio from Amazon Web Services and Meta data center demand in December alone. The utility expects to add similar amounts of load each month through the end of the year, with more than 4.7 gigawatts of data center processing contracted to enter service for 2025.
Most of that data center electricity consumption is in Ohio and Texas. In Indiana, where Amazon and Google recently began service in AEP territory, another roughly 1 gigawatt of data center demand is contracted to come online.
“They’re going to continue to ramp up progressively over the next several years,” AEP CEO Bill Fehrman said on a company earnings call.
“This growth certainly underscores our commitment to economic development and highlights the significant opportunities ahead, but clearly we’re going to make sure this doesn’t fall on the shoulders of our existing customers.”
AEP has been embroiled in a regulatory fight over developing power contracts specific to data centers and other very large customers.
AEP posted a rise in fourth-quarter profit on Thursday, as data centers boosted demand for power from commercial customers.
The Columbus, Ohio-based company earned $664.1 million, or $1.25 per share, in the three months ended December 31, compared with $336.2 million, or 64 cents per share, last year.
(Reporting by Laila Kearney in New York and Vallari Srivastava in Bengaluru; Editing by Maju Samuel and Nia Williams)