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Variable Interest Entities | 12 Months Ended
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Dec. 31, 2023
Variable Interest Entities | VARIABLE INTEREST ENTITIES AND EQUITY METHOD INVESTMENTS The disclosures in this note apply to all Registrants unless indicated otherwise. The accounting guidance for “Variable Interest Entities” is a consolidation model that considers if a company has a variable interest in a VIE. A VIE is a legal entity that possesses any of the following conditions: the entity’s equity at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support, equity owners are unable to direct the activities that most significantly impact the legal entity’s economic performance (or they possess disproportionate voting rights in relation to the economic interest in the legal entity), or the equity owners lack the obligation to absorb the legal entity’s expected losses or the right to receive the legal entity’s expected residual returns. Entities are required to consolidate a VIE when it is determined that they have a controlling financial interest in a VIE and therefore, are the primary beneficiary of that VIE, as defined by the accounting guidance for “Variable Interest Entities.” In determining whether AEP is the primary beneficiary of a VIE, management considers whether AEP has the power to direct the most significant activities of the VIE and is obligated to absorb losses or receive the expected residual returns that are significant to the VIE. Management believes that significant assumptions and judgments were applied consistently. AEP holds ownership interests in businesses with varying ownership structures. Partnership interests and other variable interests are evaluated to determine if each entity is a VIE, and if so, whether or not the VIE should be consolidated into AEP’s financial statements. AEP has not provided material financial or other support that was not previously contractually required to any of its consolidated VIEs. If an entity is determined not to be a VIE, or if the entity is determined to be a VIE and AEP is not deemed to be the primary beneficiary, the entity is accounted for under the equity method of accounting. Consolidated Variable Interests Entities Sabine (Applies to AEP and SWEPCo) Sabine is a mining operator providing mining services to SWEPCo. SWEPCo has no equity investment in Sabine but is Sabine’s only customer. SWEPCo guarantees the debt obligations and lease obligations of Sabine. Under the terms of the note agreements, substantially all assets are pledged and all rights under the lignite mining agreement are assigned to SWEPCo. The creditors of Sabine have no recourse to any AEP entity other than SWEPCo. Under the provisions of the mining agreement, SWEPCo is required to pay, as a part of the cost of lignite delivered, an amount equal to mining costs plus a management fee. In addition, SWEPCo determines how much coal will be mined each year. Based on these facts, management concluded that SWEPCo is the primary beneficiary and is required to consolidate Sabine. SWEPCo’s total billings from Sabine for the years ended December 31, 2023, 2022 and 2021 were $101 million, $168 million and $162 million, respectively. As of March 31, 2023, SWEPCo fuel deliveries, including billings of all fixed costs, from Sabine ceased, which resulted in a decrease in billings in 2023 as compared to 2022. See "Pirkey Plant and Related Fuel Operations" section of Note 5 for additional information. See the tables below for the classification of Sabine’s assets and liabilities on SWEPCo’s balance sheets. As part of the process to receive a renewal of a Texas Railroad Commission permit for lignite mining, SWEPCo provides guarantees of mine reclamation of $155 million. Since SWEPCo uses self-bonding, the guarantee commits SWEPCo to complete the reclamation, in the event, Sabine does not complete the work. This guarantee ends upon completion of reclamation. Pirkey Plant was retired in March 2023 and the mine end-of-life has been adjusted accordingly. Reclamation is expected to be complete by 2037 at an estimated cost of $144 million. Actual reclamation costs could vary due to inflation and