The Energy Industry Of The Electric Utilities Industry

1477 WordsApr 11, 20166 Pages
AEP SWEPCO AEP SWEPCO serves a vast market in the electric utilities industry. The energy industry, comes with a host of serious risks that need to be managed, and AEP SWEPCO is no exception. The energy industry is difficult, if not impossible to predict. The corporate risk assessment below discusses AEP’s past and present business, as well as identifies risks and strategies on how to mitigate and manage them. AEP SWEPCO OVERVIEW OF INDUSTRY & CORE BUSINESS: A regulated utility is defined as a corporation that offers an essential or near-essential infrastructure product, commodity, or service with little or no practical substitute. The utilities industry is subject to comprehensive regulation by a regulatory body. The regulators base the rates that they set on cost recovery, including an economic return on assets rather than relying on market price. The utilities market a whole is well established and has a steady demand over the long term. American Electric Power (AEP) Southwestern Electric Power Company (SWEPCO) serves nearly 5.4 million customers in 11 states making it the largest electric utilities company in the United States. It has the largest 40,000 mile electricity transmission network in the nation. It has approximately 32,000 megawatts of generating capacity as well as 765-kilovolt extra-high voltage transmission lines which makes more than all others in the United States combined. There are seven regional electric utilities serving customers across several
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