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AEPAmerican Electric Power

Utilities · Electric Utilities · Nasdaq
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The 10-K against last year's

447 changes: 109 added, 115 removed, 219 reworded, 4 quiet changes

10-K Feb 12, 2026 vs Feb 13, 2025
Risk FactorsRedline ↓
31.0%
of the text changed · 9,780 words now
31.1%
of the text changed · 42,614 words now
Legal ProceedingsRedline ↓
27.5%
of the text changed · 3,714 words now
Accounting PoliciesRedline ↓
4.9%
of the text changed · 8,751 words now

10-K 0000004904-26-000013 (2026-02-12) vs 10-K 0000004904-25-000027 (2025-02-13)

The redline

The paragraph that changed most in each section

Marked against last year's 10-K: cut words struck through, new words highlighted and underlined.

MD&A 325 words changed in this paragraph; it is 33% similar to last year's version.
In January 2024, July 2025, APCo filed a request with the KPSC Virginia SCC to finance, through the issuance of proposed 20-year securitization bonds, approximately $1.4 billion of Virginia jurisdictional undepreciated property balances and a major storm operation and maintenance regulatory asset deferral balance. This proposed securitization included: (a) $1.2 billion of undepreciated Virginia jurisdictional plant balances as of December 31, 2023 for the Amos and Mountaineer Plants and (b) $141 million of Virginia jurisdictional major storm other operation and maintenance expenses deferred during the 2024-2025 biennial period. In September 2025, Virginia SCC staff submitted testimony concluding that all costs proposed by APCo for securitization are eligible for securitization in accordance with Virginia law. While also concluding that APCo’s proposed securitization of the Amos and Mountaineer Plants over 20 years offers benefits to customers through rate relief, Virginia SCC staff took no position on APCo’s proposed securitization of major storm other operation and maintenance expenses due to the apparent lack of significant benefit or cost savings for customers. In October 2025, the Hearing Examiner recommended the Virginia SCC approve the requested $1.4 billion for securitization. In November 2025, the Virginia SCC issued a financing order approving KPCo’s request to securitize certain regulatory assets balances as securitization of the time securitization bonds are issued and concluding that costs requested for recovery through securitization were prudently incurred. The KPSC’s financing order includes certain additional requirements related to securitization bond structuring, marketing, placement and issuance that were not reflected in KPCo’s proposal. $1.4 billion of Virginia jurisdictional costs. In accordance with Kentucky Virginia statutory requirements and the financing order, the issuance of the securitized securitization bonds is subject to final review by the KPSC Virginia SCC after bond pricing. KPCo APCo expects to proceed with the securitized securitization bond issuance process and to complete the securitization process in the first half of 2025, 2026, subject to market conditions. As of December 31, 2024, regulatory asset balances expected to be recovered through securitization total $491 million and include: (a) $303 million of plant retirement costs, (b) $79 million of deferred storm costs related to 2020, 2021, 2022 and 2023 major storms, (c) $50 million of deferred purchased power expenses, (d) $57 million of under-recovered purchased power rider costs and (e) $2 million of deferred issuance-related expenses, including KPSC advisor expenses. If any of these costs are not recoverable, it could reduce future net income and cash flows and impact financial condition.

Source: Item 7, 10-K 0000004904-26-000013 vs Item 7, 10-K 0000004904-25-000027

Legal Proceedings 218 words changed in this paragraph; it is 69% similar to last year's version.
AEP sold the Gavin Power Station to Gavin Power LLC and Lighthouse Generation LLC in 2017. Pursuant to the PSA for that transaction, AEP maintained responsibility to complete closure of the 300 acre unlined fly ash reservoir (FAR) pond in accordance with the closure plan approved by the Ohio EPA and to indemnify the purchasers for that work. In July 2021, closure work was completed by AEP. In November 2022, the Federal EPA issued a final decision denying Gavin Power LLC’s requested extension to allow a CCR surface impoundment another pond at the Gavin Power Station Station, the CCR surface impoundment, to continue to receive CCR and non-CCR waste streams after April 11, 2021 until May 4, 2023 (the Gavin Denial). As part of the Gavin Denial, the Federal EPA made several assertions related to the CCR Rule (see “Environmental Issues - CCR Rule” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information), Rule, including an assertion that the closure of the 300 acre unlined fly ash reservoir (FAR) FAR is noncompliant with the CCR Rule in multiple respects. The Gavin Power Station was formerly owned and operated by AEP and was sold to Gavin Power LLC and Lightstone Generation LLC in 2017. Pursuant to the PSA, AEP maintained responsibility to complete closure of the FAR in accordance with the closure plan approved by the Ohio EPA which was completed in July 2021. The PSA contains indemnification provisions, pursuant to which the owners of the Gavin Power Station have notified AEP that they believe they are entitled to indemnification for any damages that may result from these claims, including any future enforcement or litigation resulting from any determinations of noncompliance by the Federal EPA with various aspects of the CCR Rule consistent with the Gavin Denial. The owners of the Gavin Power Station have also sought indemnification for landowner claims for property damage allegedly caused by modifications to the FAR. Management does not believe that the owners of the Gavin Power Station have any valid claim for indemnity or otherwise against AEP under the PSA. In January 2024, Gavin Power LLC also filed a complaint with the United States District Court for the Southern District of Ohio, alleging various violations of the Administrative Procedure Act and asserting that the Federal EPA, through its prior inaction, has waived and is estopped from raising certain objections raised in the Gavin Denial. Management The complaint does not assert any claims against AEP. In August 2025, the District Court dismissed the complaint at the Federal EPA’s request. Based on the information currently available, management does not believe a loss is unable to probable and cannot determine a range of potential losses losses, if any, that is reasonably possible of occurring.