scope changes to the mine reclamation. SWEPCo recovers these costs through its fuel clauses. As of December 31, 2023, SWEPCo has recorded $134 million of mine reclamation costs in ARO and $34 million in Accounts Payable - Affiliated Companies for collected reclamation costs that have been billed to SWEPCo. SWEPCo has collected $92 million through a rider for reclamation costs. The remaining ARO of $76 million is recorded in Deferred Charges and Other Noncurrent Assets on SWEPCo’s balance sheets. DCC Fuel (Applies to AEP and I&M) I&M has nuclear fuel lease agreements with DCC Fuel, which was formed for the purpose of acquiring, owning and leasing nuclear fuel to I&M. DCC Fuel purchased the nuclear fuel from I&M with funds received from the issuance of notes to financial institutions. Each DCC Fuel entity is a single-lessee leasing arrangement with only one asset and is capitalized with all debt. Each is a separate legal entity from I&M, the assets of which are not available to satisfy the debts of I&M. Payments on the leases for the years ended December 31, 2023, 2022 and 2021 were $97 million, $84 million and $91 million, respectively. The leases were recorded as finance leases on I&M’s balance sheets as title to the nuclear fuel transfers to I&M at the end of the respective lease terms, which do not exceed 54 months. Based on I&M’s control of DCC Fuel, management concluded that I&M is the primary beneficiary and is required to consolidate DCC Fuel. The finance leases are eliminated upon consolidation. See the tables below for the classification of DCC Fuel’s assets and liabilities on I&M’s balance sheets. Transition Funding (Applies to AEP and AEP Texas) Transition Funding was formed for the sole purpose of issuing and servicing securitization bonds related to restructuring legislation in Texas. Management has concluded that AEP Texas is the primary beneficiary of Transition Funding because AEP Texas has the power to direct the most significant activities of the VIE and AEP Texas’ equity interest could potentially be significant. Therefore, AEP Texas is required to consolidate Transition Funding. As of December 31, 2023 and 2022, $72 million and $70 million of the securitized bonds were included in Long-term Debt Due Within One Year - Nonaffiliated, respectively, on the balance sheets. The securitized bonds included in Long-term Debt - Nonaffiliated were immaterial and $71 million as of December 31, 2023 and 2022, respectively, on the balance sheets. Transition Funding has securitized transition assets of $64 million and $125 million as of December 31, 2023 and 2022, respectively, which are presented separately on the face of the balance sheets. The securitized transition assets represent the right to impose and collect Texas true-up costs from customers receiving electric transmission or distribution service from AEP Texas under-recovery mechanisms approved by the PUCT. The securitization bonds are payable only from and secured by the securitized transition assets. The bondholders have no recourse to AEP Texas or any other AEP entity. AEP Texas acts as the servicer for Transition Funding’s securitized transition assets and remits all related amounts collected from customers to Transition Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Transition Funding’s assets and liabilities on the balance sheets. Restoration Funding (Applies to AEP and AEP Texas) Restoration Funding was formed for the sole purpose of issuing and servicing securitization bonds related to storm restoration of AEP Texas’ distribution system primarily due to damage caused by Hurricane Harvey. Management has concluded that AEP Texas is the primary beneficiary of Restoration Funding because AEP Texas has the power to direct the most significant activities of the VIE and AEP Texas’ equity interest could potentially be significant. Therefore, AEP Texas is required to consolidate Restoration Funding. As of December 31, 2023 and 2022, $24 million and $24 million of the securitized bonds were included in Long-term Debt Due Within One Year - Nonaffiliated, respectively, and $126 million and $150 million were included in Long-term Debt - Nonaffiliated, respectively, on the balance sheets. Restoration