American Electric Power

“AEP’s overall 2025 6 fossil fuel costs for the Vertically Integrated Utilities increased 0.5% on a dollar per MMBtu basis from 2024.”

Annual report 2025A · The company itself

“The cost of fuel and its transportation, the creditworthiness and performance of parties who supply and transport fuel and the cost of storing and disposing of used fuel, including coal ash and SNF. • The availability of fuel and necessary generation capacity and the performance of generation plants. • The ability to recover fuel and other energy costs through regulated or competitive electric rates. • The ability to build or acquire generation (including from renewable sources and battery storage), transmission lines and facilities (including the ability to obtain any necessary regulatory approvals and permits) to meet the demand for electricity at acceptable prices and terms, including favorable tax treatment, cost caps imposed by regulators and other operational commitments to regulatory commissions and customers for generation projects, to recover all related costs and to earn a reasonable return.”

Annual report 2025A · The company itself

“Natural Gas The Vertically Integrated Utilities consumed approximately 164 billion cubic feet of natural gas during 2025 for generating power, which represents an increase of 5.8% from 2024. While nominal year-over-year natural gas consumption increases were experienced across AEP’s operating companies, the main consumption increase driver was related to the Green Country Power Plant, which was acquired by PSO on June 30, 2025.”

Annual report 2025A · The company itself

“Historically, the state regulatory frameworks in the service area of the Vertically Integrated Utilities reflected specified fuel costs as part of bundled (or, more recently, unbundled) rates or incorporated fuel adjustment clauses in a utility’s rates and tariffs. Fuel adjustment clauses permit periodic adjustments to fuel cost recovery from customers and therefore provide protection against exposure to fuel cost changes.”

Annual report 2025A · The company itself

“Changes in the price of purchased power and commodities, the cost of procuring fuel, emission allowances for criteria pollutants and the costs of transport may increase AEP’s cost of purchasing and producing power, impacting financial performance. (Applies to all Registrants except AEP Texas, AEPTCo and OPCo) AEP is exposed to changes in the price and availability of purchased power and fuel (including the cost to procure coal and gas) and the price and availability to transport fuel. •AEP is exposed to changes in the price and availability of fuel, including coal, natural gas and uranium, as existing contracts for the supply of such fuel end or are not honored.”

Annual report 2025A · The company itself

“I&M Plant Name Units State Fuel Type Net Maximum Capacity (MWs) Year Plant or First Unit Commissioned Rockport (a) Cook 2 MI Steam - Nuclear 2,296 1975 Hydro (Various Plants) Various IN Hydro 7 1904-1913 Hydro (Various Plants) Various MI Hydro 13 1908-1923 Solar (Various Plants) NA IN Solar 31 2016-2021 Solar (Various Plants) NA MI Solar 5 2016 Total MWs 3,662 (a)I&M owns a 50% interest in the Rockport Plant units.”

Annual report 2025A · The company itself

“PSO Plant Name Units State Fuel Type Net Maximum Capacity (MWs) Year Plant or First Unit Commissioned Comanche Green Country Northeastern, Unit 1 Riverside, Units 3 and 4 Southwestern, Units 4 and 5 Weleetka Northeastern, Unit 3 (a) Northeastern, Unit 2 Riverside, Units 1 and 2 Southwestern, Units 1, 2 and 3 Tulsa North Central Wind Energy Facilities (b) NA OK Wind 675 2021-2022 Rock Falls NA OK Wind 155 2017 Flat Ridge IV NA KS Wind 135 2025 Flat Ridge V NA KS Wind 153 2025 Pixley NA KS Solar 189 2025 Total MWs 5,876 (a)Northeastern, Unit 3 operated on coal up through December 2025 and began to operate on natural gas beginning in January 2026.”

Annual report 2025A · The company itself

“Expenses and Other and Income Tax Expense changed between years as follows: •Purchased Electricity, Fuel and Other Consumables Used for Electric Generation expenses increased $184 million primarily due to an increase in recoverable fuel and purchased power costs and an increase in Rockport Plant, Unit 2, merchant generation fuel costs.”

Annual report 2025A · The company itself

“In regulated jurisdictions with an active FAC, fuel cost over-recoveries (the excess of fuel-related revenues over applicable fuel costs incurred) are generally deferred as current regulatory liabilities and under-recoveries (the excess of applicable fuel costs incurred over fuel-related revenues) are generally deferred as current regulatory assets. Fuel cost over-recovery and under-recovery balances are classified as noncurrent when there is an expectation that refunds or recoveries will extend beyond a one year period, based on a company’s filing with a commission or a commission directive. These deferrals are incorporated into the development of future fuel rates billed to or refunded to customers.”

Annual report 2025A · The company itself

“Energy Marketing and Risk Management Activities (Applies to all Registrants except AEPTCo) The Registrants engage in power, capacity, and to a lesser extent, natural gas marketing as major power producers and participants in electricity and natural gas markets. The Registrants also engage in power, capacity, coal, natural gas and, to a lesser extent, heating oil, gasoline and other commodity risk management activities focused on markets where the AEP System owns assets and on adjacent markets.”

Annual report 2025A · The company itself

“GENERATION & MARKETING GENERAL Generation & Marketing focuses primarily on a retail supply business and a wholesale energy trading and marketing business which includes executing transactions and negotiating contracts to maximize value and mitigate pricing and delivery risk in response to evolving customer needs and market conditions.”

Annual report 2025A · The company itself

“(Applies to all Registrants) AEP sells power from its generation facilities into the spot market and other competitive power markets on a contractual basis. AEP also enters into contracts to purchase and sell electricity, natural gas, emission allowances, renewable energy credits and coal as part of its power marketing and energy trading operations.”

