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Risk Factors Dashboard

Once a year, publicly traded companies issue a comprehensive report of their business, called a 10-K. A component mandated in the 10-K is the ‘Risk Factors’ section, where companies disclose any major potential risks that they may face. This dashboard highlights all major changes and additions in new 10K reports, allowing investors to quickly identify new potential risks and opportunities.

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Risk Factors - AEP

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ITEM 1A. RISK FACTORS

GENERAL RISKS OF REGULATED OPERATIONS

AEP may not be able to recover the costs of substantial planned investment in capital improvements and additions. (Applies to all Registrants)

AEP’s business and capital investment plans call for extensive investment in capital improvements and additions, including the construction or acquisition of additional transmission and generation facilities, installation and interconnection with data centers, modernizing existing infrastructure, installation of environmental upgrades and retrofits as well as other initiatives. AEP’s public utility subsidiaries currently provide service at rates approved by one or more regulatory commissions. If these regulatory commissions do not approve adjustments to the rates charged, affected AEP subsidiaries would not be able to recover the costs associated with their investments. This would cause financial results to be diminished.

The business and capital investment plans of AEP depend, in part, on the continued growth and viability of data centers and large load customers interconnecting with the AEP System. (Applies to all Registrants)

AEP is experiencing current and projected load demands that exceed historical experience, creating a business need for new power generating resources and transmission facilities. Much of this demand is driven by interconnecting with and providing power to data centers and other large load customers to serve an increasingly digital economy and to support AI. The business and capital investment plans of AEP are focused on meeting these current and projected needs. If these increased demands for electricity do not occur as projected or are not sustained as projected, for any reason, it could affect AEP’s financial condition.

The business and capital investment plans of AEP are subject to execution risks. (Applies to all Registrants)

AEP’s business and capital investment plans for the construction of new projects, including providing service to new data centers and other large load customers, involve execution risks that could adversely affect AEP’s financial performance and/or impair AEP’s ability to execute on these plans. These risks include delays, supply chain disruption and the unavailability of materials, cost overruns, inflation, the cost and availability of capital, labor disputes or shortages and other factors that could cause the total cost and timing of any project to exceed estimates. While AEP utilizes measures to limit the impact of these events, if any of these projects are canceled for any reason, including shifts in large customer needs, preferences or financial stability, shifts in demand for large customer products or services, changes in technology, failure to receive necessary regulatory approvals, cost recovery and/or siting or environmental permits, mitigation efforts might not be sufficient and it could result in significant unrecoverable costs and the execution of AEP’s business and capital investment plans would be negatively impacted. In addition, if any construction work or investments have been recorded as an asset, an impairment may need to be recorded in the event a project is canceled. This would cause financial results to be diminished.

Meeting the significant increase in electricity demand from new data centers and other large‑load customers will require substantial investment in new generation and transmission facilities. These projects may require levels of capital that exceed historical utility financing needs, and the ability of the capital markets to supply sufficient funding for large‑scale infrastructure expansion is uncertain. AEP’s ability to undertake these capital‑intensive projects depends in part on continued access to debt and equity markets. If capital markets experience reduced liquidity, constrained capacity for utility issuances, or diminished investor appetite for long‑duration infrastructure investments, AEP may be unable to obtain the financing required to support these projects. Even if capital is available, it may only be obtainable at significantly higher cost due to market conditions or competition for capital among utilities and other sectors. Any inability to secure adequate financing could delay or prevent the construction of required facilities, impair AEP’s ability to serve its customers, and adversely affect future net income, cash flows and financial condition.

(Applies to all Registrants)

The rates customers pay to AEP regulated utility businesses are subject to approval by the FERC and the respective state utility commissions of Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia. The occurrence of any of the following could reduce future net income and cash flows and negatively impact financial condition:

•If regulated utility earnings exceed the return established by a relevant commission, that commission could reduce future rates;

•The overturning or reversal on appeal of previously authorized recovery; and

•Any legislation, regulatory action or litigation outcome that triggers a reversal of a regulatory asset or deferred cost or establishment of a regulatory liability.

The regulated utility businesses, and the energy industry as a whole have experienced a period of rising costs and investments and an upward trend in spending, especially with respect to infrastructure investments, which are likely to continue in the foreseeable future. The increase in spending could trigger increased regulatory scrutiny to authorizing cost recovery, especially in a rising cost environment, whether due to inflation, tariffs, high fuel prices or otherwise, and/or in periods of economic decline or hardship. The inability to obtain cost recovery would adversely affect AEP’s business, financial position, results of operations and cash flows. See Note 4 - Rate Matters for additional information.

Regulated electric revenues and earnings are subject to prudency review. (Applies to all Registrants)

Regulators have initiated and may initiate additional proceedings to investigate the prudence of costs in the AEP regulated utility businesses. In these proceedings and in base rate proceedings regulators examine the reasonableness or prudence of operation and maintenance practices, the level of expenditures (including storm costs and costs associated with capital projects), the allowed rates of return and rate base, the proposed resource acquisitions and the previously incurred capital expenditures that the regulated utility businesses seek to keep or place in rates. Regulators may disallow costs found not to have been prudently incurred or found not to have been incurred in compliance with applicable tariffs, creating risk in the ultimate recovery of those costs. Disallowance of these costs would adversely affect AEP’s business, financial position, results of operations and cash flows.

Regulatory bodies may not allow recovery of costs incurred on a timely basis. (Applies to all Registrants)

Regulatory proceedings relating to rates and other matters typically involve multiple parties seeking to limit or reduce rates. Traditional base rate proceedings generally have long timelines, are primarily based on historical costs and may or may not be limited in scope or duration by statute. The length of these base rate proceedings can cause the regulated utility businesses to experience regulatory lag in recovering costs and result in earning less than the allowed returns. Decisions are typically subject to appeal, further exacerbating the regulatory lag and leading to additional uncertainty associated with rate case proceedings.

AEP is subject to negative publicity. (Applies to all Registrants)

The AEP regulated utility businesses have large customer and stakeholder bases and, as a result, could be subject to public criticism or adverse publicity focused on issues including the operation and maintenance of their assets and infrastructure, their preparedness for major storms or other extreme weather events and/or the time it takes to restore service after such events, or the quality of their service or the reasonableness of the cost of their service. In addition, the public holds diverse and often conflicting views on the use of fossil fuels which can subject AEP to adverse publicity in connection with its use of fossil fuels. Criticism or adverse publicity of any nature could render legislatures and other governing bodies, public service commissions and other regulatory authorities, and government officials less likely to view AEP or the applicable regulated utility in a favorable light and could potentially negatively affect legislative or regulatory processes or outcomes, as well as lead to increased regulatory oversight, more stringent legislative or regulatory requirements, or other legislation or regulatory actions that adversely affect the regulated utility businesses.