Funding has securitized assets of $139 million and $161 million as of December 31, 2023 and 2022, respectively, which are presented separately on the face of the balance sheets. The securitized restoration assets represent the right to impose and collect Texas storm restoration costs from customers receiving electric transmission or distribution service from AEP Texas under-recovery mechanisms approved by the PUCT. The securitization bonds are payable only from and secured by the securitized assets. The bondholders have no recourse to AEP Texas or any other AEP entity. AEP Texas acts as the servicer for Restoration Funding’s securitized assets and remits all related amounts collected from customers to Restoration Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Restoration Funding’s assets and liabilities on the balance sheets. Appalachian Consumer Rate Relief Funding (Applies to AEP and APCo) Appalachian Consumer Rate Relief Funding was formed for the sole purpose of issuing and servicing securitization bonds related to APCo’s under-recovered ENEC deferral balance. Management has concluded that APCo is the primary beneficiary of Appalachian Consumer Rate Relief Funding because APCo has the power to direct the most significant activities of the VIE and APCo’s equity interest could potentially be significant. Therefore, APCo is required to consolidate Appalachian Consumer Rate Relief Funding. As of December 31, 2023 and 2022, $27 million and $26 million of the securitized bonds were included in Long-term Debt Due Within One Year - Nonaffiliated, respectively, and $120 million and $147 million were included in Long-term Debt - Nonaffiliated, respectively, on the balance sheets. Appalachian Consumer Rate Relief Funding has securitized assets of $133 million and $160 million as of December 31, 2023 and 2022, respectively, which are presented separately on the face of the balance sheets. The phase-in recovery property represents the right to impose and collect West Virginia deferred generation charges from customers receiving electric transmission, distribution and generation service from APCo under a recovery mechanism approved by the WVPSC. In November 2013, securitization bonds were issued. The securitization bonds are payable only from and secured by the securitized assets. The bondholders have no recourse to APCo or any other AEP entity. APCo acts as the servicer for Appalachian Consumer Rate Relief Funding’s securitized assets and remits all related amounts collected from customers to Appalachian Consumer Rate Relief Funding for interest and principal payments on the securitization bonds and related costs. See the tables below for the classification of Appalachian Consumer Rate Relief Funding’s assets and liabilities on APCo’s balance sheets. AEP Credit (Applies to AEP) AEP Credit is a wholly-owned subsidiary of Parent. AEP Credit purchases, without recourse, accounts receivable from certain utility subsidiaries of AEP to reduce working capital requirements. AEP provides a minimum of 5% equity and up to 35% of AEP Credit’s short-term borrowing needs in excess of third-party financings. Any third-party financing of AEP Credit only has recourse to the receivables securitized for such financing. Based on AEP’s control of AEP Credit, management concluded that AEP is the primary beneficiary and is required to consolidate AEP Credit. See the tables below for the classification of AEP Credit’s assets and liabilities on the balance sheets. See “Securitized Accounts Receivables - AEP Credit” section of Note 14. EIS (Applies to AEP) AEP’s subsidiaries participate in one protected cell of EIS for seven lines of insurance. EIS has multiple protected cells. Neither AEP nor its subsidiaries have an equity investment in EIS. The AEP System is essentially this EIS cell’s only participant, but allows certain third-parties access to this insurance. AEP’s subsidiaries and any allowed third-parties share in the insurance coverage, premiums and risk of loss from claims. Based on AEP’s control and the structure of the protected cell of EIS, management concluded that AEP is the primary beneficiary of the protected cell and is required to consolidate the protected cell of EIS. The insurance