Annual report 2025A · The company itself

“COMPETITION Generation & Marketing subsidiaries face competition for the sale of available power, capacity and ancillary services. The principal factors of impact are electricity and fuel prices, new market entrants, construction or retirement of generating assets by others and technological advances in power generation.”

Annual report 2025A · The company itself

“Total natural gas delivered to the plants (in billions of cubic feet) 164 155 146 Average delivered price per MMBtu of purchased natural gas $ 3.71 $ 3.05 $ 2.69 Nuclear I&M has made commitments to meet the current nuclear fuel requirements of the Cook Plant. I&M has made and will make purchases of uranium in various forms in the spot, short-term, mid-term and long-term markets.”

Annual report 2025A · The company itself

“AEP's regulated subsidiaries have approved recovery mechanisms in retail jurisdictions that recover the cost of prudently incurred fuel, purchased power and other expenses.”

Annual report 2025A · The company itself

“Expenses and Other and Income Tax Expense changed between years as follows: •Purchased Electricity, Fuel and Other Consumables Used for Electric Generation expenses increased $184 million primarily due to an increase in recoverable fuel and purchased power costs and an increase in Rockport Plant, Unit 2, merchant generation fuel costs.”

Annual report 2025A · The company itself

“Energy Marketing and Risk Management Activities (Applies to all Registrants except AEPTCo) The Registrants engage in power, capacity, and to a lesser extent, natural gas marketing as major power producers and participants in electricity and natural gas markets. The Registrants also engage in power, capacity, coal, natural gas and, to a lesser extent, heating oil, gasoline and other commodity risk management activities focused on markets where the AEP System owns assets and on adjacent markets.”

Annual report 2025A · The company itself

“The service areas of AEP’s public utility subsidiaries cover portions of the states of Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia. Transmission networks are interconnected with extensive distribution facilities in the territories served. The public utility subsidiaries of AEP have traditionally provided electric service, consisting of generation, transmission and distribution, on an integrated basis to their retail customers.”

Annual report 2025A · The company itself

“COMPETITION The Vertically Integrated Utilities primarily generate, transmit and distribute electricity to their retail customers in their service territories. These sales are made at rates approved by the state utility commissions of the states in which they operate, and in some instances, approved by the FERC, and are not subject to competition from other vertically integrated public utilities.”

Annual report 2025A · The company itself

“TRANSMISSION AND DISTRIBUTION UTILITIES GENERAL This segment consists of the transmission and distribution of electricity for sale to retail and wholesale customers through assets owned and operated by AEP Texas and OPCo. The Transmission and Distribution Utilities own and operate transmission and distribution lines and other facilities to deliver electric power.”

Annual report 2025A · The company itself

“(Applies to all Registrants) 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.”

Annual report 2025A · The company itself

“(Applies to all Registrants) AEP sells power from its generation facilities into the spot market and other competitive power markets on a contractual basis. AEP also enters into contracts to purchase and sell electricity, natural gas, emission allowances, renewable energy credits and coal as part of its power marketing and energy trading operations.”

Annual report 2025A · The company itself

“•Transmission Revenues increased $23 million primarily due to the following: •An $18 million increase due to continued transmission investment. •A $6 million increase due to the June 2025 FERC order related to the treatment of NOLCs in transmission formula rates. •Other Revenues increased $6 million primarily due to increased rent received from associated companies. Expenses and Other and Income Tax Expense changed between years as follows: •Purchased Electricity, Fuel and Other Consumables Used for Electric Generation expenses decreased $8 million primarily to the following: •An $18 million decrease due to the prior year amortization of Excess ADIT through the West Virginia ENEC. •A $17 million decrease due to the impact to the West Virginia ENEC as a result of the June 2025 FERC NOLC order.”

Annual report 2025A · The company itself

“The major components of the increase in Revenues were as follows: •Retail Revenues increased $264 million primarily due to the following: •A $148 million increase due to a revenue refund provision recorded in 2024 associated with the Turk Plant and SWEPCo’s 2012 Texas Base Rate Case. •A $106 million increase in rider revenues. •Transmission Revenues increased $50 million primarily due to the following: •A $35 million increase due to continued transmission investment.”

Annual report 2025A · The company itself

“The FERC also regulates the Registrants’ wholesale transmission operations and rates. Retail transmission rates are based upon the FERC OATT rate when retail rates are unbundled in connection with restructuring.”

Annual report 2025A · The company itself

“Retail and Wholesale Supply and Delivery of Electricity The Registrants recognize revenues from customers for retail and wholesale electricity sales and electricity transmission and distribution delivery services. The Registrants recognize such revenues on the statements of income as the performance obligations of delivering energy to customers are satisfied.”

Annual report 2025A · The company itself

“The FERC regulates wholesale power markets and wholesale power transactions. The Registrants’ wholesale power transactions are generally market-based.”

Annual report 2025A · The company itself

“(Applies to all Registrants) AEP’s business and capital investment plans for the construction of new projects, including providing service to new data centers and other large load customers, 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 materials, cost overruns, inflation, the cost and availability of capital, labor disputes or shortages and other factors that could cause the total cost and timing of any project to exceed estimates.”

Annual report 2025A · The company itself

“Failure to attract and retain an appropriately qualified workforce and management could harm results of operations. (Applies to all Registrants) Certain events, such as an aging workforce without appropriate replacements, mismatch of skillset or complement to future needs, or unavailability of contract resources may lead to operating challenges and increased costs.”