AEP’s transmission investment strategy and execution are dependent on federal and state regulatory policy and implementation by RTOs. (Applies to all Registrants)

A significant portion of AEP’s earnings is derived from transmission investments and activities. If the FERC were to adopt a different policy, if states were to limit or restrict such policies, or if transmission needs do not continue or develop as projected, AEP’s strategy of investing in transmission could be impacted. Further, AEP’s transmission strategy seeks to obtain authorization or to win bids to install, construct and operate new transmission lines and facilities. However, there can be no assurance that PJM, SPP, ERCOT or other RTOs will authorize new transmission projects or will award such projects to AEP.

Certain elements of AEP’s transmission formula rates have been challenged, which could result in lowered rates and/or refunds of amounts previously collected. (Applies to all Registrants other than AEP Texas)

AEP provides transmission service under rates regulated by the FERC. All aspects of AEP’s rates accepted or approved by the FERC, including the formula rate templates, the rates of return on the actual equity portion of its respective capital structures and the approved targeted capital structures, are subject to challenge by interested parties at the FERC, or by the

FERC on its own initiative. In addition, interested parties may challenge the annual implementation and calculation by AEP of its projected rates and formula rate true-up pursuant to its approved formula rate templates under AEP’s formula rate implementation protocols. If a challenger can establish that any of these aspects are unjust, unreasonable, unduly discriminatory or preferential, then the FERC can make appropriate prospective adjustments to them and/or disallow any of AEP’s inclusion of those aspects in the rate setting formula.

Inquiries related to rates of return, as well as challenges to the formula rates of other utilities, are ongoing in other proceedings at the FERC. The results of these proceedings could potentially negatively impact AEP in any future challenges to AEP’s formula rates. If the FERC orders revenue reductions, including refunds, in any future cases related to its formula rates, it could reduce future net income and cash flows and impact financial condition.

End-use consumers and entities supplying electricity to end-use consumers may also attempt to influence government and/or regulators to change the rate setting methodologies that apply to AEP, particularly if rates for delivered electricity increase substantially.

AEP faces risks related to project siting, financing, construction, permitting, governmental approvals and the negotiation of project development agreements that may impede their development and operating activities. (Applies to all Registrants)

AEP owns, develops, constructs, manages and operates electric generation, transmission and distribution facilities. A key component of AEP's growth is its ability to construct and operate these facilities. As part of these operations AEP must periodically apply for licenses and permits from various local, state, federal and other regulatory authorities and abide by their respective conditions. Should AEP be unsuccessful in obtaining necessary licenses or permits on acceptable terms or resolving third-party challenges to such licenses or permits, should there be a delay in obtaining or renewing necessary licenses or permits or should regulatory authorities initiate any associated investigations or enforcement actions or impose related penalties or disallowances, it could reduce future net income and cash flows and impact financial condition. Any failure to timely construct contracted generation, transmission and distribution facilities or to negotiate successful project development agreements for new facilities with third-parties, including new data centers and large load customers, could impact future net income and cash flows and impact financial condition. Any failure to timely construct contracted generation, transmission and distribution facilities or to negotiate successful project development agreements for new facilities with third-parties, including new data centers and other large load customers, could impact future net income and cash flows and impact financial condition.

Changes in technology and regulatory policies may lower the value of electric utility facilities and franchises. (Applies to all Registrants)

AEP primarily generates electricity at large central facilities and delivers that electricity over its transmission and distribution facilities to customers usually situated within an exclusive franchise. This method results in economies of scale and generally lower costs than newer technologies, such as fuel cells and microturbines, and distributed generation using either new or existing technology. Other technologies, such as light emitting diodes (LEDs), increase the efficiency of electricity and, as a result, lower the demand for it. These developments can challenge AEP’s competitive ability to maintain relatively low cost, efficient and reliable operations, to establish fair regulatory mechanisms and to provide cost-effective programs and services to customers. In the event that lower cost alternatives for generation, as a result of changing regulatory policies, subsidies or advances in technology, are added to the available generation supply, they could displace current resources or reduce the price at which market participants sell their electricity.

AEP is exposed to nuclear generation risk. (Applies to AEP and I&M)

I&M owns the Cook Plant, which consists of two nuclear generating units for a rated capacity of 2,296 MWs, or about a tenth of the regulated generating capacity in the AEP System as of December 31, 2025. AEP and I&M are, therefore, subject to the risks of nuclear generation, which include the following:

•The potential harmful effects on the environment and human health due to an adverse incident/event resulting from the operation of nuclear facilities and the storage, handling and disposal of radioactive materials such as SNF.

•Limitations on the amounts and types of insurance commercially available to cover losses that might arise in connection with nuclear operations.

•Uncertainties with respect to contingencies and assessment amounts triggered by a loss event (federal law requires owners of nuclear units to purchase the maximum available amount of nuclear liability insurance unless the NRC specifies a lesser amount and potentially contribute to the coverage for losses of others).

•Uncertainties with respect to the technological and financial aspects of decommissioning nuclear plants at the end of their licensed lives.

There can be no assurance that I&M’s preparations or risk mitigation measures will be adequate if these risks are triggered.

The NRC has broad authority under federal law to impose licensing and safety-related requirements for the operation of nuclear generation facilities. In the event of non-compliance, the NRC has the authority to impose fines or shut down a unit, or both, depending upon its assessment of the severity of the situation, until compliance is achieved. Revised safety requirements promulgated by the NRC could necessitate substantial capital expenditures at nuclear plants. In addition, if an incident did occur, it could harm results of operations or financial condition. A major incident at a nuclear facility anywhere in the world could cause the NRC to limit or prohibit the operation or licensing of any domestic nuclear unit. Moreover, a major incident at any nuclear facility in the U.S. could require AEP or I&M to make material contributory payments.

Costs associated with the operation (including fuel), maintenance and retirement of nuclear plants continue to be more significant and less predictable than costs associated with other sources of generation, in large part due to changing regulatory requirements and safety standards, availability of nuclear waste disposal facilities and experience gained in the operation of nuclear facilities. Costs also may include replacement power, any unamortized investment at the end of the useful life of the Cook Plant (whether scheduled or premature), the carrying costs of that investment and retirement costs. The ability to obtain adequate and timely recovery of costs associated with the Cook Plant is not assured.