premium expense to the protected cell for the years ended December 31, 2023, 2022 and 2021 was $34 million, $31 million and $30 million, respectively. See the tables below for the classification of the protected cell’s assets and liabilities on the balance sheets. The amount reported as equity is the protected cell’s policy holders’ surplus. Transource Energy (Applies to AEP) Transource Energy was formed for the purpose of investing in utilities which develop, acquire, construct, own and operate transmission facilities in accordance with FERC-approved rates. AEP has equity and voting ownership of 86.5% with the other owner having 13.5% interest. Management has concluded that Transource Energy is a VIE and that AEP is the primary beneficiary because AEP has the power to direct the most significant activities of the entity and AEP’s equity interest could potentially be significant. Therefore, AEP is required to consolidate Transource Energy. Transource Energy’s activities consist of the development, construction and operation of FERC-regulated transmission assets in Missouri, West Virginia, Pennsylvania, Maryland and Oklahoma. Transource Energy has a credit facility agreement where borrowings are loaned through intercompany lending agreements to its subsidiaries. The creditor to the agreement has no recourse to the general credit of AEP. Transource Energy’s credit facility agreement contains certain covenants and require it to maintain a percentage of debt-to-total capitalization at a level that does not exceed 67.5%. See the tables below for the classification of Transource Energy’s assets and liabilities on the balance sheets. Competitive Contracted Renewables (Applies to AEP) As of December 31, 2023, Apple Blossom, Black Oak, Santa Rita East and Dry Lake are no longer consolidated VIEs due to the sale of the Competitive Contracted Renewables Portfolio. See the table below for the classification of assets and liabilities on the balance sheets. As of December 31, 2022, nonaffiliated interests in Apple Blossom and Black Oak, Santa Rita East and Dry Lake were $94 million, $58 million and $34 million, respectively, presented in Noncontrolling Interests on the balance sheets. The results of operations for these interests for the years ended December 31, 2023, 2022 and 2021 were not material to the AEP statements of income. The balances below represent the assets and liabilities of the VIEs that are consolidated. These balances include intercompany transactions that are eliminated upon consolidation.
December 31, 2023
| Consolidated VIEs
| SWEPCo Sabine |  | I&M DCC Fuel |  | AEP Texas Transition Funding |  | AEP Texas Restoration Funding |  | APCo Appalachian Consumer Rate Relief Funding |  | AEP Credit |  | Protected Cell of EIS |  | Transource Energy
| (in millions)
ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current Assets | $ | 4.2 |  |  | $ | 81.9 |  |  | $ | 25.5 |  |  | $ | 27.5 |  |  | $ | 13.3 |  |  | $ | 1,208.8 |  |  | $ | 205.3 |  |  | $ | 36.9 |
Net Property, Plant and Equipment | — |  |  | 153.8 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 533.4 |
Other Noncurrent Assets | 150.7 |  | 81.7 |  | 71.4 |  | (a) | 145.6 |  | (b) | 138.2 | (c) | 9.6 |  |  | — |  |  | 5.1 |
Total Assets | $ | 154.9 |  |  | $ | 317.4 |  |  | $ | 96.9 |  |  | $ | 173.1 |  |  | $ | 151.5 |  |  | $ | 1,218.4 |  |  | $ | 205.3 |  |  | $ | 575.4 |
LIABILITIES AND EQUITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current Liabilities | $ | 19.9 |  |  | $ | 81.7 |  |  | $ | 75.5 |  |  | $ | 36.8 |  |  | $ | 29.9 |  |  | $ | 1,155.0 |  |  | $ | 49.2 |  |  | $ | 45.3 |
Noncurrent Liabilities | 134.8 |  |  | 235.7 |  |  | 17.0 |  | 135.1 |  |  | 119.7 |  | 0.9 |  | 91.7 |  |  | 241.5 |
Equity | 0.2 |  | — |  |  | 4.4 |  | 1.2 |  | 1.9 |  | 62.5 |  |  | 64.4 |  |  | 288.6 |
Total Liabilities and Equity | $ | 154.9 |  |  | $ | 317.4 |  |  | $ | 96.9 |  |  | $ | 173.1 |  |  | $ | 151.5 |  |  | $ | 1,218.4 |  |  | $ | 205.3 |  |  | $ | 575.4 |
(a)Includes an intercompany item eliminated in consolidation of $8 million. (b)Includes an intercompany item eliminated in consolidation of $6 million. (c)Includes an intercompany item eliminated in consolidation of $2 million.