Annual report 2025A · The company itself

“Operating these facilities involves many risks, including: •Operator error and breakdown or failure of equipment or processes. •Operating limitations that may be imposed by environmental or other regulatory requirements. •Labor disputes. •Compliance with mandatory reliability standards, including mandatory cybersecurity standards. •Information technology failure, including failure of AI technology, that impairs AEP’s information technology infrastructure or disrupts normal business operations. •Information technology failure that affects AEP’s ability to access customer information or causes loss of confidential or proprietary data that materially and adversely affects AEP’s reputation or exposes AEP to legal claims.”

Annual report 2025A · The company itself

“As of December 31, 2025, the subsidiaries of AEP had a total of 17,581 employees.”

Annual report 2025A · The company itself

“These decreases were partially offset by: •A $27 million increase in purchased power prices and renewable energy credit revenue. •Other Operation and Maintenance expenses increased $95 million primarily due to the following: •A $42 million increase in transmission expenses primarily due to: •An $18 million increase in recoverable PJM expenses. •A $15 million increase due to the June 2025 FERC NOLC order. •A $27 million increase in distribution expenses primarily due to an increase in storm-related expenses, partially offset by a decrease in vegetation management costs. •A $21 million increase due to recoverable energy assistance program expenses for qualified Virginia customers. •A $13 million increase in employee-related expenses. •An $11 million increase due to an impairment of in-process internal use software development costs.”

Annual report 2025A · The company itself

“•Purchased Electricity from AEP Affiliates increased $61 million primarily due to an increase in purchased electricity from AEGCo. •Other Operation and Maintenance expenses increased $58 million primarily due to the following: •A $38 million increase in distribution expenses primarily due to an increase in vegetation management costs and other distribution-related expenses. •A $20 million increase in transmission expenses primarily due to a $25 million increase in recoverable PJM expenses, partially offset by a $6 million decrease due to the June 2025 FERC order related to the treatment of stand-alone NOLCs in transmission formula rates. •An $18 million increase in employee-related expenses. •A $14 million increase in nuclear expenses at Cook Plant.”

Annual report 2025A · The company itself

“HUMAN CAPITAL MANAGEMENT Attracting, developing and retaining high-performing employees with the skills and experience needed to serve customers efficiently and effectively is crucial to AEP’s growth and competitiveness and is central to the Company’s long-term strategy. AEP invests in employees and continues to build a high performance and inclusive culture that inspires leadership, encourages innovative thinking and welcomes everyone.”

Annual report 2025A · The company itself

“Among the factors that could cause actual results to differ materially from those in the forward-looking statements are: • Changes in economic conditions, electric market demand and demographic patterns in AEP service territories.”

Annual report 2025A · The company itself

“Interest Income (6) Interest Expense (12) Total Change in Expenses and Other (130) Income Tax Expense (11) Year Ended December 31, 2025 $ 457 The major components of the increase in Revenues were as follows: •Retail Revenues increased $140 million primarily due to the following: •A $57 million increase in base rate and rider revenues. •A $50 million increase in fuel revenues. •A $30 million increase in weather-related usage driven by a 32% increase in heating degree days, partially offset by a 23% decrease in cooling degree days. •A $6 million increase in weather-normalized revenues primarily in the residential and commercial classes. •Off-system Sales increased $7 million primarily due to capacity revenues recognized from the RPM auction for the 2025-2026 planning year.”

Annual report 2025A · The company itself

“Summary of Heating and Cooling Degree Days Years Ended December 31, 2025 2024 2023 (in degree days) Actual – Heating 3,713 2,859 2,917 Normal – Heating 3,642 3,721 3,734 Actual – Cooling 927 987 751 Normal – Cooling (61) Other Income 8 Non-Service Cost Components of Net Periodic Benefit Cost 2 Interest Expense (17) Total Change in Expenses and Other (340) Income Tax Expense (96) Year Ended December 31, 2025 $ 414 The major components of the increase in Revenues were as follows: •Retail Revenues increased $315 million primarily due to the following: •A $109 million increase in rider revenues. •A $100 million increase in weather-normalized revenues primarily in the commercial class. •An $89 million increase due to the implementation of new base rates in Indiana and Michigan.”

Annual report 2025A · The company itself

“•A $26 million increase in weather-related usage driven by a 34% increase in heating degree days. These increases were partially offset by: •A $14 million decrease in weather-normalized revenues primarily in the residential class. •Off-system Sales increased $56 million primarily due to increased sales of OVEC purchased power driven by higher market prices and volume. •Transmission Revenues increased $28 million primarily due to continued transmission investment. •Other Revenues decreased $18 million primarily due to lower third-party Legacy Generation Resource Rider revenue as a result of approved legislation in Ohio in May 2025 which ended the retail recovery of OVEC purchased power costs.”

Annual report 2025A · The company itself

“The retail energy supply business, AEP Energy, provides electricity and/or natural gas to residential, commercial and industrial customers in Illinois, Pennsylvania, Delaware, Maryland, New Jersey, Ohio and Washington, D.C.”

Annual report 2025A · The company itself

“AEP subsidiaries serve customer electricity needs from these facilities and from purchased power in the PJM and SPP markets based on demand and other economic conditions.”

Annual report 2025A · The company itself

“VERTICALLY INTEGRATED UTILITIES GENERAL The Vertically Integrated Utilities operations are engaged in the generation, transmission and distribution of electricity for sale to retail and wholesale customers through assets owned and operated by AEGCo, APCo, I&M, KGPCo, KPCo, PSO, SWEPCo and WPCo.”

Annual report 2025A · The company itself

“The state regulatory commissions regulate all of the retail distribution operations and rates of AEP’s retail public utility subsidiaries on a cost basis.”

Annual report 2025A · The company itself

“For generation in Ohio, customers who have not switched to a CRES provider for generation receive SSO from OPCo and pay market-based auction rates.”