Source: Item 3, via Note 6 – COMMITMENTS, GUARANTEES AND CONTINGENCIES, 10-K 0000004904-26-000013 vs Item 3, via Note 6 – COMMITMENTS, GUARANTEES AND CONTINGENCIES, 10-K 0000004904-25-000027

Risk Factors 189 words changed in this paragraph; it is 49% similar to last year's version.
AEP’s business plan and capital investment plans for the construction of new projects, including providing service to new data centers and other large load customers, involves a number involve execution risks that could adversely affect AEP’s financial performance and/or impair AEP’s ability to execute on these plans. These risks include delays, supply chain disruption and the unavailability of risks, including incomplete materials, cost overruns, inflation, the cost and availability of capital, labor disputes or inaccurate forecasting, planning and procurement, construction delays, non-performance by equipment shortages and other third-party suppliers factors that could cause the total cost and increases in equipment and labor costs. To timing of any project to exceed estimates. While AEP utilizes measures to limit the risks impact of these construction projects, AEP’s subsidiaries enter into interconnection and service agreements, equipment purchase orders and construction contracts and incur engineering and design service costs in advance of receiving necessary regulatory approvals, cost recovery and/or siting or environmental permits. If events, if any of these projects are canceled for any reason, including shifts in large customer needs, preferences or financial stability, shifts in demand for large customer products or services, changes in technology, failure to receive necessary regulatory approvals, cost recovery and/or siting or environmental permits, mitigation efforts might not be sufficient and it could result in significant unrecoverable costs or cancellation penalties under and the equipment purchase orders execution of AEP’s business and construction contracts could occur. capital investment plans would be negatively impacted. In addition, if any construction work or investments have been recorded as an asset, an impairment may need to be recorded in the event the a project is canceled. This would cause financial results to be diminished.

Source: Item 1A, 10-K 0000004904-26-000013 vs Item 1A, 10-K 0000004904-25-000027

Accounting Policies 91 words changed in this paragraph; it is 80% similar to last year's version.
For commercial activities, exchange-traded derivatives, namely futures contracts, are generally fair valued based on unadjusted quoted prices in active markets and are classified as Level 1. Level 2 inputs primarily consist of OTC broker quotes in moderately active or less active markets, as well as exchange-traded derivatives where there is insufficient market liquidity to warrant inclusion in Level 1. Management verifies price curves using these broker quotes and classifies these fair values within Level 2 when substantially all of the fair value can be corroborated. Management typically obtains multiple broker quotes, which are nonbinding in nature but are based on recent trades in the marketplace. When multiple broker quotes are obtained, the quoted bid and ask prices are averaged. In certain circumstances, a broker quote may be discarded if it is a clear outlier. Management uses a historical correlation analysis between the broker quoted location and the illiquid locations. If the points are highly correlated, these locations are included within Level 2 as well. Certain OTC and bilaterally executed derivative instruments are executed in less active markets with a lower availability of pricing information. Illiquid transactions, complex structured transactions, FTRs and counterparty credit risk may require nonmarket-based inputs. Some of these inputs may be internally developed or extrapolated and utilized to estimate fair value. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized as Level 3. The main driver of contracts being classified as Level 3 is the inability to substantiate energy price curves in the market. A portion of the Level 3 instruments have been economically hedged which limits potential earnings volatility.

Source: Item 8, Note 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, 10-K 0000004904-26-000013 vs Item 8, Note 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, 10-K 0000004904-25-000027

Every change, by type

Sentences and paragraphs added, removed or reworded

Sentences and paragraphs of AEP's Risk Factors and MD&A, 10-K 2026-02-12 against 10-K 2025-02-13. Each links to the text at sec.gov.