American Electric Power Company, Inc. and Subsidiary Companies
Variable Interest Entities
December 31, 2022
| Registrant Subsidiaries |
| SWEPCo Sabine |  | I&M DCC Fuel |  | AEP Texas Transition Funding |  | AEP Texas Restoration Funding |  | APCo Appalachian Consumer Rate Relief Funding |
| (in millions) |
ASSETS |  |  |  |  |  |  |  |  |  |
Current Assets | $ | 108.3 |  |  | $ | 90.2 |  |  | $ | 27.0 |  |  | $ | 21.1 |  |  | $ | 13.5 |  |
Net Property, Plant and Equipment | 7.2 |  |  | 179.1 |  |  | — |  |  | — |  |  | — |  |
Other Noncurrent Assets | 130.0 |  |  | 94.0 |  |  | 140.9 |  | (a) | 168.8 |  | (b) | 164.6 |  | (c)
Total Assets | $ | 245.5 |  |  | $ | 363.3 |  |  | $ | 167.9 |  |  | $ | 189.9 |  |  | $ | 178.1 |  |
LIABILITIES AND EQUITY |  |  |  |  |  |  |  |  |  |
Current Liabilities | $ | 25.4 |  |  | $ | 90.0 |  |  | $ | 73.2 |  |  | $ | 31.3 |  |  | $ | 29.3 |  |
Noncurrent Liabilities | 219.4 |  |  | 273.3 |  |  | 90.4 |  |  | 157.4 |  |  | 146.9 |  |
Equity | 0.7 |  |  | — |  |  | 4.3 |  |  | 1.2 |  |  | 1.9 |  |
Total Liabilities and Equity | $ | 245.5 |  |  | $ | 363.3 |  |  | $ | 167.9 |  |  | $ | 189.9 |  |  | $ | 178.1 |  |
(a)Includes an intercompany item eliminated in consolidation of $16 million. (b)Includes an intercompany item eliminated in consolidation of $7 million. (c)Includes an intercompany item eliminated in consolidation of $2 million.
American Electric Power Company, Inc. and Subsidiary Companies
Variable Interest Entities
December 31, 2022
| Other Consolidated VIEs
| AEP Credit |  | Protected Cell of EIS |  | Transource Energy |  |  |  | Apple Blossom and Black Oak |  | Santa Rita East |  | Dry Lake
| (in millions) |  |
ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |
Current Assets | $ | 1,181.0 |  |  | $ | 194.5 |  |  | $ | 23.5 |  |  |  |  | $ | 8.3 |  |  | $ | 21.3 |  |  | $ | 4.0 |
Net Property, Plant and Equipment | — |  |  | — |  |  | 482.3 |  |  |  |  | 216.5 |  |  | 421.6 |  |  | 142.6 |
Other Noncurrent Assets | 9.0 |  |  | 0.3 |  |  | 2.7 |  |  |  |  | 13.6 |  |  | 0.1 |  |  | 0.3 |
Total Assets | $ | 1,190.0 |  |  | $ | 194.8 |  |  | $ | 508.5 |  |  |  |  | $ | 238.4 |  |  | $ | 443.0 |  |  | $ | 146.9 |
LIABILITIES AND EQUITY |  |  |  |  |  |  |  |  |  |  |  |  |
Current Liabilities | $ | 1,087.8 |  |  | $ | 46.4 |  |  | $ | 22.8 |  |  |  |  | $ | 4.5 |  |  | $ | 9.6 |  |  | $ | 1.0 |
Noncurrent Liabilities | 0.9 |  |  | 79.1 |  |  | 218.6 |  |  |  |  | 5.4 |  |  | 7.3 |  |  | 0.7 |
Equity | 101.3 |  |  | 69.3 |  |  | 267.1 |  |  |  |  | 228.5 |  |  | 426.1 |  |  | 145.2 |
Total Liabilities and Equity | $ | 1,190.0 |  |  | $ | 194.8 |  |  | $ | 508.5 |  |  |  |  | $ | 238.4 |  |  | $ | 443.0 |  |  | $ | 146.9 |
Non-Consolidated Significant Variable Interests DHLC (Applies to AEP and SWEPCo) DHLC is a mining operator which previously sold 50% of the lignite produced to SWEPCo and 50% to CLECO. The operations of DHLC are governed by the lignite mining agreement among SWEPCo, CLECO and DHLC. SWEPCo and CLECO share the executive board seats and voting rights equally. In accordance with the lignite mining agreement, each entity is responsible for 50% of DHLC’s obligations, including debt. SWEPCo and CLECO equally approve DHLC’s annual budget. The creditors of DHLC have no recourse to any AEP entity other than SWEPCo. As SWEPCo is the sole equity owner of DHLC, it receives 100% of the management fee earned by DHLC. In April 2020, SWEPCo and CLECO jointly filed a notification letter to the LPSC providing notice of the cessation of lignite mining. SWEPCo’s