Annual report 2025A · The company itself

“AEP Texas had significant customers which account for the following percentages of Total Revenues for the years ended December 31 and Accounts Receivable – Customers as of December 31: Significant Customers of AEP Texas: NRG Energy and Vistra Corp 2025 2024 2023 Percentage of Total Revenues 38 % 40 % 41 % Percentage of Accounts Receivable – Customers 33 % 37 % 34 % 185 AEPTCo had significant transactions with AEP Subsidiaries which on a combined basis account for the following percentages of Total Revenues for the years ended December 31 and Total Accounts Receivable as of December 31: Significant Customers of AEPTCo: AEP Subsidiaries 2025 2024 2023 Percentage of Total Revenues 81 % 80 % 79 % Percentage of Total Accounts Receivable The Registrant Subsidiaries monitor credit levels and the financial condition of their customers on a continuous basis to minimize credit risk.”

Annual report 2025A · The company itself

“In addition, the rapid evolution and increased adoption of AI technologies may intensify AEP’s cybersecurity risks.”

Annual report 2025A · The company itself

“Advancements in artificial intelligence and other emerging technologies may require significant changes to the size, skills, and composition of AEP’s workforce, and the inability to adapt to these evolving talent needs could exacerbate existing workforce challenges and adversely affect AEP’s operations and financial performance.”

Annual report 2025A · The company itself

“(Applies to all Registrants) 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.”

Annual report 2025A · The company itself

“Most of the transmission and distribution services are sold to retail customers of the Vertically Integrated Utilities in their service territories.”

Annual report 2025A · The company itself

“The state regulatory commissions regulate all of the retail distribution operations and rates of AEP’s retail public utility subsidiaries on a cost basis.”

Annual report 2025A · The company itself

“In the ERCOT region of Texas, AEP Texas customers are required to choose an REP for generation service and pay market-based rates.”

Annual report 2025A · The company itself

“(Applies to all Registrants) 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.”

Annual report 2025A · The company itself

“AEPTHCO JOINT VENTURE INITIATIVES AEPTHCo has established joint ventures with nonaffiliated electric utility companies for the purpose of developing, building and owning transmission assets that seek to improve reliability and market efficiency and provide transmission access to remote generation sources in North America (Transmission Joint Ventures).”

Annual report 2025A · The company itself

“(Applies to all Registrants) A significant portion of AEP’s earnings is derived from transmission investments and activities. FERC policy currently supports the expansion and updating of the transmission infrastructure within its jurisdiction.”

Annual report 2025A · The company itself

“VERTICALLY INTEGRATED UTILITIES GENERAL The Vertically Integrated Utilities operations are engaged in the generation, transmission and distribution of electricity for sale to retail and wholesale customers through assets owned and operated by AEGCo, APCo, I&M, KGPCo, KPCo, PSO, SWEPCo and WPCo.”

Annual report 2025A · The company itself

“RISK FACTORS GENERAL RISKS OF REGULATED OPERATIONS AEP may not be able to recover the costs of substantial planned investment in capital improvements and additions. (Applies to all Registrants) AEP’s business and capital investment plans call for extensive investment in capital improvements and additions, including the construction or acquisition of additional transmission and generation facilities, installation and interconnection with data centers, modernizing existing infrastructure, installation of environmental upgrades and retrofits as well as other initiatives.”

Annual report 2025A · The company itself

“The Transmission and Distribution Utilities hold franchises or other rights to provide electric service in various municipalities and regions in their service areas. In some cases, these franchises provide the utility with the exclusive right to provide electric service.”

Annual report 2025A · The company itself

“Transmission and distribution services are sold to their retail customers in their service territories.”

Annual report 2025A · The company itself

“Seasonality The consumption and delivery of electric power is generally seasonal which impacts the results of operations of AEP’s reportable segments. In many parts of the country, demand for power peaks during the hot summer months, with market prices also peaking at that time.”

Annual report 2025A · The company itself

“Changing demand for electricity, including large load contractual commitments. • The risks and uncertainties associated with wildfires, including damages caused by wildfires, the extent of each Registrant’s liability in connection with wildfires, investigations and outcomes associated with legal proceedings, demands or similar actions, inability to recover wildfire costs through insurance or through rates and the impact on financial condition and the reputation of each Registrant. • The impact of extreme weather conditions, natural disasters and catastrophic events such as storms, hurricanes, wildfires and drought conditions that pose significant risks including potential litigation and the inability to recover significant damages and restoration costs incurred. • Limitations or restrictions on the amounts and types of insurance available to cover losses that might arise in connection with natural disasters, wildfires or operations.”

Annual report 2025A · The company itself

“(Applies to all Registrants) Climate change creates physical and financial risk. Physical risks from climate change may include an increase in sea level and changes in weather conditions, such as changes in precipitation and extreme weather events, such as fires.”

Annual report 2025A · The company itself

“Severe weather and weather-related events impact AEP’s service territories, primarily when thunderstorms, tornadoes, hurricanes, fires, floods and snow or ice storms occur. To the extent the frequency and intensity of extreme weather events and storms increase, AEP’s cost of providing service will increase, including the costs and the availability of procuring insurance related to such impacts, and these costs may not be recoverable.”

Annual report 2025A · The company itself

“Changes in wind patterns or in precipitation resulting in droughts, water shortages or floods could adversely affect operations, principally wind generation facilities for changes in wind patterns and the fossil fuel generating units for changes in precipitation. A change in wind patterns or a negative impact to water supplies due to long-term drought conditions or severe flooding could adversely impact AEP’s ability to provide electricity to customers, as well as increase the price they pay for energy.”