AEP subsidiaries are exposed to risks through participation in the market and transmission structures in various regional power markets that are beyond their control. (Applies to all Registrants)

Differences in the market and transmission structures in various regional power markets are likely to affect results. The rules governing the various RTOs, including SPP and PJM, may also change from time to time which could affect costs or revenues. In addition, these RTOs may assess costs resulting from improved transmission reliability, reduced transmission congestion and firm transmission rights. As members of these RTOs, AEP’s subsidiaries are subject to certain additional risks, including the allocation among existing members, of losses caused by unreimbursed defaults of other participants in these markets and resolution of complaint cases that may seek refunds of revenues previously earned by members of these markets.

AEP could be subject to higher costs and/or penalties related to mandatory reliability standards. (Applies to all Registrants)

Owners and operators of the bulk power transmission system are subject to mandatory reliability standards promulgated by the NERC and enforced by the FERC. The standards are based on the functions that need to be performed to ensure the bulk power system operates reliably and are guided by reliability and market interface principles. Compliance with new reliability standards may subject AEP to higher operating costs and/or increased capital expenditures. If AEP were found not to be in compliance with the mandatory reliability standards, AEP could be subject to sanctions, including substantial monetary penalties, which likely would not be recoverable from customers through regulated rates.

A substantial portion of the receivables of AEP Texas is concentrated in a small number of REPs, and any delay or default in payment could adversely affect its cash flows, financial condition and results of operations. (Applies to AEP and AEP Texas)

AEP Texas collects receivables from the distribution of electricity from REPs that supply the electricity it distributes to its customers. As of December 31, 2025, AEP Texas did business with approximately 146 REPs. Adverse economic conditions, structural problems in the market served by ERCOT or financial difficulties of one or more REPs could impair the ability of these REPs to pay for these services or could cause them to delay such payments. AEP Texas depends on these REPs to remit payments on a timely basis. Any delay or default in payment by REPs could adversely affect cash flows, financial condition and results of operations. If a REP were unable to meet its obligations, it could consider, among various options, restructuring under the bankruptcy laws, in which event such REP might seek to avoid honoring its obligations, and claims might be made by creditors involving payments AEP Texas had received from such REP.

RISKS RELATED TO MARKET, ECONOMIC OR FINANCIAL VOLATILITY AND OTHER RISKS

AEP’s financial performance may be adversely affected if AEP is unable to successfully operate facilities or perform certain corporate functions. (Applies to all Registrants)

Performance is highly dependent on the successful operation of generation, transmission and/or distribution facilities. Operating these facilities involves many risks, including:

•Operator error and breakdown or failure of equipment or processes.

•Operating limitations that may be imposed by environmental or other regulatory requirements.

•Labor disputes.

•Compliance with mandatory reliability standards, including mandatory cybersecurity standards.

•Information technology failure, including failure of AI technology, that impairs AEP’s information technology infrastructure or disrupts normal business operations.

•Information technology failure that affects AEP’s ability to access customer information or causes loss of confidential or proprietary data that materially and adversely affects AEP’s reputation or exposes AEP to legal claims.

•Supply chain disruptions and inflation.

•Fuel or water supply interruptions caused by transportation constraints, adverse weather such as drought, non-performance by suppliers and other factors.

•Catastrophic events such as extreme weather, fires, earthquakes, explosions, hurricanes, tornadoes, winter storms, terrorism (including cyber-terrorism), floods or other similar occurrences.

•Fuel costs and related requirements triggered by financial stress in the coal industry.

Physical attacks or hostile cyber intrusions could severely impair operations, lead to the disclosure of confidential information and damage AEP’s reputation. (Applies to all Registrants)

Risks from cybersecurity and physical threats to energy infrastructure are increasing. Threat actors, including sophisticated nation-state actors and criminal groups, exploit potential vulnerabilities in the electric utility industry, grid infrastructure and other energy infrastructures. Attacks and disruptions, which could involve physical, cyber and hybrid targeting of physical and cyber assets, are increasingly sophisticated and dynamic. The increased implementation of, and reliance on, information technologies and networks to manage business operations, including the operation of technical systems, as well as AEP’s use of numerous vendors and suppliers, create additional points of vulnerability that could be, and in certain instances have been, exploited by malicious threat actors. Several U.S. government agencies have warned that the energy sector and its supply chains are subject to increasing risks of physical attacks, ransomware attacks and cybersecurity threats, and that the risks may escalate during periods of heightened geopolitical tensions. In addition, the rapid evolution and increased adoption of AI technologies may intensify AEP’s cybersecurity risks.

A security breach of AEP’s physical assets or information systems, or those of AEP’s competitors, vendors, business partners and interconnected entities (including RTOs) could materially impact AEP by, among other things, impairing the availability of electricity transmitted and distributed by AEP and/or the reliability of generation, transmission and distribution systems, damaging grid infrastructure, interrupting critical business functions, impairing the availability of vendor services and materials that AEP relies on to maintain its operations, or by leading to the theft or inappropriate release of certain types of information, including critical infrastructure information, system data and architecture, sensitive customer, vendor, or employee data, or other confidential data.

AEP has not identified any cybersecurity incidents that have materially affected or are reasonably likely to materially affect its business strategy, results of operation or financial condition.

If a material physical or cybersecurity breach or disruption were to occur, AEP’s reputation could be negatively affected, customer confidence in AEP could be diminished and AEP could be subject to legal claims, regulatory exposure, loss of revenues, and increased costs, including infrastructure repairs or operations shutdown, all of which could materially affect AEP’s financial condition and materially damage its business reputation. Moreover, the amount and scope of insurance maintained against losses resulting from any such security breaches or disruptions may not be sufficient to cover losses or otherwise adequately compensate for any resulting business disruptions. The continued increase in federal and state regulatory requirements related to cybersecurity and evolving threat actor-capabilities could require changes to measures currently undertaken by AEP or to its business operations and could adversely affect its financial condition.

The failure of AEP or third-party vendor information technology systems, or the failure to enhance existing information technology systems and implement new technology, could adversely affect AEP. (Applies to all Registrants)

AEP’s operations are dependent upon the proper functioning of its internal systems, including the information technology systems that support underlying business processes. Any significant failure or malfunction of such information technology systems may result in disruptions of operations. AEP’s information technology systems are dependent upon global communications and cloud service providers, as well as their respective vendors, many of whom have at some point experienced significant system failures and outages in the past and may experience such failures and outages in the future. These providers’ systems are susceptible to cybersecurity and data breaches, outages from fire, floods, power loss, telecommunications failures, break-ins and similar events. Failure to prevent or mitigate data loss from system failures or outages could materially affect AEP’s results of operations, financial position and cash flows.

