Rate hikes, increased sales to help AEP profit

AEP says rate hikes, improving sales will help 2010 profit; plans to cut capital spending

• On 10:47 am EST, Monday November 2, 2009

COLUMBUS, Ohio (AP) -- American Electric Power, one of the nation's biggest power companies, says it expects to earn $2.80 to $3.20 per share next year, helped by rate increases and an expected improvement in electricity sales.

It also said Sunday that it will cut its capital expenditures budget in 2010 and that it plans to form a transmission company.

Analysts surveyed by Thomson Reuters expect AEP to make $3.06 per share in 2010.

Its shares rose 75 cents, or 2.5 percent, to $30.97 in morning trading Monday.

AEP, which has 5.2 million customers in 11 states, said its forecast for next year excludes one-time charges or gains.

After posting its third quarter results last week, AEP said it expects to make $2.90 to $3.05 per share this year.

AEP projected its capital expenditures for next year will decrease to $2 billion from an estimated $2.5 billion this year. Utilities across the country have been limiting capital expenditures because of the recession.

AEP said it will form the transmission company Transco to pursue new opportunities within its existing 11-state service area and that it will invest $118 million in the company's activities in 2010.

AEP has the nation's largest transmission system, a 39,000-mile network that includes more 765-kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined.

Buzz up!