Annual report 2025A · The company itself

“The occurrence of one or more wildfires could cause tremendous loss, impact the market value and credit ratings of Registrants’ securities and have a material adverse effect on Registrants’ financial condition. (Applies to all Registrants) More frequent and severe drought conditions, extreme swings in amount and timing of precipitation, changes in vegetation, unseasonably warm temperatures, very low humidity, stronger winds and other factors have increased the duration of the wildfire season and the potential impact of an event.”

Annual report 2025A · The company itself

“Interest Income (6) Interest Expense (12) Total Change in Expenses and Other (130) Income Tax Expense (11) Year Ended December 31, 2025 $ 457 The major components of the increase in Revenues were as follows: •Retail Revenues increased $140 million primarily due to the following: •A $57 million increase in base rate and rider revenues. •A $50 million increase in fuel revenues. •A $30 million increase in weather-related usage driven by a 32% increase in heating degree days, partially offset by a 23% decrease in cooling degree days. •A $6 million increase in weather-normalized revenues primarily in the residential and commercial classes. •Off-system Sales increased $7 million primarily due to capacity revenues recognized from the RPM auction for the 2025-2026 planning year.”

Annual report 2025A · The company itself

“Summary of Heating and Cooling Degree Days Years Ended December 31, 2025 2024 2023 (in degree days) Actual – Heating 3,713 2,859 2,917 Normal – Heating 3,642 3,721 3,734 Actual – Cooling 927 987 751 Normal – Cooling (61) Other Income 8 Non-Service Cost Components of Net Periodic Benefit Cost 2 Interest Expense (17) Total Change in Expenses and Other (340) Income Tax Expense (96) Year Ended December 31, 2025 $ 414 The major components of the increase in Revenues were as follows: •Retail Revenues increased $315 million primarily due to the following: •A $109 million increase in rider revenues. •A $100 million increase in weather-normalized revenues primarily in the commercial class. •An $89 million increase due to the implementation of new base rates in Indiana and Michigan.”

Annual report 2025A · The company itself

“•A $26 million increase in weather-related usage driven by a 34% increase in heating degree days. These increases were partially offset by: •A $14 million decrease in weather-normalized revenues primarily in the residential class. •Off-system Sales increased $56 million primarily due to increased sales of OVEC purchased power driven by higher market prices and volume. •Transmission Revenues increased $28 million primarily due to continued transmission investment. •Other Revenues decreased $18 million primarily due to lower third-party Legacy Generation Resource Rider revenue as a result of approved legislation in Ohio in May 2025 which ended the retail recovery of OVEC purchased power costs.”

Annual report 2025A · The company itself

“AEP’s overall 2025 6 fossil fuel costs for the Vertically Integrated Utilities increased 0.5% on a dollar per MMBtu basis from 2024.”

Annual report 2025A · The company itself

“The cost of fuel and its transportation, the creditworthiness and performance of parties who supply and transport fuel and the cost of storing and disposing of used fuel, including coal ash and SNF. • The availability of fuel and necessary generation capacity and the performance of generation plants. • The ability to recover fuel and other energy costs through regulated or competitive electric rates. • The ability to build or acquire generation (including from renewable sources and battery storage), transmission lines and facilities (including the ability to obtain any necessary regulatory approvals and permits) to meet the demand for electricity at acceptable prices and terms, including favorable tax treatment, cost caps imposed by regulators and other operational commitments to regulatory commissions and customers for generation projects, to recover all related costs and to earn a reasonable return.”

Annual report 2025A · The company itself

“Management has coal contracts in place with suppliers through 2031 for a portion of the Company’s projected coal requirements. As of December 31, 2025, through subsidiaries, the Vertically Integrated Utilities own, lease or control 3,009 railcars, 270 barges, 4 towboats and a coal handling terminal with approximately 18 million tons of annual capacity to move and store coal for use in AEP generating facilities.”

Annual report 2025A · The company itself

“Changes in the price of purchased power and commodities, the cost of procuring fuel, emission allowances for criteria pollutants and the costs of transport may increase AEP’s cost of purchasing and producing power, impacting financial performance. (Applies to all Registrants except AEP Texas, AEPTCo and OPCo) AEP is exposed to changes in the price and availability of purchased power and fuel (including the cost to procure coal and gas) and the price and availability to transport fuel. •AEP is exposed to changes in the price and availability of fuel, including coal, natural gas and uranium, as existing contracts for the supply of such fuel end or are not honored.”

Annual report 2025A · The company itself

“Mitchell (a) 2 WV Steam - Coal 780 1971 Big Sandy 1 KY (a)KPCo owns a 50% interest in the Mitchell Plant units. WPCo owns the remaining 50%.”

Annual report 2025A · The company itself

“PSO Plant Name Units State Fuel Type Net Maximum Capacity (MWs) Year Plant or First Unit Commissioned Comanche Green Country Northeastern, Unit 1 Riverside, Units 3 and 4 Southwestern, Units 4 and 5 Weleetka Northeastern, Unit 3 (a) Northeastern, Unit 2 Riverside, Units 1 and 2 Southwestern, Units 1, 2 and 3 Tulsa North Central Wind Energy Facilities (b) NA OK Wind 675 2021-2022 Rock Falls NA OK Wind 155 2017 Flat Ridge IV NA KS Wind 135 2025 Flat Ridge V NA KS Wind 153 2025 Pixley NA KS Solar 189 2025 Total MWs 5,876 (a)Northeastern, Unit 3 operated on coal up through December 2025 and began to operate on natural gas beginning in January 2026.”