AddedRisk Factors
The business and capital investment plans of AEP depend, in part, on the continued growth and viability of data centers and large load customers interconnecting with the AEP System. (Applies to all Registrants)

Read it in 10-K 2026-02-12 at sec.gov ↗

AddedRisk Factors
AEP is experiencing current and projected load demands that exceed historical experience, creating a business need for new power generating resources and transmission facilities. Much of this demand is driven by interconnecting with and providing power to data centers and other large load customers to serve an increasingly digital economy and to support AI. The business and capital investment plans of AEP are focused on meeting these current and projected needs. If these increased demands for electricity do not occur as projected or are not sustained as projected, for any reason, it could affect AEP’s financial condition.

Read it in 10-K 2026-02-12 at sec.gov ↗

AddedRisk Factors
Meeting the significant increase in electricity demand from new data centers and other large‑load customers will require substantial investment in new generation and transmission facilities. These projects may require levels of capital that exceed historical utility financing needs, and the ability of the capital markets to supply sufficient funding for large‑scale infrastructure expansion is uncertain. AEP’s ability to undertake these capital‑intensive projects depends in part on continued access to debt and equity markets. If capital markets experience reduced liquidity, constrained capacity for utility issuances, or diminished investor appetite for long‑duration infrastructure investments, AEP may be unable to obtain the financing required to support these projects. Even if capital is available, it may only be obtainable at significantly higher cost due to market conditions or competition for capital among utilities and other sectors. Any inability to secure adequate financing could delay or prevent the construction of required facilities, impair AEP’s ability to serve its customers, and adversely affect future net income, cash flows and financial condition.

Read it in 10-K 2026-02-12 at sec.gov ↗

AddedRisk Factors
•Any legislation, regulatory action or litigation outcome that triggers a reversal of a regulatory asset or deferred cost or establishment of a regulatory liability.

Read it in 10-K 2026-02-12 at sec.gov ↗

AddedRisk Factors
Risks from cybersecurity and physical threats to energy infrastructure are increasing. Threat actors, including sophisticated nation-state actors and criminal groups, exploit potential vulnerabilities in the electric utility industry, grid infrastructure and other energy infrastructures. Attacks and disruptions, which could involve physical, cyber and hybrid targeting of physical and cyber assets, are increasingly sophisticated and dynamic. The increased implementation of, and reliance on, information technologies and networks to manage business operations, including the operation of technical systems, as well as AEP’s use of numerous vendors and suppliers, create additional points of vulnerability that could be, and in certain instances have been, exploited by malicious threat actors. Several U.S. government agencies have warned that the energy sector and its supply chains are subject to increasing risks of physical attacks, ransomware attacks and cybersecurity threats, and that the risks may escalate during periods of heightened geopolitical tensions. In addition, the rapid evolution and increased adoption of AI technologies may intensify AEP’s cybersecurity risks.

Read it in 10-K 2026-02-12 at sec.gov ↗

AddedRisk Factors
A security breach of AEP’s physical assets or information systems, or those of AEP’s competitors, vendors, business partners and interconnected entities (including RTOs) could materially impact AEP by, among other things, impairing the availability of electricity transmitted and distributed by AEP and/or the reliability of generation, transmission and distribution systems, damaging grid infrastructure, interrupting critical business functions, impairing the availability of vendor services and materials that AEP relies on to maintain its operations, or by leading to the theft or inappropriate release of certain types of information, including critical infrastructure information, system data and architecture, sensitive customer, vendor, or employee data, or other confidential data.

Read it in 10-K 2026-02-12 at sec.gov ↗

AddedRisk Factors
AEP has not identified any cybersecurity incidents that have materially affected or are reasonably likely to materially affect its business strategy, results of operation or financial condition.

Read it in 10-K 2026-02-12 at sec.gov ↗

Show the other 16
AddedRisk Factors
If a material physical or cybersecurity breach or disruption were to occur, AEP’s reputation could be negatively affected, customer confidence in AEP could be diminished and AEP could be subject to legal claims, regulatory exposure, loss of revenues, and increased costs, including infrastructure repairs or operations shutdown, all of which could materially affect AEP’s financial condition and materially damage its business reputation. Moreover, the amount and scope of insurance maintained against losses resulting from any such security breaches or disruptions may not be sufficient to cover losses or otherwise adequately compensate for any resulting business disruptions. The continued increase in federal and state regulatory requirements related to cybersecurity and evolving threat actor-capabilities could require changes to measures currently undertaken by AEP or to its business operations and could adversely affect its financial condition.

