American Electric Power 10-K 2025-12-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON**, D.C. 20549**

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2025

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to_________

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

AEP Texas Inc., AEP Transmission Company, LLC, Appalachian Power Company, Indiana Michigan Power Company, Ohio Power Company, Public Service Company of Oklahoma and Southwestern Electric Power Company meet the conditions set forth in General Instruction I(1)(a) and (b) of Form 10-K and are therefore filing this Form 10-K with the reduced disclosure format specified in General Instruction I(2) to such Form 10-K.

(a)100% interest is held by AEP Transmission Holdco.

NA Not applicable.

Note on Market Value of Common Equity Held by Nonaffiliates

American Electric Power Company, Inc. owns all of the common stock of AEP Texas Inc., Appalachian Power Company, Indiana Michigan Power Company, Ohio Power Company, Public Service Company of Oklahoma and Southwestern Electric Power Company and, indirectly, all of the LLC membership interest in AEP Transmission Company, LLC (see Item 12 herein).

Documents Incorporated By Reference

This combined Form 10-K is separately filed by American Electric Power Company, Inc., AEP Texas Inc., AEP Transmission Company, LLC, Appalachian Power Company, Indiana Michigan Power Company, Ohio Power Company, Public Service Company of Oklahoma and Southwestern Electric Power Company. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf. Except for American Electric Power Company, Inc., each registrant makes no representation as to information relating to the other registrants.

You can access financial and other information at AEP’s website, including AEP’s Principles of Business Conduct, certain committee charters and Principles of Corporate Governance. The address is www.AEP.com. Investors can obtain copies of our SEC filings from this site free of charge, as well as from the SEC website at www.sec.gov.

TABLE OF CONTENTS

GLOSSARY OF TERMS

When the following terms and abbreviations appear in the text of this report, they have the meanings indicated below.

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FORWARD-LOOKING INFORMATION

This report made by the Registrants contains forward-looking statements, and for the Registrants other than Parent, this report contains forward looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Many forward-looking statements appear in “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations,” but there are others throughout this document which may be identified by words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “will,” “should,” “could,” “would,” “project,” “continue” and similar expressions, and include statements reflecting future results or guidance and statements of outlook. These matters are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Forward-looking statements in this document are presented as of the date of this document. Except to the extent required by applicable law, management undertakes no obligation to update or revise any forward-looking statement. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are:

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The forward-looking statements of the Registrants speak only as of the date of this report or as of the date they are made. The Registrants expressly disclaim any obligation to update any forward-looking information, except as required by law. For a more detailed discussion of these factors, see “Risk Factors” in Part I of this report. The disclosures in this section reflect AEP’s beliefs and opinions as to factors that could materially and adversely affect AEP in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.

The Registrants may use AEP’s website as a distribution channel for material company information. Financial and other important information regarding the Registrants is routinely posted on and accessible through AEP’s website at www.aep.com/investors/. In addition, you may automatically receive email alerts and other information about the Registrants when you enroll your email address by visiting the “Email Alerts” section at www.aep.com/investors/.

Company Website and Availability of SEC Filings

Our principal corporate website address is www.aep.com. Information on our website is not incorporated by reference herein and is not part of this Form 10-K. We make available free of charge through our website our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after such documents are electronically filed with, or furnished to, the SEC. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding AEP.

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PART I

GENERAL

Overview and Description of Major Subsidiaries

AEP was incorporated under the laws of the State of New York in 1906 and reorganized in 1925. It is a public utility holding company that directly owns all of the outstanding common stock of the public utility subsidiaries identified below.

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. Restructuring laws in Michigan, Ohio and the ERCOT area of Texas have caused AEP public utility subsidiaries in those states to unbundle previously integrated regulated rates for their retail customers.

The member companies of AEP have contractual, financial and other business relationships with the other member companies, such as participation in AEP savings and retirement plans and tax returns, sales of electricity and transportation and handling of fuel. The member companies of AEP also obtain certain accounting, administrative, information systems, engineering, financial, legal, maintenance and other services at cost from a common provider, AEPSC.

As of December 31, 2025, the subsidiaries of AEP had a total of 17,581 employees. As a holding company rather than an operating company, AEP has no employees.

Summary information related to AEP subsidiary operating companies as of December 31, 2025 is shown in the table below:

(a)KGPCo does not own any generating facilities and purchases electric power from APCo for distribution to its customers.

(b)OPCo purchases energy and capacity at auction to serve generation service customers who have not switched to a competitive generation supplier.

(c)AEPTCo is a holding company for the State Transcos, other than IMTCo and OHTCo, and Midwest Transmission Holdings. Five State Transcos are members of PJM and two State Transcos are members of SPP. Neither AEPTCo nor its subsidiaries have any employees. Instead, AEPSC and certain AEP utility subsidiaries provide services to these entities.

Service Company Subsidiary

AEPSC is a service company subsidiary that provides accounting, administrative, information systems, engineering, financial, legal, maintenance and other services at cost to AEP subsidiaries. The executive officers of AEP and certain of the executive officers of its public utility subsidiaries are employees of AEPSC. As of December 31, 2025, AEPSC had 6,994 employees.

Principal Industries Served

The following table illustrates the principal industries and wholesale electric markets served by AEP’s public utility subsidiaries.

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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. 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. This would cause financial results to be diminished.

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)

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.