The amount of taxes imposed on AEP could change. (Applies to all Registrants)

AEP is subject to income taxation at the federal level and by certain states and municipalities. In determining AEP’s income tax liability for these jurisdictions, management monitors changes to the applicable tax laws and related regulations, administrative interpretations and judicial determinations, including tax incentives and credits designed to support the sale of energy from utility scale renewable energy facilities. While management believes AEP complies with current prevailing laws, one or more taxing jurisdictions could seek to impose incremental or new taxes on the company. At the federal level, management is monitoring the potential for changes in current tax policy, including tax rates, tax credits and incentives. Any adverse developments in tax laws, incentives, credits or regulations, including legislative changes, judicial holdings or administrative interpretations, could have a material and adverse effect on financial condition and results of operations.

Changes in U.S. or foreign trade policies, including the imposition of tariffs and other protectionist trade measures, and other factors beyond AEP’s control may adversely impact future net income and cash flows and financial condition.

Executive actions have been taken and additional measures proposed that are intended to alter the U.S. approach to international trade policy, the terms of certain existing bilateral or multi‐lateral trade agreements and trading arrangements with foreign countries. Such changes to U.S. international trade policy, and any retaliatory trade measures that foreign governments may take in response, including the imposition of tariffs, sanctions, export or import controls, or other measures that restrict international trade, or the threat of such actions, could result in additional increases in the cost of certain goods, services and cost of capital and exacerbate supply chain issues. In addition, related geopolitical and domestic political developments, such as existing and potential trade wars, uncertainty regarding changes in trade policy, and other events beyond AEP’s control, have increased and may continue to increase levels of political and economic unpredictability globally and the volatility of global financial markets. As a result, prevailing economic conditions may reduce future net income and cash flows and negatively impact financial condition.

If AEP is unable to access capital markets or insurance markets on reasonable terms, for any reason, including negative publicity, it could reduce future net income and cash flows and negatively impact financial condition. (Applies to all Registrants)

AEP relies on access to capital markets as a significant source of liquidity for capital requirements not satisfied by operating cash flows. AEP also relies on access to insurance markets to assist in managing its risk and liability profile. Volatility, increased interest rates and reduced liquidity in the financial markets could affect AEP’s ability to raise capital on reasonable terms to fund capital needs, including construction costs and refinancing maturing indebtedness. In addition, AEP has exposure to international banks, including those in Europe, Canada and Asia. Disruptions in these markets could reduce or restrict AEP’s ability to secure sufficient liquidity or secure liquidity at reasonable terms. As of December 31, 2025, approximately 8%, 23% and 15% of the Registrants’ available credit facilities were with European, Canadian, and Asian banks, respectively.

In the past, certain sources of insurance and debt and equity capital have expressed unwillingness to provide insurance for or to invest in companies, such as AEP, that rely on fossil fuels. The public holds diverse and often conflicting views on the use of fossil fuels. AEP has multiple stakeholders, including shareholders, customers, associates, federal and state regulatory authorities and the communities in which AEP operates, and these stakeholders will often have differing priorities and expectations regarding issues related to the use of fossil fuels. Any adverse publicity in connection with AEP’s use of fossil fuels could curtail availability from certain sources of capital. Additionally, certain terms that AEP may be required to include in its financing agreements and arrangements may not be acceptable to certain investors, which could limit the availability of, or increase the cost of, capital.

If sources of capital for AEP are reduced, capital costs could increase materially. Restricted access to capital or insurance markets and/or increased borrowing costs or insurance premiums could reduce future net income and cash flows and negatively

impact financial condition. If AEP is not able to access debt or equity at competitive rates or at all, the ability to finance its operations and implement its strategy and business plan as scheduled could be adversely affected. An inability to access debt and equity may limit AEP’s ability to pursue improvements or acquisitions that it may otherwise rely on for future growth.

Shareholder activism could cause AEP to incur significant expense, hinder execution of AEP’s business strategy and impact AEP’s stock price. (Applies to all Registrants)

Shareholder activism, which can take many forms and arise in a variety of situations, could result in substantial costs and divert management’s and the AEP Board’s attention and resources from AEP’s business. Additionally, such shareholder activism could give rise to perceived uncertainties as to AEP’s future, adversely affect AEP’s relationships with its employees, customers or service providers and make it more difficult to attract and retain qualified personnel. Also, AEP may be required to incur significant fees and other expenses related to activist shareholder matters, including for third-party advisors. AEP’s stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any shareholder activism.

Downgrades in AEP’s credit ratings could negatively affect its ability to access capital. (Applies to all Registrants)

The credit ratings agencies periodically review AEP’s capital structure and the quality and stability of earnings and cash flows. From time to time, AEP’s financial metrics have approached, and may in the future approach, thresholds designated by the credit rating agencies for potential ratings downgrades. Any negative ratings actions could constrain the capital available to AEP and could limit access to funding for operations. AEP’s business is capital intensive, and AEP is dependent upon the ability to access capital at rates and on terms management determines to be attractive. If AEP’s ability to access capital becomes significantly constrained, AEP’s interest costs will likely increase and that could reduce future net income and cash flows and negatively impact financial condition.

AEP and AEPTCo have no income or cash flow apart from dividends paid or other payments due from their subsidiaries. (Applies to AEP and AEPTCo)

AEP and AEPTCo are holding companies and have no operations of their own. Their ability to meet their financial obligations associated with their indebtedness and to pay dividends is primarily dependent on the earnings and cash flows of their operating subsidiaries, primarily their regulated utilities, and the ability of their subsidiaries to pay dividends to them or repay loans from them. Their subsidiaries are separate and distinct legal entities that have no obligation (apart from loans from AEP or AEPTCo) to provide them with funds for their payment obligations, whether by dividends, distributions or other payments. Payments to AEP or AEPTCo by their subsidiaries are also contingent upon their earnings and business considerations. AEP and AEPTCo indebtedness and dividends are structurally subordinated to all subsidiary indebtedness. Accordingly, restrictions on the ability of AEP’s subsidiaries to pay dividends to AEP and AEPTCo could materially impact the amount of cash flow available to, and received by, AEP and AEPTCo.

