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AEP's fourth-quarter profits rise as demand for electricity increases due to data centers

American Electric Power, a U.S. utility, posted an increase in its fourth-quarter profits on Thursday as the demand for electricity from commercial customers was boosted by data centers.

Big Tech is investing billions of dollars in artificial intelligence and the infrastructure required to develop it. As a result, power utilities are experiencing a massive surge in demand.

Bill Fehrman, CEO, said: "In 2024 we saw significant growth in commercial loads, due largely to the economic development of Indiana, Ohio, and Texas."

The utility said that it expects retail loads to grow by up to 9% per year over the next three. It also stated that the company could handle more than 20 gigawatts in new growth.

AEP also said that it was evaluating a $10 billion potential investment in its five-year plan for capital expenditures, which is currently $54 billion.

Energy Information Administration (EIA) predicts that power consumption will reach new records this year and next due to the growing demand for data centers devoted to AI and cryptocurrency and because homes and businesses are using more electricity to heat and transport.

AEP has approximately 5.6 million customers across 11 states, and the largest transmission system of electric power in the United States.

The Columbus, Ohio, based company earned $664.11 million or $1.25 a share in the three-month period ended December 31 compared to $336.2 million or 64 cents a share last year. (Reporting and editing by Maju Sam in Bengaluru, Vallari Srivastava from Bengaluru)

(source: Reuters)