Financial Risk Management at American Electric Power
| Case Code: FINA013 Case Length: 14 Pages Period: 2003 Pub Date: 2003 Teaching Note: Not Available |
Price: Rs.300 Organization: American Electric Power Company Industry: Electric Countries: USA Themes: Banking and Financial Management, Microfinance |
Abstract Case Intro 1 Excerpts
Introduction
American Electric Power Company (AEP), one of the largest electric public utility holding companies in the US, served customers in 11 states - Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia. AEP had a generating capacity of 38,000 MW in the US and 4000 MW in the UK. The company owned 38,000 miles of transmission lines, 186,000 miles of distribution lines and 6400 miles of gas pipelines. AEP's financial performance had deteriorated sharply in the early 2000s, as the wholesale energy market in the US shrank significantly. AEP had also incurred significant losses in options trading. In 2002, AEP recorded sales of $14.56 billion and a loss of $519 million.
Business Segments
AEP's principal business segments were:
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