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ACQUISITIONS AND DISPOSITIONS | 9 Months Ended
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Sep. 30, 2025
Discontinued Operations and Disposal Groups [Abstract] |
ACQUISITIONS AND DISPOSITIONS | ACQUISITIONS AND DISPOSITIONS The disclosures in this note apply to AEP unless indicated otherwise. ACQUISITIONS Green Country Power Plant, Pixley Solar Energy Facility, Flat Ridge IV Wind Energy Facility and Flat Ridge V Wind Energy Facility (Vertically Integrated Utilities Segment) (Applies to AEP and PSO) In May 2025, PSO acquired 100% of the equity interests in Pixley Solar Energy, LLC, the owner of the newly constructed Pixley solar energy facility in Barber County, Kansas. The Pixley facility, placed in service in May 2025, serves both retail and wholesale customers in Oklahoma. PSO’s revenue requirement is recoverable through an authorized rider until it is incorporated into base rates. Regulatory approval of Pixley’s output in retail rates included capital cost, performance and other guarantees, which may subject PSO to future regulatory liabilities. In June 2025, PSO also acquired 100% of the equity interests in Flat Ridge IV Wind, LLC, the owner of the newly constructed Flat Ridge IV Wind Energy Facility located in Kingman and Harper Counties, Kansas. This facility, also placed in service in June 2025, serves both retail and wholesale customers under similar recovery and regulatory provisions as the Pixley facility. The acquisitions of Pixley and Flat Ridge IV also resulted in the recognition of operating leases for easement and access rights to the land on which the facilities are located, as well as the associated AROs. In accordance with the guidance for “Business Combinations,” management determined the acquisitions of Pixley and Flat Ridge IV represent asset acquisitions. Additionally, in June 2025, PSO completed the acquisition of 100% of the equity interests in Green Country Energy, LLC, the owner of a combined-cycle natural gas facility located in Jenks, Oklahoma, following approvals from both the FERC and the OCC. The transaction included the acquisition of a previously executed capacity sales agreement between Green Country Energy, LLC, as seller, and SWEPCo, as purchaser. As a result, beginning in July 2025, PSO will sell a portion of Green Country’s capacity to SWEPCo through May 2027, the end of the agreement’s term. The acquisition also resulted in the extinguishment of a previously executed capacity sales agreement between Green Country Energy, LLC, as seller, and PSO, as purchaser. In accordance with the guidance for “Business Combinations,” management determined the acquisition of Green Country represents an asset acquisition. Asset acquisitions are accounted for using a cost accumulation model, with the cost of the acquisition allocated to the acquired assets and assumed liabilities based on their relative fair value. Upon closing of the transaction, PSO recognized Property, Plant and Equipment of $819 million, an intangible liability of $41 million for the fair value of the acquired SWEPCo capacity sales agreement and a regulatory liability of $50 million, reflective of the recognition and subsequent deferral of the gain from PSO’s extinguished capacity sales agreement. The liabilities recognized for the capacity sales agreements will reduce PSO’s revenue requirement to recover its overall investment in Green Country, which is recoverable through a rider authorized by the OCC until it is included in base rates for the depreciable life of the facility. Management elected the income approach for its nonrecurring valuation of both the intangible liability and regulatory liability. Specifically, management applied a discounted cash flow model based on a forward market price assumption. Furthermore, in August 2025, PSO completed the acquisition of 100% of the equity interests in Flat Ridge V Wind Energy, LLC, the owner of the Flat Ridge V Wind Energy Facility located in Kingman and Harper Counties, Kansas. This facility, placed in service in August 2025, serves both retail and wholesale customers under similar recovery and regulatory provisions as the Flat Ridge IV and Pixley facilities. The acquisition of Flat Ridge V also resulted in the recognition of operating leases for easement and access rights to the land on which the facilities are located, as well as the associated AROs. In accordance with the guidance for “Business Combinations,” management determined the acquisition of Flat Ridge V represents an asset acquisition. As of September 30, 2025, PSO expanded its generation portfolio by acquiring four electric generation facilities for a total of $1.7 billion. The table below summarizes the impact at acquisition on PSO’s balance sheets:
| Plant Name |  | State |  | Fuel Type |  | Generation Capacity (MWs) |  | Property, Plant and Equipment, Net |  | Operating Lease Assets |  |  |  | Asset Retirement Obligations |  | Other Liabilities |
|  |  |  |  |  |  |  |  | (in millions) |
| Green Country |  | OK |  | Natural Gas |  | 795 |  | $ | 818.9 |  |  | $ | — |  |  |  |  | $ | — |  |  | $ | 91.4 |  | (a)
| Pixley |  | KS |  | Solar |  | 189 |  | 379.6 |  |  | 8.9 |  |  |  |  | 12.4 |  |  | — |  |
| Flat Ridge IV |  | KS |  | Wind |  | 135 |  | 305.3 |  |  | 7.4 |  |  |  |  | 3.1 |  |  | — |  |
| Flat Ridge V |  | KS |  | Wind |  | 153 |  | 319.1 |  |  | 8.8 |  |  |  |  | 3.8 |  |  | — |  |
| Total |  |  |  |  |  | 1,272 |  |  | $ | 1,822.9 |  |  | $ | 25.1 |  |  |  |  | $ | 19.3 |  |  | $ | 91.4 |  |
(a)$50 million included in Regulatory Liabilities and Deferred Investment Tax Credits, $21 million included in Other Current Liabilities and $20 million included in Deferred Credits and Other Noncurrent Liabilities on PSO’s balance sheets. DISPOSITIONS Noncontrolling Interest in OHTCo and IMTCo (AEP Transmission Holdco Segment) (Applies to AEP and AEPTCo) In January 2025, AEP announced a partnership whereby nonaffiliated entities will acquire a 19.9% noncontrolling interest in OHTCo and IMTCo. The partnership was structured pursuant to a contribution agreement between AEPTCo, along with Midwest Transmission Holding Company LLC (“Midwest Transmission”), a wholly-owned subsidiary of AEPTCo that owns all the stock of OHTCo and IMTCo, and Olympus BidCo L.P. (“the Investor”), a special purpose entity controlled by (i) investment funds managed by or affiliated with Kohlberg Kravis Roberts & Co. L.P. and (ii) Public Sector Pension Investment Board, whereby the Investor agreed to acquire a 19.9% noncontrolling equity interest in Midwest Transmission for $2.82 billion. The transaction closed in June 2025. AEP received cash proceeds of approximately $2.78 billion, net of transaction costs. Net proceeds are being used to help finance AEP’s capital plan. Disposition of AEP OnSite Partners (Generation & Marketing Segment) (Applies to AEP) In April 2023, AEP initiated a sales process for its ownership in AEP OnSite Partners. AEP OnSite Partners targets opportunities in distributed solar, combined heat and power, energy storage, waste heat recovery, energy efficiency, peaking generation and other energy solutions. In May 2024, AEP signed an agreement to sell AEP OnSite Partners to a nonaffiliated third-party. In September 2024, AEP completed the sale to a nonaffiliated third-party and received cash proceeds of approximately $318 million, net of taxes and transaction costs. The proceeds were used to pay down short-term debt. Disposition of NMRD (Generation & Marketing Segment) (Applies to AEP) In December 2023, AEP and the joint owner signed an agreement to sell NMRD to a nonaffiliated third party and the sale was completed in February 2024. AEP received cash proceeds of approximately $107 million, net of taxes and transaction costs. The transaction did not have a material impact on net income or financial condition.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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