The directors of American Electric Power Co. have removed Julie Sloat from her roles of chairman, president and CEO and elected a former Xcel Energy Inc. leader to take her place during the search for a successor.
Sloat had moved into the top spot at AEP just 14 months ago after working as the company’s CFO and senior vice president of treasury and risk as well as president and CEO of its Ohio utility. She had been with the company, which serves 5.6 million customers in 11 states, since 1999. Taking her place is Ben Fowke, who led Xcel from 2011 until the summer of 2021 and was elected to AEP’s board a few months later.
Speaking to analysts on a Feb. 27 conference call that accompanied AEP’s fourth-quarter results—net income of $336 million, down from $384 million in late 2022, on revenues of about $4.6 billion—Fowke said Sloat’s dismissal was not the result of any disagreement about operations or policies or related to any ethics or compliance issues. He added that he expects the CEO search will take at least six months but not more than a year.
“The strategy’s great,” Fowke said. “We just have to execute and that’s what we’re focused on.”
The CEO change comes after AEP has since December had to digest adverse regulatory rulings in Texas, West Virginia and with the Federal Energy Regulatory Commission. Fowke said he intends “get very much involved” in regulatory strategy, which is being led by Executive Vice President Peggy Simmons.
“We’ve got a good team,” Fowke said. “We’ll make sure that we do what we need to do to get better outcomes in the future.”
Sloat’s exit also comes two weeks after AEP’s board announced it had reached an agreement with investment firm Icahn Enterprises to have the latter fill two new board seats and appoint a non-voting board observer. Veteran investor and activist Carl Icahn said then his team was looking forward to working with Sloat and AEP’s board “to optimize the value and performance” of AEP’s businesses.
Those operations will continue to include several divisions that had been on or appeared to be headed to the auction block: Fowke said the board has decided to retain the Transource Energy competitive transmission subsidiary as well as investments in the Pioneer and Prairie Wind transmission joint ventures. (AEP’s leaders are close to wrapping the divestiture of the company’s AEP Energy retail and AEP OnSite Partners distributed resources units.) Combined, AEP has invested about $550 million in Transource and the JVs and Sloat said last summer that selling those assets would let the company further narrow its focus on its regulated businesses.
“We think it’s a great asset,” Fowke said on the conference call about Transource. “Given the various changes that FERC is looking at, I think it gives us a lot of optionality.”
In looking to build further in the competitive transmission market, AEP joins NextEra Energy Inc., where leaders a month ago said they will invest nearly $2 billion in three projects over the next four years. Other utility leaders have in recent months also been talking up the need for more investment in transmission capacity to help meet growing demand from commercial and industrial customers.
Shares of AEP (Ticker: AEP) were up nearly 3% to about $83.10 in afternoon training Feb. 27. They are up about 5% over the past six months, which has grown the company’s market capitalization to almost $44 billion.