total billings from DHLC for the years ended December 31, 2023 and 2022 were not material, and for the year ended December 31, 2021 was $47 million. DHLC paid dividends of $1 million, $25 million, and $0 to SWEPCo for the years ended December 31, 2023, 2022 and 2021, respectively. SWEPCo does not have the power to control decision making that significantly impacts the economic performance of DHLC because such power is shared with CLECO. As a result, SWEPCo is not required to consolidate DHLC as it is not the primary beneficiary, although it holds a significant variable interest in DHLC. SWEPCo’s equity investment in DHLC is included in Deferred Charges and Other Noncurrent Assets on SWEPCo’s balance sheets. SWEPCo’s investment in DHLC was:
| December 31,
| 2023 |  | 2022
| As Reported on the Balance Sheet |  | Maximum Exposure |  | As Reported on the Balance Sheet |  | Maximum Exposure
| (in millions)
Capital Contribution from SWEPCo | $ | 7.6 |  |  | $ | 7.6 |  |  | $ | 7.6 |  |  | $ | 7.6 |
Retained Earnings | 0.4 |  |  | 0.4 |  |  | 0.4 |  |  | 0.4 |
SWEPCo’s Share of Obligations | — |  |  | 19.2 |  |  | — |  |  | 36.8 |
Total Investment in DHLC | $ | 8.0 |  |  | $ | 27.2 |  |  | $ | 8.0 |  |  | $ | 44.8 |
OVEC (Applies to AEP and OPCo) AEP and several nonaffiliated utility companies jointly own OVEC. As of December 31, 2023, AEP’s ownership in OVEC was 43.47%. Parent owns 39.17% and OPCo owns 4.3%. APCo, I&M and OPCo are members to an intercompany power agreement. The Registrants’ power participation ratios are 15.69% for APCo, 7.85% for I&M and 19.93% for OPCo. Participants of this agreement are entitled to receive and are obligated to pay for all OVEC generating capacity, approximately 2,400 MWs, in proportion to their respective power participation ratios. The proceeds from the sale of power by OVEC are designed to be sufficient for OVEC to meet its operating expenses and fixed costs, including outstanding indebtedness, and provide a return on capital. The intercompany power agreement ends in June 2040. AEP and other nonaffiliated owners authorized environmental investments related to their ownership interests. OVEC financed capital expenditures in connection with the engineering and construction of FGD projects and the associated waste disposal landfills at its two generation plants. These environmental projects were funded through debt issuances. As of December 31, 2023 and 2022, OVEC’s outstanding indebtedness was approximately $1.1 billion and $1.1 billion, respectively. Although they are not an obligor or guarantor, the Registrants’ are responsible for their respective ratio of OVEC’s outstanding debt through the intercompany power agreement. Principal and interest payments related to OVEC’s outstanding indebtedness are disclosed in accordance with the accounting guidance for “Commitments.” See the “Commitments” section of Note 6 for additional information. AEP is not required to consolidate OVEC as it is not the primary beneficiary, although AEP and its subsidiary each hold a significant variable interest in OVEC. Power to control decision making that significantly impacts the economic performance of OVEC is shared amongst the owners through their representation on the Board of Directors of OVEC and the representation of the sponsoring companies on the Operating Committee under the intercompany power agreement. AEP’s investment in OVEC was:
| December 31,
| 2023 |  | 2022
| As Reported on the Balance Sheet |  | Maximum Exposure |  | As Reported on the Balance Sheet |  | Maximum Exposure
| (in millions)