Volatility in the securities markets, interest rates, and other factors could substantially increase defined benefit pension and other postretirement plan costs and the costs of nuclear decommissioning. (Applies to all Registrants and to AEP and I&M with respect to the costs of nuclear decommissioning)

The costs of providing pension and other postretirement benefit plans are dependent on a number of factors, such as the rates of return on plan assets, discount rates, the level of interest rates used to measure the required minimum funding levels of the plan, changes in actuarial assumptions, future government regulation, changes in life expectancy and the frequency and amount of AEP’s required or voluntary contributions made to the plans. Changes in actuarial assumptions and differences between the assumptions and actual values, as well as a significant decline in the value of investments that fund the pension and other postretirement plans, if not offset or mitigated by a decline in plan liabilities, could increase pension and other postretirement expense, and AEP could be required from time to time to fund the pension plan with significant amounts of cash. Such cash funding obligations could have a material impact on liquidity by reducing cash flows and could negatively affect results of operations.

Additionally, I&M holds a significant amount of assets in its nuclear decommissioning trusts to satisfy obligations to decommission its nuclear plant. The rate of return on assets held in those trusts can significantly impact both the costs of decommissioning and the funding requirements for the trusts.

Supply chain disruptions, tariffs and inflation could negatively impact operations and corporate strategy. (Applies to all Registrants)

AEP’s operations and business plans depend on the global supply chain to procure the equipment, materials and other resources necessary to build and provide services in a safe and reliable manner. This can result in the shortage of critical items. International tensions from any source, including the ramifications of regional conflict or increased tariffs, could further exacerbate global supply chain upheaval. Any disruptions and shortages could adversely impact business operations and corporate strategy. The current administration has implemented tariffs on certain imported goods and may impose additional tariffs. The constraints in the supply chain could restrict the availability and delay the construction, maintenance or repair of items that are needed to support normal operations or are required to execute on AEP’s corporate strategy for continued capital investment in utility equipment and impact AEP’s strategy to transition its generation fleet. These disruptions and constraints could reduce future net income and cash flows and impact financial condition.

The United States economy has experienced an inflationary environment and supply chain disruptions have contributed to higher prices of components, materials, equipment and other needed commodities. A prolonged continuation or a further increase in the severity of supply chain and inflationary disruptions, including increased tariffs, could result in additional increases in the cost of certain goods, services and cost of capital and further extend lead times. AEP typically recovers increases in capital expenses from customers through rates in regulated jurisdictions. Failure to recover increased capital costs could reduce future net income and cash flows and possibly harm AEP’s financial condition. Increases in inflation raises costs for labor, materials and services, and failure to secure these on reasonable terms may adversely impact financial condition.

AEP’s results of operations and cash flows may be negatively affected by a lack of growth or slower growth in the number of customers, a decline in customer demand or a recession. (Applies to all Registrants)

Growth in customer accounts and growth of customer usage each directly influence demand for electricity and the need for additional power generation and delivery facilities. Customer growth and customer usage are affected by a number of factors outside the control of AEP, such as economic and demographic conditions, population changes, job and income growth, housing starts, new business formation and the overall level of economic activity. Some or all of these factors could impact the demand for electricity.

Failure to attract and retain an appropriately qualified workforce and management could harm results of operations. (Applies to all Registrants)

Certain events, such as an aging workforce without appropriate replacements, mismatch of skillset or complement to future needs, or unavailability of contract resources may lead to operating challenges and increased costs. The challenges include potential higher rates of existing employee departures, lack of resources, loss of knowledge and a lengthy time period associated with skill development. Advancements in artificial intelligence and other emerging technologies may require significant changes to the size, skills, and composition of AEP’s workforce, and the inability to adapt to these evolving talent needs could exacerbate existing workforce challenges and adversely affect AEP’s operations and financial performance. In this case, costs, including costs for contractors to replace employees, productivity costs and safety costs, may rise. Failure to hire and adequately train replacement employees, including the transfer of significant internal historical knowledge and expertise to the new employees, or the future availability and cost of contract labor may adversely affect the ability to manage and operate the business. If AEP is unable to successfully attract and retain an appropriately qualified workforce, operations may be negatively impacted and future net income and cash flows may be reduced.

Difficulties in sustaining leadership continuity could negatively impact AEP’s business and financial condition. The ability to maintain strong leadership relies on effective succession planning, and gaps in preparing or transitioning individuals into critical roles may impact performance.

Changes in the price of purchased power and commodities, the cost of procuring fuel, emission allowances for criteria pollutants and the costs of transport may increase AEP’s cost of purchasing and producing power, impacting financial performance. (Applies to all Registrants except AEP Texas, AEPTCo and OPCo)

AEP is exposed to changes in the price and availability of purchased power and fuel (including the cost to procure coal and gas) and the price and availability to transport fuel.

•AEP is exposed to changes in the price and availability of fuel, including coal, natural gas and uranium, as existing contracts for the supply of such fuel end or are not honored.

•The inability to procure fuel at costs that are economical could cause AEP to retire generating capacity prior to the end of its useful life.

•AEP is exposed to changes in the price and availability of emission allowances.

•AEP is exposed to changes in the price and availability of diesel, the primary fuel used in transporting coal by barge.

While AEP typically recovers such fuel-related expenses pursuant to rate recovery mechanisms in regulated jurisdictions, the failure to recover these costs could reduce future net income and cash flows and possibly harm AEP’s financial condition.

Prices for coal, natural gas and emission allowances have shown material swings in the past. Changes in the cost of purchased power, fuel or emission allowances and changes in the relationship between such costs and the market prices of power could reduce future net income and cash flows and negatively impact financial condition. In addition, actual power prices and fuel costs will differ from those assumed in financial projections used to value trading and marketing transactions, and those differences may be material. As a result, as those transactions are marked-to-market, they may impact future results of operations and cash flows and impact financial condition.

AEP is subject to physical and financial risks associated with climate change. (Applies to all Registrants)

Climate change creates physical and financial risk. Physical risks from climate change may include an increase in sea level and changes in weather conditions, such as changes in precipitation and extreme weather events, such as fires. Customers’ energy needs vary with weather conditions, primarily temperature and humidity. For residential customers, heating and cooling represent their largest energy use. To the extent weather conditions are affected by climate change, customers’ energy use could increase or decrease depending on the duration and magnitude of the changes.

