American Electric Power Company Inc. (AEP) entered into an agreement to sell wind energy to Southwestern University in Georgetown. The City of Georgetown will purchase the energy through American Electric Power subsidiary, AEP Energy Partners and sell it to the university for at least 18 years.
 
Southwestern University, signed the agreement to purchase all of its electricity requirements from American Electric Power’s West Texas-based wind turbines. Earlier, it sourced electricity from coal and fossil fuel plants.
 
American Electric Power is focused on green energy in a big way. It recently received $334 million from the U.S. Energy Department to develop a commercial scale project that will capture carbon from its Mountaineer coal fired plant in West Virginia and then inject the gases underground. American Electric Power is already capturing and storing carbon dioxide at its Mountaineer power plant in Mason County.
 
American Electric is one of the largest public utility holding companies catering to approximately 5.2 million customers spread over 11 states. The company offers investors stable underlying core utility earnings, although with only modest growth potential.
 
Consistent performance in the residential and commercial segments, higher rates (in Indiana, Oklahoma, and Virginia), and recovery of coal cost in Ohio, represent a mildly bullish outlook for the stock. However, pruned expansion plans on account of tight credit markets, high debt level, lower off-system and industrial sales, and uncertainty surrounding pending regulatory cases continue to weigh on the stock. We maintain our cautious Neutral recommendation on the stock.
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