The business and capital investment plans of AEP are subject to execution risks. (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. While AEP utilizes measures to limit the impact of these 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 and the execution of AEP’s business and 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 a project is canceled. This would cause financial results to be diminished.

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.

Regulated electric revenues and earnings are dependent on federal and state regulations that may limit AEP’s ability to recover costs and other amounts. (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. AEP cannot predict the ultimate outcomes of any actions by the FERC or the respective state commissions in establishing rates. The occurrence of any of the following could reduce future net income and cash flows and negatively impact financial condition:

• If regulated utility earnings exceed the return established by a relevant commission, that commission could reduce future rates;

• The overturning or reversal on appeal of previously authorized recovery; and

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

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. The inability to obtain cost recovery would adversely affect AEP’s business, financial position, results of operations and cash flows. See Note 4 - Rate Matters for additional information.

Regulated electric revenues and earnings are subject to prudency review. (Applies to all Registrants)

Regulators have initiated and may initiate additional proceedings to investigate the prudence of costs in the AEP regulated utility businesses. In these proceedings and in base rate proceedings regulators examine the reasonableness or prudence of operation and maintenance practices, the level of expenditures (including storm costs and costs associated with capital projects), the allowed rates of return and rate base, the proposed resource acquisitions and the previously incurred capital expenditures that the regulated utility businesses seek to keep or place in rates. Regulators may disallow costs found not to have been prudently incurred or found not to have been incurred in compliance with applicable tariffs, creating risk in the ultimate recovery of those costs. Disallowance of these costs would adversely affect AEP’s business, financial position, results of operations and cash flows.

Regulatory bodies may not allow recovery of costs incurred on a timely basis. (Applies to all Registrants)

Regulatory proceedings relating to rates and other matters typically involve multiple parties seeking to limit or reduce rates. Traditional base rate proceedings generally have long timelines, are primarily based on historical costs and may or may not be limited in scope or duration by statute. The length of these base rate proceedings can cause the regulated utility businesses to experience regulatory lag in recovering costs and result in earning less than the allowed returns. Decisions are typically subject to appeal, further exacerbating the regulatory lag and leading to additional uncertainty associated with rate case proceedings.

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None.

Cybersecurity is a critical component of AEP’s risk management framework. As an electric utility operating critical infrastructure, AEP is subject to mandatory requirements under applicable federal, state, and industry standards. AEP maintains a risk-based cybersecurity program designed to protect the confidentiality, integrity, and availability of its information technology, operational technology, and critical infrastructure assets.

Cybersecurity Risk Management and Strategy

AEP’s cybersecurity risk management program is designed to identify, assess, and manage risks from cybersecurity threats, including those posed by third parties. The program incorporates a defense-in-depth approach, leverages partnerships with government and peers to assess the evolving threats and aligns with recognized industry standards and regulatory requirements applicable to electric utilities.

Key elements of AEP’s cybersecurity program include, among others:

• Continuous monitoring and detection of cyber threats;

• Vulnerability assessments and penetration testing;

• Incident response planning and exercises;

• Business continuity and disaster recovery planning;

• Security awareness training, including advanced phishing simulations;

• Third-party risk management, including vendor due diligence and contractual controls;

• Cybersecurity insurance coverage.

AEP regularly evaluates and updates its cybersecurity controls, processes, and technologies in response to the evolving threat landscape and regulatory developments. We leverage both internal expertise and external partners to assist with assessments, testing, and program maturity evaluations.

Governance and Oversight

AEP’s Board of Directors, through the Technology Committee, oversees the cybersecurity program and our approach to cyber risk management. The Technology Committee receives periodic updates from management regarding cybersecurity risks, the threat environment, and the status of AEP’s security programs, including significant incidents, if any.

Management’s Role and Expertise

Management is responsible for implementing and maintaining AEP’s cybersecurity programs. Day-to-day oversight is led by AEP’s Senior Vice President (SVP) of Enterprise Security, Resilience, and National Security Policy who reports to AEP’s Chief Executive Officer. The SVP for Enterprise Security, Resilience, and National Security Policy has expertise in electricity sector risk management, critical infrastructure protection, cybersecurity, and incident response. This individual also oversees and leads AEP’s engagements with Federal agencies on cybersecurity and physical security threat information sharing and

partnerships with the Department of Homeland Security, Federal Bureau of Investigation, Department of Energy, and the intelligence community. The SVP for Enterprise Security, Resilience, and National Security Policy also works closely with AEP’s Chief Information Officer, Generation, Transmission, and Distribution operations leadership, along with legal, compliance, internal audit, and business resilience to help ensure cybersecurity risks are identified, assessed, and managed across the enterprise. Management also provides relevant cybersecurity updates to the Audit Committee.

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

GENERATION FACILITIES

The tables below summarize the net maximum capacity of AEP's owned generation plants as of December 31, 2025. 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. AEP's regulated subsidiaries have approved recovery mechanisms in retail jurisdictions that recover the cost of prudently incurred fuel, purchased power and other expenses.

Vertically Integrated Utilities Segment

(a)AEGCo owns a 50% interest in the Rockport Plant units. I&M owns the remaining 50%. Figures presented reflect only the portion owned by AEGCo.

NA Not applicable.

(a)I&M owns a 50% interest in the Rockport Plant units. AEGCo owns the remaining 50%. Figures presented reflect only the portion owned by I&M.

NA Not applicable.