Ohio utility giant American Electric Power has ousted its CEO, president, and board chair Julie Sloat after just over a year in the top job and without providing an explanation.
The Columbus-based utility named Sloat president and chief financial officer in August 2022, adding that she would become CEO January 1, 2023. Joining the company in1999, she had held several top regulatory and financial jobs at the parent company and at its AEP Ohio operating utility company.
In announcing the firing Monday ( Feb. 26), AEP said in an anodyne news release, “The Board determined, based on discussions with Sloat, that it is time to identify a new CEO to lead the company’s next chapter. This decision was not a result of any disagreement with Sloat regarding AEP’s operations, policies or financial performance, and was not made for cause or related to any ethical or compliance concern.”
Sloat’s defenestration came amid lackluster 2023 financial performance by the utility holding company, a move by noted corporate raider Carl Icahn to put two of his people on the AEP board of directors, and a continuing investigation by the U.S. Securities and Exchange Commission into whether the company played a role in the massive Ohio bribery scandal that was orchestrated by Akron-based FirstEnergy
The move by Icahn may be the most significant of the events surrounding Sloat’s dismissal. On February 12, AEP announced that it “has entered into an agreement with Icahn Capital L.P. and certain of its affiliates” to name Hunter C. Gary, senior managing director at Icahn Enterprises L.P and Henry P. Linginfelter, retired executive vice president of Southern Company Gas, to the AEP board.
Bloomberg quoted a Guggenheim Securities analyst, “We expect Icahn to look for ways to generate multiple accretion, spanning partial asset sales, potential management changes, to perhaps even a sale of the company in its entirety.”
Bloomberg added, “Icahn’s involvement with AEP is his most recent foray into American utilities. He has also been involved with FirstEnergy Corp., which was embroiled in a federal corruption case involving nuclear subsidies.”
The SEC subpoenaed AEP in May 2021 and August 2022 for information related to the FirstEnergy bribery. The Columbus Dispatch quoted a Monday (Feb. 12) statement from the utility that “AEP and the SEC are engaged in discussions about a possible resolution of the SEC’s investigation and potential claims under the securities laws, Any resolution or filed claims, the outcome of which cannot be predicted, may subject AEP to civil penalties and other remedial measures.”
The same day it fired Sloat, AEP revealed its fourth quarter and full 2023 financial results. The company reported fourth quarter revenues of $4.6 billion, compared to $4.9 billion in 2022’s fourth quarter, with 2023 quarterly earnings of $336.2 million ($0.64/share) compared to 2022 fourth quarter profits of $384.3 million ($.064/share) in 2022. Year-end 2023 earnings were $2.2 billion or $4.26 per share on $19 billion in revenue, compared with earnings of $2.3 billion or $4.51 per share on $19.6 in revenue for year-end 2022.
Board member Benjamin Fowke, named Sloat’s interim replacement, said, “Our team delivered 2023 operating earnings results within our narrowed guidance range as we navigated a dynamic environment of higher interest rates and one of the mildest years for weather in our service territory in the last three decades.” Fowke is former chairman and CEO of Xcel Energy.
Investment web site Seeking Alpha reported Wednesday (Feb. 28) that Bank of America, examining AEP’s earnings and Sloat’s ouster, led it to downgrade its outlook for one of America’s largest investor-owned electric utilities.
AEP serves some 5.6 million customers in 11 states, through seven electric operating companies. AEP’s utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia, West Virginia, and Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP owns nearly 38 GW of coal, gas, nuclear, and renewable generation and a 39,000 mile transmission system.
–Kennedy Maize
White House picks three for FERC
President Biden yesterday said he would nominate three individuals – two Democrats and one Republican – to the Federal Energy Regulatory Commission. If confirmed, the three would fill out the depleted ranks at the head of the independent regulatory agency when Commissioner Allison Clements, a Democrat, leaves the agency June 30. She announced last month she would not seek a second five-year term at FERC.
The nominees are Democrats Judy Chang and David Rosner and Republican Lindsay See. Senate Minority Leader Mitch McConnell (R-Ky.) is recommending See for the FERC slot. Under the law, the commission consists of three members from the party of the president and two from the minority, all appointed to staggered five-year terms. In addition to Clements, the current lineup is Chairman Willie Phillips, a Democrat, and Commissioner Mark Christie, a Republican.
Chang is an experienced energy analyst and former undersecretary of energy and climate solutions for Massachusetts. She earned a master’s degree in public policy from Harvard’s Kennedy School, where she is a Senior Fellow at the Kennedy School’s Mossavar-Rahmani Center for Business and Government. She has a bachelor’s degree in electrical engineering and computer science from the University of California, Davis.
Rosner, a FERC energy industry analyst, has 15 years’ experience with a variety of energy topics. He is on detail to the Senate Energy and Natural Resources Committee’s Democratic staff, under Chairman Joe Manchin (D-W.Va.). He was previously a senior energy advisor at the Department of Energy and an associate director at the Bipartisan Policy Center.
See, a 2011 honors Harvard Law graduate, is West Virginia Solicitor General in the state attorney general’s office. While managing the state’s civil and criminal appeals dockets, she has also focused on regulatory and administrative law and works with multi-state coalitions on national issues.
–Kennedy Maize