AEP splits its transmission buildout between Jacobs and WSP

Overview

Updated 2 hours ago

American Electric Power signed 15 gigawatts of new customer load in a single quarter, and about nine in ten gigawatts of its contracted pipeline is tied to data centers. On October 29 it handed the wiring to two engineering firms: Jacobs for seven eastern states, WSP USA for four western ones.

The award converts a utility's construction plan into a five-year program run by outside managers. AEP plans to spend about $37 billion on transmission through 2031, roughly double its current transmission rate base, and whether those lines land on schedule decides when the data centers can switch on.

Why it matters

If AEP's wires arrive on schedule, 84 gigawatts of new load gets power; if they slip, those data centers wait.

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Key Indicators

$37B

Planned transmission investment, 2027-2031

Largest slice of AEP's expanded five-year capital plan.

$100B

Total five-year capital plan

Includes $36 billion for generation and about $22 billion for distribution.

84 GW

Contracted load expected by 2031

Up 15 gigawatts after third-quarter signings; 92% tied to data centers.

35 GW

Load backed by firm take-or-pay agreements

The rest of the 84-gigawatt pipeline is not yet on binding terms.

92%

Share of contracted load tied to data centers

Includes cryptocurrency customers, per AEP's investor presentation.

Voices

Curated perspectives — historical figures and your fellow readers.

People Involved

Bill Fehrman

Chief executive, American Electric Power

Leading AEP's expanded capital plan

Bob Pragada

Chair and chief executive, Jacobs

Running AEP's eastern transmission delivery

Organizations Involved

American Electric Power

Investor-owned electric utility

Client for the $37 billion transmission program

Columbus, Ohio-based utility serving 11 states and owning about 90% of the nation's 765-kilovolt transmission lines.

Jacobs

Engineering and program management firm

Eastern delivery partner across seven states

Dallas-based firm handling program management, design and permitting for AEP's eastern transmission portfolio.

WSP USA

Engineering and professional services firm

Western delivery partner across four states

Engineering firm assigned AEP's western transmission work in Texas, Oklahoma, Arkansas and Louisiana.

PJM Interconnection LLC

Regional transmission organization

Approval gate for the Piketon project

Grid operator whose approval is required before AEP's remaining Piketon transmission work can proceed.

SB Energy

Renewable energy and data center developer

Anchor customer for AEP's Piketon project

Developer behind a planned 10.4-gigawatt data center campus at the former Portsmouth gaseous diffusion site in Piketon, Ohio.

Timeline

4 events Latest: 2 days ago

Tap a bar to jump to that date

October 2026
AEP details how the $37 billion splits
Latest Disclosure

About $17 billion for grid-operator projects, $11 billion reliability, $9 billion customer-specific.
2 days ago
Jacobs and WSP named to regional delivery roles
Contract

Jacobs gets seven eastern states, WSP four western ones.
3 days ago
AEP raises capital plan to $100 billion
Corporate

Transmission takes $37 billion; contracted load forecast rises to 84 gigawatts.
4 days ago
Federal loan guarantee backs AEP line rebuilds
Finance

Energy Department finalizes $1.6 billion guarantee for rebuilding 5,000 miles of lines.
October 20th, 2026

Scenarios

First Piketon line enters service on schedule

Possible Resolves by Q2 2029

Discussed by: AEP management and its October 28 securities filing

AEP has told investors the first of three Piketon 765-kilovolt lines will be in service at the end of 2028, with the others following in 2029 and 2030. Construction is set to start in the first quarter of 2027 and AEP says it has secured substantially all rights-of-way. Hitting the date would show the outside delivery model works at scale.

Regulators push Piketon's first line past 2028

Possible Resolves by End of 2028

Discussed by: AEP's own filing language on outstanding approvals

AEP still needs sign-off from PJM, the Public Utilities Commission of Ohio and the Federal Energy Regulatory Commission, and the Ohio Power Siting Board must approve final routes for some segments. A single denial or a long route dispute would move the 2028 date. Multi-state, multi-agency approval is the recurring failure point in large transmission builds.

AEP adds Texas transmission projects to the capital plan

Likely Resolves by End of 2027

Discussed by: AEP's third-quarter earnings call

Management said most of its Texas plan currently reflects reliability work, with only part of the needed build-out included, citing the state's batch approval process and continuing transmission planning. If those processes advance, the company has said it expects additional capital opportunities in Texas. That would enlarge the WSP side of the split.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

1970s-1983

Washington Public Power Supply System defaults (1983)

A consortium of Washington state utilities launched five nuclear plants on forecasts of soaring electricity demand. Construction costs rose and demand growth slowed. The project collapsed with $2.25 billion of bonds in default, at the time the largest municipal-bond failure in U.S. history.

Then

Two plants were finished; three were abandoned after about $2 billion had been spent.

Now

The default shaped how regulators and lenders treat forecasts of future demand for decades.

Why this matters now

AEP's plan rests on 84 gigawatts of contracted load by 2031, and only 35 gigawatts are on firm take-or-pay terms. The gap between forecast and signed contract is the same variable that broke WPPSS.

1998-2002

The dot-com fiber glut (1998-2002)

Carriers raced to lay long-haul fiber on projections of internet traffic doubling every few months. When traffic growth slowed and several startups failed, large stretches of the new network went unused and prices for capacity collapsed.

Then

Global Crossing, 360networks and others filed for bankruptcy; lenders wrote down billions.

Now

The surplus fiber was eventually absorbed, but the builders who financed it ahead of demand did not recover.

Why this matters now

Data-center demand is the justification for AEP's $37 billion in wires. The risk is timing: capacity built for customers who arrive later than promised is capacity someone still has to pay for.

2005-2014

Texas Competitive Renewable Energy Zones (2005-2014)

Texas designated zones with the best wind resources and paid for high-voltage lines to reach them before the wind farms were built. The state approved a multi-billion-dollar transmission program and assigned costs to ratepayers across the grid.

Then

Wind generation in Texas grew sharply once the lines were energized.

Now

The model became a reference for building transmission ahead of generation, and for deciding who pays when the benefit is spread across a whole region.

Why this matters now

AEP's Piketon build is customer-funded, with SB Energy covering costs over 20 years after each line enters service. Lines whose benefits are diffuse still need someone to agree to pay.