What We Learned in Columbus: Load Quality and Funding Levers

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What We Learned in Columbus: Load Quality and Funding Levers

e-affirmation on build; will also embed option to buy into rate base later

AEP now trades at a forward P/E premium;at a discount following initial PPA expiration. Indiana and Virginia are the credible first sites. Also

however, we believe investors are simplycontemplating a site in Ohio with $100Mn in Jobs OH funding to evaluate around Piketon, OH mega-site.

willing to price in upside capex rather thanScope expanding beyond 'just' $4Bn+ transmission.

ascribe a true premium valuation. It's not

The earned ROE tailwind is real but finite; pivot to higher cape to sustain elevated CAGR. Our just the historic re-rating of EPS CAGR

EPS CAGR remains at 9.3% thru 2030, of which ~1.5% of the EPS CAGR is the earned ROE climb to up from legacy 4-6% all the way to 9%

9.65% in our model, slightly above the 9.5% company target; the rest is rate base driven. Once ROE + today, but its parallel regulatory de-

plateaus around 2028, our modeled EPS growth steps down accordingly, with parent financing and risking that has been the most appreciated.

share issuances driving the drag below the ~11% rate base pace. We expect this to be revised higher We see regulatory outcomes as supporting

to sustain EPS CAGR at novel 9%+ level into new decade. not just the earned ROE improvements in

our model, but the improving perceptions.

Contracted generation is capped by the rating agencies, not by appetite. Generation and Previously more challenged jurisdictions are

Marketing is under 10% of EPS in our model and shrinks absent additions. Whether agencies treat a seeing datacenter prospects (and wider load

hyperscaler PPA as regulated-like cash flow or as merchant adjacent exposure determines how far the growth) both enable re-rating in earned