Capital Contribution from AEP | $ | 4.4 |  |  | $ | 4.4 |  |  | $ | 4.4 |  |  | $ | 4.4 |
AEP’s Share of OVEC Debt (a) | — |  |  | 465.3 |  |  | — |  |  | 478.2 |
Total Investment in OVEC | $ | 4.4 |  |  | $ | 469.7 |  |  | $ | 4.4 |  |  | $ | 482.6 |
(a)Based on the Registrants’ power participation ratios, APCo, I&M and OPCo’s share of OVEC debt was $168 million, $84 million and $213 million as of December 31, 2023, respectively and $173 million, $86 million and $219 million as of December 31, 2022, respectively. Power purchased by the Registrant Subsidiaries from OVEC is included in Purchased Electricity, Fuel and Other Consumables Used for Electric Generation and Purchased Electricity for Resale on the statements of income and is shown in the table below:
|  | Years Ended December 31,
Company |  | 2023 |  | 2022 |  | 2021
|  | (in millions)
APCo |  | $ | 121.8 |  |  | $ | 119.3 |  |  | $ | 104.3 |
I&M |  | 60.9 |  |  | 59.7 |  |  | 52.2 |
OPCo |  | 154.7 |  |  | 151.8 |  |  | 133.0 |
AEPSC (Applies to Registrant Subsidiaries) AEPSC provides certain managerial and professional services to AEP’s subsidiaries. Parent is the sole equity owner of AEPSC. AEP management controls the activities of AEPSC. The costs of the services are based on a direct-charge or on a prorated basis and billed to the AEP subsidiary companies at AEPSC’s cost. AEP subsidiaries have not provided financial or other support outside of the reimbursement of costs for services rendered. AEPSC finances its operations through cost reimbursement from other AEP subsidiaries. There are no other terms or arrangements between AEPSC and any of the AEP subsidiaries that could require additional financial support from an AEP subsidiary or expose them to losses outside of the normal course of business. AEPSC and its billings are subject to regulation by the FERC. AEP subsidiaries are exposed to losses to the extent they cannot recover the costs of AEPSC through their normal business operations. AEP subsidiaries are considered to have a significant interest in AEPSC due to their activity in AEPSC’s cost reimbursement structure. However, AEP subsidiaries do not have control over AEPSC. AEPSC is consolidated by AEP. In the event AEPSC would require financing or other support outside the cost reimbursement billings, this financing would be provided by AEP. Total AEPSC billings to the Registrant Subsidiaries were as follows:
|  | Years Ended December 31,
Company |  | 2023 |  | 2022 |  | 2021
|  | (in millions)
AEP Texas |  | $ | 228.5 |  |  | $ | 236.8 |  |  | $ | 206.9 |
AEPTCo |  | 269.9 |  |  | 286.6 |  |  | 267.1 |
APCo |  | 324.9 |  |  | 347.5 |  |  | 313.3 |
I&M |  | 178.4 |  |  | 192.4 |  |  | 200.9 |
OPCo |  | 269.5 |  |  | 272.5 |  |  | 234.9 |
PSO |  | 138.6 |  |  | 142.3 |  |  | 123.7 |
SWEPCo |  | 185.1 |  |  | 192.5 |  |  | 168.6 |
The carrying amount and classification of variable interest in AEPSC’s accounts payable were as follows:
|  | December 31,
|  | 2023 |  | 2022
Company |  | As Reported on the Balance Sheet |  | Maximum Exposure |  | As Reported on the Balance Sheet |  | Maximum Exposure
|  | (in millions)
AEP Texas |  | $ | 15.1 |  |  | $ | 15.1 |  |  | $ | 27.8 |  |  | $ | 27.8 |
AEPTCo |  | 17.9 |  |  | 17.9 |  |  | 31.6 |  |  | 31.6 |
APCo |  | 21.1 |  |  | 21.1 |  |  | 41.5 |  |  | 41.5 |
I&M |  | 14.3 |  |  | 14.3 |  |  | 27.7 |  |  | 27.7 |
OPCo |  | 19.0 |  |  | 19.0 |  |  | 31.1 |  |  | 31.1 |
PSO |  | 10.6 |  |  | 10.6 |  |  | 17.7 |  |  | 17.7 |
SWEPCo |  | 12.7 |  |  | 12.7 |  |  | 23.8 |  |  | 23.8 |