Increased energy use due to weather changes may require AEP to invest in additional generating assets, transmission and other infrastructure to serve increased load. Decreased energy use due to weather changes may affect financial condition through decreased revenues. Extreme weather conditions in general require more system backup, adding to costs, and can contribute to increased system stress, including service interruptions. Weather conditions outside of the AEP service territory could also have an impact on revenues. AEP buys and sells electricity depending upon system needs and market opportunities. Extreme weather conditions creating high energy demand on AEP’s own and/or other systems may raise electricity prices as AEP buys short-term energy to serve AEP’s own system, which would increase the cost of energy AEP provides to customers.

Severe weather and weather-related events impact AEP’s service territories, primarily when thunderstorms, tornadoes, hurricanes, fires, floods and snow or ice storms occur. To the extent the frequency and intensity of extreme weather events and storms increase, AEP’s cost of providing service will increase, including the costs and the availability of procuring insurance related to such impacts, and these costs may not be recoverable. Changes in wind patterns or in precipitation resulting in droughts, water shortages or floods could adversely affect operations, principally wind generation facilities for changes in wind patterns and the fossil fuel generating units for changes in precipitation. A change in wind patterns or a negative impact to water supplies due to long-term drought conditions or severe flooding could adversely impact AEP’s ability to provide electricity to customers, as well as increase the price they pay for energy. AEP may not recover all costs related to mitigating these physical and financial risks.

To the extent climate change impacts a region’s economic health, it may also impact revenues. AEP’s financial performance is tied to the health of the regional economies AEP serves. The price of energy, as a factor in a region’s cost of living as well as an important input into the cost of goods and services, impacts the economic health of the communities within AEP’s service territories. Climate change may impact the economy, which could impact sales and revenues. The cost of additional regulatory requirements, such as regulation of carbon dioxide emissions, could impact the availability of goods and prices charged by AEP’s suppliers which would normally be borne by consumers through higher prices for energy and purchased goods. To the extent financial markets view climate change and carbon dioxide emissions as a financial risk, this could negatively affect AEP’s ability to access capital markets or cause AEP to receive less than ideal terms and conditions in capital markets.

The occurrence of one or more wildfires could cause tremendous loss, impact the market value and credit ratings of Registrants’ securities and have a material adverse effect on Registrants’ financial condition. (Applies to all Registrants)

More frequent and severe drought conditions, extreme swings in amount and timing of precipitation, changes in vegetation, unseasonably warm temperatures, very low humidity, stronger winds and other factors have increased the duration of the wildfire season and the potential impact of an event. AEP’s infrastructure could pose risks to safety and system reliability and wildfire mitigation initiatives may not be successful or effective in preventing or reducing wildfire-related events. Wildfires can occur even when effective mitigation procedures are followed. Despite AEP’s early-stage wildfire mitigation initiatives, a wildfire could be ignited, spread and cause damages, which could subject AEP to significant liability. Other potential risks associated with wildfires include the inability to secure sufficient insurance coverage, increased costs for insurance and

mitigation efforts, regulatory recovery risk, litigation risk, and the potential for a credit downgrade and subsequent additional costs to access capital markets.

The generation, transmission and distribution of electricity are dangerous and involve inherent risks of damage to private property and injury to AEP’s workforce and the general public. (Applies to all Registrants)

Electricity poses hazards for AEP’s workforce and the general public in the event that either comes in contact with electrical current or equipment, including through energized downed power lines or through equipment malfunctions. In addition, the risks associated with the operation of transmission and distribution assets and power generation and storage facilities include public and workforce safety issues and the risk of utility assets causing or contributing to wildfires, explosions, mechanical failure, unscheduled downtime, equipment interruptions, remediation, chemical and oil spills, discharges or releases of toxic or hazardous substances or gases and other environment risks. Deaths, injuries and property damage caused by such events can subject AEP to liability that, despite the existence of insurance coverage, can be significant. In addition, AEP may be held responsible for the actions of its contractors. No assurance can be given that future losses will not exceed the limits of AEP’s or its contractors’ insurance coverage. An occurrence of any of these hazards may also result in suspension of operations and the imposition of civil or criminal penalties.

Adverse outcomes in AEP’s material legal proceedings could materially and adversely affect AEP’s results of operations and financial condition. (Applies to all Registrants)

AEP is involved in legal proceedings, claims and litigation arising out of its business operations, the most significant of which are summarized in Note 6 - Commitments, Guarantees and Contingencies. Management cannot predict the outcome of such legal proceedings. Adverse outcomes in these proceedings could require significant expenditures that could reduce future net income and cash flows and negatively impact financial condition.

Disruptions at power generation facilities owned by third-parties could interrupt the sales of transmission and distribution services. (Applies to AEP, AEP Texas and OPCo)

AEP Texas and OPCo transmit and distribute electric power obtained from power generation facilities owned by third-parties or affiliates. If power generation is disrupted or if power generation capacity is inadequate, sales of transmission and distribution services may be diminished or interrupted, and results of operations, financial condition and cash flows could be adversely affected.

Most of the real property rights on which the assets of AEPTCo are situated result from affiliate license agreements and are dependent on the terms of the underlying easements and other rights of its affiliates. (Applies to AEPTCo)

AEPTCo does not hold title to the majority of real property on which its electric transmission assets are located. Instead, under the provisions of certain affiliate contracts, it is permitted to occupy and maintain its facilities upon real property held by the respective AEP subsidiary utility affiliate that overlay its operations. The ability of AEPTCo to continue to occupy such real property is dependent upon the terms of such affiliate contracts and upon the underlying real property rights of these utility affiliates, which may be encumbered by easements, mineral rights and other similar encumbrances that may affect the use of such real property. AEP can give no assurance that (a) the relevant AEP subsidiary utility affiliates will continue to be affiliates of AEPTCo, (b) suitable replacement arrangements can be obtained in the event that the relevant AEP subsidiary utility affiliates are not its affiliates and (c) the underlying easements and other rights are sufficient to permit AEPTCo to operate its assets in a manner free from interruption.

Compliance with legislative and regulatory requirements may lead to increased costs and result in penalties. (Applies to all Registrants)

Business activities of electric utilities and related companies are heavily regulated, primarily through national and state laws and regulations of general applicability, including laws and regulations related to working conditions, health and safety, equal employment opportunity, employee benefit and other labor and employment matters, laws and regulations related to competition and antitrust matters. Many agencies employ mandatory civil penalty structures for regulatory violations. Registrants are subject to the jurisdiction of many federal and state agencies, including the FERC, NERC, Commodity Futures Trading Commission, Federal EPA, NRC, Occupational Safety and Health Administration, the SEC and the United States Department of Justice which may impose significant civil and criminal penalties to enforce compliance requirements relative to AEP’s business, which could have a material adverse impact on results of operations and cash flows and impact financial condition.