Annual report 2025A · The company itself

“Expenses and Other and Income Tax Expense changed between years as follows: •Purchased Electricity, Fuel and Other Consumables Used for Electric Generation expenses increased $184 million primarily due to an increase in recoverable fuel and purchased power costs and an increase in Rockport Plant, Unit 2, merchant generation fuel costs.”

Annual report 2025A · The company itself

“In regulated jurisdictions with an active FAC, fuel cost over-recoveries (the excess of fuel-related revenues over applicable fuel costs incurred) are generally deferred as current regulatory liabilities and under-recoveries (the excess of applicable fuel costs incurred over fuel-related revenues) are generally deferred as current regulatory assets. Fuel cost over-recovery and under-recovery balances are classified as noncurrent when there is an expectation that refunds or recoveries will extend beyond a one year period, based on a company’s filing with a commission or a commission directive. These deferrals are incorporated into the development of future fuel rates billed to or refunded to customers.”

Annual report 2025A · The company itself

“Among the factors that could cause actual results to differ materially from those in the forward-looking statements are: • Changes in economic conditions, electric market demand and demographic patterns in AEP service territories.”

Annual report 2025A · The company itself

“The disruption of AEP’s business operations due to impacts of economic or market conditions, costs of compliance with potential government regulations, electricity usage, supply chain issues, customers, service providers, vendors and suppliers caused by natural disasters or other events. • Construction and development risks associated with the completion of the 2026-2030 capital investment plan, including shortages or delays in labor, materials, equipment or parts. • Prolonged or recurring U.S. federal government shutdowns could adversely affect AEP’s operations, regulatory approvals, and financial performance and could cause volatility in the capital markets which may interrupt our access to capital. • New legislation, litigation or government regulation, including changes to tax laws and regulations, oversight of nuclear generation, evolving environmental standards, energy commodity trading and new or modified requirements related to emissions of sulfur, nitrogen, mercury, carbon, soot or PM and other substances that could impact the continued operation, cost recovery and/or profitability of generation plants and related assets.”

Annual report 2025A · The company itself

“AEP subsidiaries are exposed to risks through participation in the market and transmission structures in various regional power markets that are beyond their control. (Applies to all Registrants) Differences in the market and transmission structures in various regional power markets are likely to affect results.”

Annual report 2025A · The company itself

“AEP’s results of operations and cash flows may be negatively affected by a lack of growth or slower growth in the number of customers, a decline in customer demand or a recession. (Applies to all Registrants) Growth in customer accounts and growth of customer usage each directly influence demand for electricity and the need for additional power generation and delivery facilities. Customer growth and customer usage are affected by a number of factors outside the control of AEP, such as economic and demographic conditions, population changes, job and income growth, housing starts, new business formation and the overall level of economic activity.”

Annual report 2025A · The company itself

“•A $76 million increase in fuel revenues. •A $23 million increase in weather-related usage primarily due to a 30% increase in heating degree days. These increases were partially offset by: •An $86 million decrease due to regulatory provisions for refund. •Off-system Sales increased $137 million primarily due to economic hedging activity and Rockport Plant, Unit 2 merchant sales. •Transmission Revenues increased $9 million primarily due to the June 2025 FERC order related to the treatment of NOLCs in transmission formula rates.”

Annual report 2025A · The company itself

“These sales are made at rates approved by the state utility commissions of the states in which they operate, and in some instances, approved by the FERC.”

Annual report 2025A · The company itself

“AEP’s public utility subsidiaries currently provide service at rates approved by one or more regulatory commissions. If these regulatory commissions do not approve adjustments to the rates charged, affected AEP subsidiaries would not be able to recover the costs associated with their investments.”

Annual report 2025A · The company itself

“(Applies to all Registrants) The rates customers pay to AEP regulated utility businesses are subject to approval by the FERC and the respective state utility commissions of Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia.”

Annual report 2025A · The company itself

“Certain elements of AEP’s transmission formula rates have been challenged, which could result in lowered rates and/or refunds of amounts previously collected.”

Annual report 2025A · The company itself

“(Applies to all Registrants) AEP’s business and capital investment plans for the construction of new projects, including providing service to new data centers and other large load customers, 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 materials, cost overruns, inflation, the cost and availability of capital, labor disputes or shortages and other factors that could cause the total cost and timing of any project to exceed estimates.”

Annual report 2025A · The company itself

“The regulated utility businesses, and the energy industry as a whole have experienced a period of rising costs and investments and an upward trend in spending, especially with respect to infrastructure investments, which are likely to continue in the foreseeable future. The increase in spending could trigger increased regulatory scrutiny to authorizing cost recovery, especially in a rising cost environment, whether due to inflation, tariffs, high fuel prices or otherwise, and/or in periods of economic decline or hardship.”

Annual report 2025A · The company itself

“•Supply chain disruptions and inflation. •Fuel or water supply interruptions caused by transportation constraints, adverse weather such as drought, non-performance by suppliers and other factors. •Catastrophic events such as extreme weather, fires, earthquakes, explosions, hurricanes, tornadoes, winter storms, terrorism (including cyber-terrorism), floods or other similar occurrences. •Fuel costs and related requirements triggered by financial stress in the coal industry.”

Annual report 2025A · The company itself

“The United States economy has experienced an inflationary environment and supply chain disruptions have contributed to higher prices of components, materials, equipment and other needed commodities. A prolonged continuation or a further increase in the severity of supply chain and inflationary disruptions, including increased tariffs, could result in additional increases in the cost of certain goods, services and cost of capital and further extend lead times.”

Annual report 2025A · The company itself

“Physical attacks or hostile cyber intrusions could severely impair operations, lead to the disclosure of confidential information and damage AEP’s reputation. (Applies to all Registrants) Risks from cybersecurity and physical threats to energy infrastructure are increasing.”