Read it in 10-K 2026-02-12 at sec.gov ↗

AddedRisk Factors
Changes in U.S. or foreign trade policies, including the imposition of tariffs and other protectionist trade measures, and other factors beyond AEP’s control may adversely impact future net income and cash flows and financial condition.

Read it in 10-K 2026-02-12 at sec.gov ↗

AddedRisk Factors
Executive actions have been taken and additional measures proposed that are intended to alter the U.S. approach to international trade policy, the terms of certain existing bilateral or multi‐lateral trade agreements and trading arrangements with foreign countries. Such changes to U.S. international trade policy, and any retaliatory trade measures that foreign governments may take in response, including the imposition of tariffs, sanctions, export or import controls, or other measures that restrict international trade, or the threat of such actions, could result in additional increases in the cost of certain goods, services and cost of capital and exacerbate supply chain issues. In addition, related geopolitical and domestic political developments, such as existing and potential trade wars, uncertainty regarding changes in trade policy, and other events beyond AEP’s control, have increased and may continue to increase levels of political and economic unpredictability globally and the volatility of global financial markets. As a result, prevailing economic conditions may reduce future net income and cash flows and negatively impact financial condition.

Read it in 10-K 2026-02-12 at sec.gov ↗

AddedRisk Factors
Difficulties in sustaining leadership continuity could negatively impact AEP’s business and financial condition. The ability to maintain strong leadership relies on effective succession planning, and gaps in preparing or transitioning individuals into critical roles may impact performance.

Read it in 10-K 2026-02-12 at sec.gov ↗

AddedMD&A
(c)Represents the impact of the remeasurement of Excess ADIT in Arkansas and Michigan as a result of the denial of SWEPCo's request regarding the Turk Plant by the APSC and the approved treatment of stand-alone NOLCs by the MPSC.

Read it in 10-K 2026-02-12 at sec.gov ↗

AddedMD&A
The electric utility industry is undergoing a historic transformation, fueled by rapid commercial customer class load growth, especially from data processing and other energy-intensive operations, as well as shifting regulator and customer expectations, evolving public policies, rising stakeholder demands, demographic changes, new competitive pressures, emerging technologies, necessary reliability investments and volatile commodity markets. AEP projects growth in the system peak demand by 2030 across its diversified service territory, with especially strong projected growth in Indiana, Ohio, Oklahoma and Texas. To meet this accelerating demand, AEP outlined a $72 billion, five year capital plan focused on strengthening transmission infrastructure, adding new generation resources to serve both existing customers and large forecasted load additions and continuing to enhance distribution system reliability. Throughout this investment cycle, AEP remains committed to focusing on customer affordability. AEP expects to utilize various levers to address affordability including incremental load growth, rate design, continued operation and maintenance expense efficiency and financing mechanisms such as securitizations.

Read it in 10-K 2026-02-12 at sec.gov ↗

AddedMD&A
AEP has advanced large-load tariff proposals and tariff modifications aimed at enabling the rapid interconnection of committed large load customers while protecting existing customers from increased costs. These proposals have been filed in eight of AEP’s jurisdictions, with four already approved by state commissions. AEP is actively engaging with regulators, policymakers, RTOs, customers and suppliers to advance system reliability, resiliency and affordability across its service territories during this period of rapid transformation.

Read it in 10-K 2026-02-12 at sec.gov ↗

AddedMD&A
Several AEP utility subsidiaries have made rate filings with state commissions to establish new tariffs for data centers and other large load customers. The new tariffs are designed to protect existing customers by strengthening and lengthening contract terms with large customers. These new protections include contract lengths of up to 20 years and take-or-pay contractual minimums which can require a customer to pay for as much as 90% of their contracted demand. In practice, these provisions reduce risks around the build out of large load infrastructure on existing customers, promoting stability and affordability. The table below provides a summary of the status of these new data center and large load tariffs.

Read it in 10-K 2026-02-12 at sec.gov ↗

AddedMD&A
Company Jurisdiction Large Load Tariff Status (a) Customer Eligibility APCo Virginia Large Power Service Pending New load of 150 MWs or more/100 MWs for individual site APCo West Virginia Large Capacity/Industrial Power Approved New load of 150 MWs or more/100 MWs for individual site I&M Indiana Industrial Power Approved New load of 150 MWs or more/70 MWs for individual site I&M Michigan Large Load Pending New load of 50 MWs or more KPCo Kentucky Industrial General Service Approved New commercial or industrial load of 150 MWs or more OPCo Ohio Data Center Approved New data center load of 25 MWs or more PSO Oklahoma Large Power and Light Pending New load of 75 MWs or more SWEPCo Texas Electric Service Large Load Pending New load of 75 MWs or more

Read it in 10-K 2026-02-12 at sec.gov ↗

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