AEP, KKR, and PSP Investments Form Strategic Partnership for Transmission Expansion

American Electric Power (AEP) has announced a significant strategic partnership with KKR and PSP Investments, marking a notable investment into the transmission sector. The completion of this transaction took place on June 5, 2025, confirming an earlier announcement made in January of the same year. KKR and PSP Investments will jointly invest approximately $2.82 billion, acquiring a 19.9% minority equity stake in AEP's transmission companies located in Ohio and Indiana.

This equity stake corresponds to around 5% of AEP's total transmission assets, indicating the commitment of these investment firms to enhancing the electrical infrastructure in the regions served by AEP. This strategic infusion of capital is aligned with AEP’s broader plan to boost its energy capacity over the next five years, with an ambitious $54 billion capital improvement program.

With projections estimating an influx of over 20 gigawatts in new power demand across AEP's service areas by the end of the decade, this partnership arrives at a crucial time. AEP anticipates increasing interest from nearly 600 new and existing customers, representing almost 180 gigawatts in energy demand, eager to connect to their transmission system.

Bill Fehrman, the CEO of AEP, emphasized the importance of this partnership, stating, "AEP built the nation’s largest transmission grid, and our position as an industry leader in the transmission space enabled us to attract world-class partners like KKR and PSP Investments. This investment supports not only our financial framework but also ensures the reliability and efficiency of power supply within Indiana, Michigan, and Ohio."

Kathleen Lawler, managing director at KKR, expressed honor at being chosen as AEP's partner in this transformative endeavor. "We look forward to working closely with PSP Investments to help modernize AEP's transmission systems, ensuring we meet the surging customer demand while enhancing the overall reliability of the electric grid."

Michael Rosenfeld from PSP Investments articulated a shared excitement for the collaboration, stating, "We aim to reinforce AEP's status as a leader in the transmission sector and to be a part of developments that will yield essential infrastructure improvements in AEP’s rapidly growing service territories."

AEP has a longstanding reputation for reliability and has recently augmented its growth strategy to cope with the increasing demands for power. Currently, AEP operates the largest electric transmission network in the United States, comprising approximately 40,000 miles of transmission lines alongside more than 225,000 miles of distribution lines catering to the needs of 5.6 million customers across eleven states.

With a focus on operational excellence and safety, AEP’s comprehensive capital investment serves not only to enhance the service reliability for customers but also to generate economic opportunities for the communities it serves. The AEP family includes several subsidiaries, such as AEP Ohio, AEP Texas, and Appalachian Power, ensuring that its footprint covers diverse geographical areas with tailored solutions.

As this partnership develops, it is set to play a pivotal role in addressing the essential energy needs of tomorrow, adapting to the complex shifts in both demand and technological advancements in grid management. AEP's collaboration with KKR and PSP Investments represents an essential step toward bolstering infrastructure, enhancing community reliability, and supporting a sustainable energy future.

AEP's commitment to these advancements is evident not just in their financial strategies but in their operational goals, positioning itself as an exemplar in the energy sector by continuously evolving alongside the dynamic market demands. AEP remains poised for a bright future with substantial investments directed towards enhancing its service capabilities across its operating regions.