Annual report 2025A · The company itself

“In addition, the rapid evolution and increased adoption of AI technologies may intensify AEP’s cybersecurity risks.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“(Applies to all Registrants) Performance is highly dependent on the successful operation of generation, transmission and/or distribution facilities. Operating these facilities involves many risks, including: •Operator error and breakdown or failure of equipment or processes. •Operating limitations that may be imposed by environmental or other regulatory requirements. •Labor disputes. •Compliance with mandatory reliability standards, including mandatory cybersecurity standards. •Information technology failure, including failure of AI technology, that impairs AEP’s information technology infrastructure or disrupts normal business operations. •Information technology failure that affects AEP’s ability to access customer information or causes loss of confidential or proprietary data that materially and adversely affects AEP’s reputation or exposes AEP to legal claims.”

Annual report 2025A · The company itself

“(Applies to all Registrants) AEP’s operations are dependent upon the proper functioning of its internal systems, including the information technology systems that support underlying business processes. Any significant failure or malfunction of such information technology systems may result in disruptions of operations.”

Annual report 2025A · The company itself

“(Applies to all Registrants) Performance is highly dependent on the successful operation of generation, transmission and/or distribution facilities. Operating these facilities involves many risks, including: •Operator error and breakdown or failure of equipment or processes. •Operating limitations that may be imposed by environmental or other regulatory requirements. •Labor disputes. •Compliance with mandatory reliability standards, including mandatory cybersecurity standards. •Information technology failure, including failure of AI technology, that impairs AEP’s information technology infrastructure or disrupts normal business operations. •Information technology failure that affects AEP’s ability to access customer information or causes loss of confidential or proprietary data that materially and adversely affects AEP’s reputation or exposes AEP to legal claims.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“•Supply chain disruptions and inflation. •Fuel or water supply interruptions caused by transportation constraints, adverse weather such as drought, non-performance by suppliers and other factors. •Catastrophic events such as extreme weather, fires, earthquakes, explosions, hurricanes, tornadoes, winter storms, terrorism (including cyber-terrorism), floods or other similar occurrences. •Fuel costs and related requirements triggered by financial stress in the coal industry.”

Annual report 2025A · The company itself

“Public utilities have traditionally financed capital investments until the new asset is placed in-service. Provided the asset was found to be a prudent investment, it was then added to rate base and entitled to a return through rate recovery.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“Volatility, increased interest rates and reduced liquidity in the financial markets could affect AEP’s ability to raise capital on reasonable terms to fund capital needs, including construction costs and refinancing maturing indebtedness.”

Annual report 2025A · The company itself

“Volatility in the securities markets, interest rates, and other factors could substantially increase defined benefit pension and other postretirement plan costs and the costs of nuclear decommissioning.”

Annual report 2025A · The company itself

“In addition, the public holds diverse and often conflicting views on the use of fossil fuels which can subject AEP to adverse publicity in connection with its use of fossil fuels. Criticism or adverse publicity of any nature could render legislatures and other governing bodies, public service commissions and other regulatory authorities, and government officials less likely to view AEP or the applicable regulated utility in a favorable light and could potentially negatively affect legislative or regulatory processes or outcomes, as well as lead to increased regulatory oversight, more stringent legislative or regulatory requirements, or other legislation or regulatory actions that adversely affect the regulated utility businesses.”

Annual report 2025A · The company itself

“Historically, the state regulatory frameworks in the service area of the Vertically Integrated Utilities reflected specified fuel costs as part of bundled (or, more recently, unbundled) rates or incorporated fuel adjustment clauses in a utility’s rates and tariffs. Fuel adjustment clauses permit periodic adjustments to fuel cost recovery from customers and therefore provide protection against exposure to fuel cost changes.”

Annual report 2025A · The company itself

“The current administration has implemented tariffs on certain imported goods and may impose additional tariffs. The constraints in the supply chain could restrict the availability and delay the construction, maintenance or repair of items that are needed to support normal operations or are required to execute on AEP’s corporate strategy for continued capital investment in utility equipment and impact AEP’s strategy to transition its generation fleet.”

Annual report 2025A · The company itself

“These increases were partially offset by: •A $14 million decrease in weather-normalized revenues primarily in the residential class. •Off-system Sales increased $56 million primarily due to increased sales of OVEC purchased power driven by higher market prices and volume. •Transmission Revenues increased $28 million primarily due to continued transmission investment. •Other Revenues decreased $18 million primarily due to lower third-party Legacy Generation Resource Rider revenue as a result of approved legislation in Ohio in May 2025 which ended the retail recovery of OVEC purchased power costs.”

Annual report 2025A · The company itself

“Other technologies, such as light emitting diodes (LEDs), increase the efficiency of electricity and, as a result, lower the demand for it. Changes in regulatory policies and advances in batteries or energy storage, wind turbines and photovoltaic solar cells are reducing costs of new technology to levels that are making them competitive with some central station electricity production and delivery.”

Annual report 2025A · The company itself

“The cost of additional regulatory requirements, such as regulation of carbon dioxide emissions, could impact the availability of goods and prices charged by AEP’s suppliers which would normally be borne by consumers through higher prices for energy and purchased goods.”

Annual report 2025A · The company itself

“A key part of AEP’s business is replacing and upgrading transmission facilities, assets and components of the existing AEP System as needed to maintain reliability.”

Annual report 2025A · The company itself

“SYSTEM TRANSMISSION LINES AND FACILITY SITING Laws in the states of Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Tennessee, Texas, Virginia and West Virginia require prior approval of sites of generating facilities and/or routes of high-voltage transmission lines. AEP has experienced delays and additional costs in constructing facilities as a result of proceedings conducted pursuant to such statutes and in proceedings in which AEP’s operating companies have sought to acquire rights-of-way through condemnation. These proceedings may result in additional delays and costs in future years.”