AEGCo (Applies to I&M) AEGCo, a wholly-owned subsidiary of Parent, is consolidated by AEP. AEGCo owns a 50% ownership interest in Rockport Plant, Units 1 and 2. AEGCo sells its portion of the output from the Rockport Plant to I&M. AEP has agreed to provide AEGCo with the funds necessary to satisfy all of the debt obligations of AEGCo. I&M is considered to have a significant interest in AEGCo due to these transactions. I&M is exposed to losses to the extent it cannot recover the costs of AEGCo through its normal business operations. In the event AEGCo would require financing or other support outside the billings to I&M, this financing would be provided by AEP. Total billings to I&M from AEGCo for the years ended December 31, 2023, 2022 and 2021 were $181 million, $242 million and $218 million, respectively. The carrying amounts of I&M’s liabilities associated with AEGCo as of December 31, 2023 and 2022 were $15 million and $17 million, respectively. Management estimates the maximum exposure of loss to be equal to the amount of such liability. Significant Equity Method Investment in Unconsolidated Entities (Applies to AEP) For a discussion of the equity method of accounting, see the “Equity Method Investments in Unconsolidated Entities” section of Note 1. AEP Wind Holdings, LLC As of December 31, 2023, AEP no longer owns interests in four joint ventures due to the sale of the Competitive Contracted Renewables Portfolio. Previously held by AEP Wind Holdings, LLC, the interests were accounted for under the equity method. As of December 31, 2022, AEP’s carrying value of the investment in the joint ventures was $247 million and the difference between AEP’s carrying value and the amount of underlying equity in net assets was $62 million. The investment included amounts recognized in AOCI related to interest rate cash flow hedges. AEP’s equity losses associated with the joint venture wind farms were $278 thousand, $194 million and $12 million for the years ended December 31, 2023, 2022 and 2021, respectively. The PTCs attributable to the joint ventures for the years ended December 31, 2023, 2022 and 2021 were not material, which were recorded in Income Tax Expense (Benefit) on the statements of income. See the “Disposition of the Competitive Contracted Renewables Portfolio” and “Impairments” sections of Note 7 for additional information. ETT ETT designs, acquires, constructs, owns and operates certain transmission facilities in ERCOT. BHE, a nonaffiliated entity, holds a 50% membership interest in ETT and AEP Transmission Holdco holds a 50% membership interest in ETT. As a result, AEP, through its wholly-owned subsidiary, holds a 50% membership interest in ETT. As of December 31, 2023 and 2022, AEP’s investment in ETT was $811 million and $762 million, respectively. AEP’s equity earnings associated with ETT were $74 million, $74 million and $66 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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- Definition The entire disclosure for a variable interest entity (VIE), including but not limited to, judgments and assumptions in determining whether to consolidate and in identifying the primary beneficiary, gain (loss) recognized on the initial consolidation of the VIE, terms of arrangements, amounts and classification of the VIE's assets and liabilities, and the entity's maximum exposure to loss. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 810 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//810/tableOfContent + Details
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