AEP needs changes in regulatory affairs team after 'repeated missteps,' analyst says
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American Electric Power (NASDAQ:AEP) -3.2% in Thursday's trading as Guggenheim Securities said the company needs to "reassess" its leadership in regulatory affairs following "repeated missteps," including the Texas Public Utilities Commission denial of a planned renewables buildout at SWEPCO.
Earlier Thursday, the PUC voted to deny SWEPCO's application for a certificate of convenience and necessity to construct renewable generation facilities, which Guggenheim analyst Shahriar Pourreza said follows similar results in Louisiana and appears to be a "growing theme" for the company.
"This is disappointing, and there's a perception that there's been some notable management misses recently," Pourreza wrote, pointing to the Texas case as another example of AEP's (AEP) "overconfidence in expected outcomes" by the regulatory affairs team, "which has really begun to resonate with investors."
"While fundamentals are a question mark, the real facet of this AEP story is more centered on regulatory strategy and execution," Pouureza wrote, believing AEP's (AEP) new CEO may need to "reassess the company's regulatory affairs leadership and approach given the optics of repeated missteps where unabashed confidence continues to be followed by denials and disappointing outcomes."
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