The impact of new laws, regulations and policies and the related interpretations, as well as changes in enforcement practices or

regulatory scrutiny generally cannot be predicted, and changes in applicable laws, regulations and policies and the related interpretations and enforcement practices may require extensive system and operational changes, be difficult to implement, increase AEP’s operating costs, require significant capital expenditures, or adversely impact the cost or attractiveness of the products or services AEP offers, or result in adverse publicity and harm AEP’s reputation.

RISKS RELATED TO OWNING AND OPERATING GENERATION ASSETS AND SELLING POWER

Costs of compliance with existing and evolving environmental laws are significant. (Applies to all Registrants except AEPTCo)

AEP’s operations are subject to extensive federal, state and local environmental statutes, rules and regulations relating to air quality, water quality, waste management, natural resources and health and safety. A majority of the electricity generated by AEP is produced by the combustion of fossil fuels. Emissions of nitrogen and sulfur oxides, mercury and particulates and the discharge and disposal of solid waste (including coal-combustion residuals or CCR) resulting from fossil fueled generation plants are subject to increased regulations, controls and mitigation expenses. Compliance with the sometimes evolving criteria of these legal requirements (including any newly adopted requirements and/or more stringent application of existing regulations, including CCR requirements that could result from either agency action or litigation) can be difficult. While management believes AEP complies with current prevailing laws and regulations, there can be no assurance that AEP’s efforts will be deemed to have been sufficient in a litigation or regulatory review context. Compliance requires AEP to commit significant capital toward environmental monitoring, installation of pollution control equipment, emission fees, disposal, remediation and permits at AEP facilities and could require AEP to retire generating capacity prior to the end of its estimated useful life. Costs of compliance with environmental statutes and regulations, and penalties or damages assessed for noncompliance, could reduce future net income and negatively impact financial condition, especially if emission limits, CCR waste discharge and/or discharge disposal obligations are tightened, more extensive operating and/or permitting requirements are imposed or additional substances or facilities become regulated.

Regulation of GHG emissions could materially increase costs to AEP and its customers or cause some electric generating units to be uneconomical to operate or maintain. (Applies to all Registrants except AEP Texas, AEPTCo and OPCo)

Federal or state laws or regulations may be adopted that could impose new or additional limits on the emissions of greenhouse gases, including, but not limited to, carbon dioxide and methane, from electric generation units using fossil fuels like coal. The potential effects of greenhouse gas emission limits on AEP's electric generation units are subject to significant uncertainties based on, among other things, the timing of the implementation of any new requirements, the required levels of emission reductions, the nature of any market-based or tax-based mechanisms adopted to facilitate reductions, the relative availability of greenhouse gas emission reduction offsets, the development of cost-effective, commercial-scale carbon capture and storage technology and supporting regulations and liability mitigation measures, and the range of available compliance alternatives.

AEP’s results of operations could be materially adversely affected to the extent that new federal or state laws or regulations impose any new greenhouse gas emission limits. Any future limits on greenhouse gas emissions could create substantial additional costs in the form of taxes or emissions allowances, require significant capital investment in carbon capture and storage technology, fuel switching, or the replacement of high-emitting generation facilities with lower-emitting generation facilities and/or could cause AEP to retire generating capacity prior to the end of its estimated useful life. Although AEP typically recovers environmental expenditures, there can be no assurance in the future that AEP can recover such costs which could reduce future net income and cash flows and possibly harm financial condition. Further, real or alleged violations of environmental regulations, including those related to climate change, could reduce future net income and cash flows and possibly harm financial condition.

AEP may be unable to procure or construct generation capacity when needed or to recover the costs of such generation capacity. (Applies to all Registrants except AEP Texas, AEPTCo and OPCo)

AEP’s capacity obligations are subject to a number of factors including load growth, requirements that can be imposed by the states, RTOs and other jurisdictions in which it operates or participates as a member and the retirement of existing generating facilities. AEP must obtain new and replacement generation to comply with prevailing capacity needs and reserve obligations. AEP’s ability to acquire, retrofit and/or construct power generation facilities in a timely manner and within budget is contingent upon many variables and subject to substantial risks. These variables include, but are not limited to, project management expertise, escalating costs for capital, materials, labor, and environmental compliance, changes in RTO cost allocation and cost recovery, reliance on suppliers for timely and satisfactory performance, delays and cost increases, and supply chains and material constraints, including those that may result from major storm events. Delays in obtaining permits, challenges in securing suitable land for the siting, shortages in materials and qualified labor, levels of public support or opposition, suppliers and contractors not performing as expected or required under their contracts and/or experiencing financial problems that inhibit

their ability to fulfill their obligations under contracts, changes in the scope and timing of projects, poor quality initial cost estimates from contractors, the inability to raise capital on favorable terms, changes in commodity prices affecting revenue, fuel costs, or materials costs, downward changes in the economy, changes in law or regulation, including environmental compliance requirements, further direct and indirect trade and tariff issues, supply chain delays or disruptions, and other events beyond AEP’s control may occur that may materially affect the schedule, cost, and performance of needed acquisitions or construction projects. In addition, AEP could be exposed to higher costs, penalties and market volatility, which could affect cash flow and cost recovery, should one or more applicable regulator decline to approve the acquisition or construction of the project or new generation needed to meet the reliability needs of customers at the lowest reasonable cost.

Courts adjudicating nuisance and other similar claims in the future may order AEP to pay damages or to limit or reduce emissions. (Applies to all Registrants except AEP Texas and AEPTCo)

In the past, there have been several cases seeking damages based on allegations of federal and state common law nuisance in which AEP, among others, were defendants. In general, the actions allege that emissions from the defendants’ power plants constitute a public nuisance. The plaintiffs in these actions generally seek recovery of damages and other relief. If future actions are resolved against AEP, substantial modifications or retirement of AEP’s existing coal-fired power plants could be required, and AEP might be required to purchase power from third-parties to fulfill AEP’s commitments to supply power to AEP customers. This could have a material impact on revenues. In addition, AEP could be required to invest significantly in additional emission control equipment, accelerate the timing of capital expenditures, pay damages or penalties and/or halt operations. Unless recovered, those costs could reduce future net income and cash flows and harm financial condition. Moreover, results of operations and financial position could be reduced due to the timing of recovery of these investments and the expense of ongoing litigation.