Annual report 2025A · The company itself

“Other technologies, such as light emitting diodes (LEDs), increase the efficiency of electricity and, as a result, lower the demand for it. Changes in regulatory policies and advances in batteries or energy storage, wind turbines and photovoltaic solar cells are reducing costs of new technology to levels that are making them competitive with some central station electricity production and delivery.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“•The inability to procure fuel at costs that are economical could cause AEP to retire generating capacity prior to the end of its useful life. •AEP is exposed to changes in the price and availability of emission allowances. •AEP is exposed to changes in the price and availability of diesel, the primary fuel used in transporting coal by barge.”

Annual report 2025A · The company itself

“Restricted access to capital or insurance markets and/or increased borrowing costs or insurance premiums could reduce future net income and cash flows and negatively 24 impact financial condition.”

Annual report 2025A · The company itself

“SYSTEM TRANSMISSION LINES AND FACILITY SITING Laws in the states of Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Tennessee, Texas, Virginia and West Virginia require prior approval of sites of generating facilities and/or routes of high-voltage transmission lines. AEP has experienced delays and additional costs in constructing facilities as a result of proceedings conducted pursuant to such statutes and in proceedings in which AEP’s operating companies have sought to acquire rights-of-way through condemnation. These proceedings may result in additional delays and costs in future years.”

Annual report 2025A · The company itself

“Other technologies, such as light emitting diodes (LEDs), increase the efficiency of electricity and, as a result, lower the demand for it. Changes in regulatory policies and advances in batteries or energy storage, wind turbines and photovoltaic solar cells are reducing costs of new technology to levels that are making them competitive with some central station electricity production and delivery.”

Annual report 2025A · The company itself

“The service areas of AEP’s public utility subsidiaries cover portions of the states of Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia.”

Annual report 2025A · The company itself

“Indiana I&M provides retail electric service in Indiana at fully bundled rates approved by the IURC with rates set on a forecasted cost-of-service basis. Indiana allows for timely recovery of fuel expenses through a fuel recovery surcharge mechanism and has approved additional recovery mechanisms associated with purchase power capacity, transmission and certain generation and environmental-related costs.”

Annual report 2025A · The company itself

“Michigan I&M provides retail electric service in Michigan at both unbundled standard service and open access distribution service rates approved by the MPSC, with rates set on a forecasted cost-of-service basis.”

Annual report 2025A · The company itself

“Oklahoma PSO provides retail electric service in Oklahoma at bundled rates approved by the OCC with rates set on a historical cost-of-service basis.”

Annual report 2025A · The company itself

“Tennessee KGPCo currently provides retail electric service in Tennessee at bundled rates approved by the TPUC with rates set on a historical cost-of-service basis.”

Annual report 2025A · The company itself

“Texas SWEPCo provides retail electric service in Texas at bundled rates approved by the PUCT with rates set on a historical cost-of-service basis.”

Annual report 2025A · The company itself

“Virginia APCo currently provides retail electric service in Virginia at unbundled generation and distribution rates approved by the Virginia SCC with rates set on a historical cost-of-service basis.”

Annual report 2025A · The company itself

“West Virginia APCo and WPCo provide retail electric service at bundled rates approved by the WVPSC with rates set on a combined APCo and WPCo historical cost-of-service basis.”

Annual report 2025A · The company itself

“The service areas of AEP’s public utility subsidiaries cover portions of the states of Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia.”

Annual report 2025A · The company itself

“Arkansas SWEPCo provides retail electric service in Arkansas at bundled rates approved by the APSC with rates set on a historical cost-of-service basis and formula rates. Arkansas provides for timely fuel and purchased power cost recovery through respective annual fuel and purchased power recovery mechanisms.”

Annual report 2025A · The company itself

“Kentucky KPCo provides retail electric service in Kentucky at bundled rates approved by the KPSC with rates currently set on a historical cost-of-service basis.”

Annual report 2025A · The company itself

“I&M is subject to a semi-annual Indiana jurisdictional earnings test.”

Annual report 2025A · The company itself

“Regional Transmission Organizations AEGCo, APCo, I&M, KGPCo, KPCo and WPCo are members of PJM, and PSO and SWEPCo are members of SPP (both FERC-approved RTOs).”

Annual report 2025A · The company itself

“The disruption of AEP’s business operations due to impacts of economic or market conditions, costs of compliance with potential government regulations, electricity usage, supply chain issues, customers, service providers, vendors and suppliers caused by natural disasters or other events. • Construction and development risks associated with the completion of the 2026-2030 capital investment plan, including shortages or delays in labor, materials, equipment or parts. • Prolonged or recurring U.S. federal government shutdowns could adversely affect AEP’s operations, regulatory approvals, and financial performance and could cause volatility in the capital markets which may interrupt our access to capital. • New legislation, litigation or government regulation, including changes to tax laws and regulations, oversight of nuclear generation, evolving environmental standards, energy commodity trading and new or modified requirements related to emissions of sulfur, nitrogen, mercury, carbon, soot or PM and other substances that could impact the continued operation, cost recovery and/or profitability of generation plants and related assets.”

Annual report 2025A · The company itself

“The service areas of AEP’s public utility subsidiaries cover portions of the states of Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia.”

Annual report 2025A · The company itself

“These risks include delays, supply chain disruption and the unavailability of materials, cost overruns, inflation, the cost and availability of capital, labor disputes or shortages and other factors that could cause the total cost and timing of any project to exceed estimates.”

Annual report 2025A · The company itself