Commodity trading and marketing activities are subject to inherent risks which can be reduced and controlled but not eliminated. (Applies to all Registrants except AEP Texas, AEPTCo and OPCo)

AEP routinely has open trading positions in the market, within guidelines set by AEP, resulting from the management of AEP’s trading portfolio. To the extent open trading positions exist, fluctuating commodity prices can improve or diminish financial results and financial position. AEP’s power trading activities also expose AEP to risks of commodity price movements. To the extent that AEP’s power trading does not hedge the price risk associated with the generation it owns, or controls, AEP would be exposed to the risk of rising and falling spot market prices. In connection with these trading activities, AEP routinely enters into financial contracts, including futures and options, OTC options, financially-settled swaps and other derivative contracts. These activities expose AEP to risks from price movements. If the values of the financial contracts change in a manner AEP does not anticipate, it could harm financial position or reduce the financial contribution of trading operations.

Parties with whom AEP has contracts may fail to perform their obligations, which could harm AEP’s results of operations. (Applies to all Registrants)

AEP sells power from its generation facilities into the spot market and other competitive power markets on a contractual basis. AEP also enters into contracts to purchase and sell electricity, natural gas, emission allowances, renewable energy credits and coal as part of its power marketing and energy trading operations. AEP is exposed to the risk that counterparties that owe AEP money or the delivery of a commodity, including power, could breach their obligations. Should the counterparties to these arrangements fail to perform, AEP may be forced to enter into alternative hedging arrangements or honor underlying commitments at then-current market prices that may exceed AEP’s contractual prices, which would cause financial results to be diminished and AEP might incur losses. Although estimates take into account the expected probability of default by a counterparty, actual exposure to a default by a counterparty may be greater than the estimates predict.

AEP relies on electric transmission facilities that AEP does not own or control. If these facilities do not provide AEP with adequate transmission capacity, AEP may not be able to deliver wholesale electric power to the purchasers of AEP’s power. (Applies to all Registrants)

AEP depends on transmission facilities owned and operated by other nonaffiliated power companies to deliver the power AEP sells at wholesale. This dependence exposes AEP to a variety of risks. If transmission is disrupted, or transmission capacity is inadequate, AEP may not be able to sell and deliver AEP wholesale power. If a region’s power transmission infrastructure is inadequate, AEP’s recovery of wholesale costs and profits may be limited. If restrictive transmission price regulation is imposed, the transmission companies may not have sufficient incentive to invest in expansion of transmission infrastructure.

OVEC may require additional liquidity and other capital support. (Applies to AEP, APCo, I&M and OPCo)

AEP and several nonaffiliated utility companies own OVEC. The Inter-Company Power Agreement (ICPA) defines the rights and obligations and sets the power participation ratio of the parties to it. Under the ICPA, parties are entitled to receive and are obligated to pay for all OVEC capacity (approximately 2,400 MWs) in proportion to their respective power participation ratios. The aggregate power participation ratio of APCo, I&M and OPCo is 43.47%. If a party fails to make payments owed by it under the ICPA, OVEC may not have sufficient funds to honor its payment obligations, including its ongoing operating expenses as well as its indebtedness. As of December 31, 2025, OVEC has outstanding indebtedness of approximately $873 million, of which APCo, I&M and OPCo are collectively responsible for $379 million through the ICPA. Although they are not an obligor or guarantor, APCo, I&M and OPCo are responsible for their respective ratio of OVEC’s outstanding debt through the ICPA and if OVEC’s indebtedness is accelerated for any reason, there is risk that APCo, I&M and/or OPCo may be required to pay some or all of such accelerated indebtedness in amounts equal to their aggregate power participation ratio of 43.47%.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

CYBERSECURITY

Cybersecurity is a critical component of AEP’s risk management framework. As an electric utility operating critical infrastructure, AEP is subject to mandatory requirements under applicable federal, state, and industry standards. AEP maintains a risk-based cybersecurity program designed to protect the confidentiality, integrity, and availability of its information technology, operational technology, and critical infrastructure assets.

Cybersecurity Risk Management and Strategy

AEP’s cybersecurity risk management program is designed to identify, assess, and manage risks from cybersecurity threats, including those posed by third parties. The program incorporates a defense-in-depth approach, leverages partnerships with government and peers to assess the evolving threats and aligns with recognized industry standards and regulatory requirements applicable to electric utilities.

Key elements of AEP’s cybersecurity program include, among others:

•Continuous monitoring and detection of cyber threats;

•Vulnerability assessments and penetration testing;

•Incident response planning and exercises;

•Business continuity and disaster recovery planning;

•Security awareness training, including advanced phishing simulations;

•Third-party risk management, including vendor due diligence and contractual controls;

•Cybersecurity insurance coverage.

AEP regularly evaluates and updates its cybersecurity controls, processes, and technologies in response to the evolving threat landscape and regulatory developments. We leverage both internal expertise and external partners to assist with assessments, testing, and program maturity evaluations.

Governance and Oversight

AEP’s Board of Directors, through the Technology Committee, oversees the cybersecurity program and our approach to cyber risk management. The Technology Committee receives periodic updates from management regarding cybersecurity risks, the threat environment, and the status of AEP’s security programs, including significant incidents, if any.

Management’s Role and Expertise

Management is responsible for implementing and maintaining AEP’s cybersecurity programs. Day-to-day oversight is led by AEP’s Senior Vice President (SVP) of Enterprise Security, Resilience, and National Security Policy who reports to AEP’s Chief Executive Officer. The SVP for Enterprise Security, Resilience, and National Security Policy has expertise in electricity sector risk management, critical infrastructure protection, cybersecurity, and incident response. This individual also oversees and leads AEP’s engagements with Federal agencies on cybersecurity and physical security threat information sharing and

partnerships with the Department of Homeland Security, Federal Bureau of Investigation, Department of Energy, and the intelligence community. The SVP for Enterprise Security, Resilience, and National Security Policy also works closely with AEP’s Chief Information Officer, Generation, Transmission, and Distribution operations leadership, along with legal, compliance, internal audit, and business resilience to help ensure cybersecurity risks are identified, assessed, and managed across the enterprise. Management also provides relevant cybersecurity updates to the Audit Committee.

AEP has not identified any cybersecurity incidents that have materially affected or are reasonably likely to materially affect its business strategy, results of operations, or financial condition.

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