Indiana Michigan Power seeks approval to acquire Oregon Clean Energy Center as energy demand surges

How is Indiana Michigan Power preparing for a future surge in electricity demand?

Indiana Michigan Power, a subsidiary of American Electric Power Company Inc., has filed a request with the Indiana Utility Regulatory Commission for approval to acquire the 870-megawatt Oregon Clean Energy Center in Oregon, Ohio. This proposed acquisition forms a crucial component of the utility’s “Future Ready” Plan, aimed at meeting rapidly rising energy demand in Indiana and ensuring long-term energy reliability and affordability.

The plant acquisition comes amid forecasts that peak electricity demand in Indiana could increase from 2,800 megawatts in 2024 to over 7,000 megawatts by the early 2030s. In this context, the Oregon Clean Energy Center—powered by natural gas—would play a stabilising role, ensuring around-the-clock power availability for both existing and future industrial, commercial, and residential users.

This transition reflects broader changes across the energy landscape as utilities reposition themselves to handle higher loads and decarbonise their portfolios simultaneously. For Indiana Michigan Power (I&M), diversifying with a modern natural gas facility allows the utility to bridge between coal phase-outs and a renewable-dominant future.

What is the strategic value of the Oregon Clean Energy Center to I&M’s generation mix?

The 870 MW Oregon Clean Energy Center, if approved, will become a cornerstone asset in I&M’s diversified generation portfolio. Natural gas plants, while not renewable, provide a reliable backup to variable solar and wind resources and help maintain grid stability. I&M’s current energy mix already includes over 2,200 MW of nuclear capacity from the D.C. Cook Nuclear Plant in Michigan, nearly 500 MW of wind power sourced from Indiana, and a combination of solar and hydroelectric assets. Coal-fired generation currently accounts for about 1,497 MW but is expected to decline sharply with the retirement of the Rockport Plant by 2028.

The Oregon plant acquisition is structured to support these changes, delivering dispatchable generation capacity while facilitating the transition to cleaner energy sources. The natural gas asset is expected to meet the continuous operational needs of industrial customers that require power availability 24/7.

How does the Oregon acquisition align with I&M’s long-term Integrated Resource Plan?

This acquisition follows I&M’s April 2025 submission of its 2024 Integrated Resource Plan (IRP) to the Indiana Utility Regulatory Commission. The IRP maps out how I&M intends to meet electricity needs through 2044 with an “all-of-the-above” approach that balances cost, reliability, and environmental impact. The plan outlines a vision for energy diversification through natural gas, solar, wind, storage, and nuclear investments.

Among its long-term priorities, I&M is pursuing the relicensing of both units at the D.C. Cook Nuclear Plant, with the goal of extending operations into the 2050s. Nuclear generation continues to be presented as a cornerstone for carbon-free, continuous power. In addition, the plan includes prospective development of Small Modular Reactor (SMR) technology at the Rockport site in Spencer County. I&M has already applied for U.S. Department of Energy grant funding to support the early site permitting process for these advanced reactors, which could contribute around 600 MW of capacity by 2037.

Hydroelectric relicensing, solar expansion, and wind procurement also factor into the roadmap, supported by demand-side initiatives such as energy efficiency programs and customer-driven demand response. The IRP includes stakeholder input gathered from five public advisory workshops held from June 2024 to March 2025.

What are the regulatory and customer implications of this transition?

I&M’s proposal is now subject to regulatory review, with the Indiana Utility Regulatory Commission evaluating whether the acquisition serves the public interest. A final decision is expected in early 2026. Concurrently, I&M will make additional filings throughout 2025 to secure approval for further energy resources outlined in its IRP.

Customer engagement will also play a key role in the transition. I&M has introduced several energy efficiency and demand response programs designed to allow customers to manage consumption patterns, reduce peak demand, and lower overall system costs. These programs are positioned as tools for customers to participate actively in the region’s energy future.

The IRP also acknowledges the role of energy affordability in shaping long-term planning. By balancing renewables with natural gas and maintaining nuclear assets, I&M aims to avoid supply disruptions and keep rates predictable.

What does this mean for American Electric Power Company Inc. and investors?

As the parent company of I&M, American Electric Power Company Inc. (NASDAQ: AEP) is directly impacted by these strategic developments. AEP stock is currently trading at $104.63, reflecting a modest gain in recent sessions and standing roughly 5.3% below its 52-week high of $110.48 recorded in early April 2025. The company holds a market capitalization of approximately $55.84 billion and trades at a price-to-earnings (P/E) ratio of 18.68—slightly below the broader market but above the average for the utilities sector.

The stock offers a dividend yield of 3.56% and maintains a healthy payout ratio of 66.43%, reinforcing its appeal to income-focused investors. Analyst sentiment on AEP is moderately positive, with the consensus rating standing at “Hold.” The average target price is $100.77, suggesting limited upside potential from current levels. However, major institutions such as JPMorgan have reiterated an “Overweight” rating, setting a higher price target of $108.00 based on expectations of long-term growth and infrastructure investments.

Recent financial performance has added to investor confidence. In the fourth quarter of 2024, AEP’s net income rose to $664.1 million, or $1.25 per share, nearly doubling year-over-year. This growth was driven by strong demand from data centers and large commercial customers—trends that mirror the increased load forecasts in I&M’s service territory.

Given the consistent dividend, resilient earnings, and role in the energy transition, AEP stock is viewed as a relatively safe utility holding. Investors looking for stability and long-term capital appreciation may consider maintaining a “Hold” position, with potential to upgrade to “Buy” pending regulatory approvals of key projects like the Oregon acquisition and further clarity on SMR development.

Where does Indiana Michigan Power go from here?

Indiana Michigan Power is moving aggressively to modernise its generation fleet and align with new demand patterns. The proposed acquisition of the Oregon Clean Energy Center exemplifies a strategy designed to ensure 24/7 electricity availability, even as the company retires coal assets and integrates more renewables. Through its IRP, I&M is signaling long-term intent to be a flexible, reliable utility prepared for disruptive growth and changing grid dynamics.

Earlier this month, I&M also released its 2024 Environmental, Social and Governance (ESG) Report, underlining its commitments to ecological protection, energy transition leadership, and community engagement. The ESG strategy complements the Future Ready Plan by reinforcing compliance, transparency, and long-term sustainability.

With regulatory approvals pending and energy demand expected to more than double by 2030, I&M and parent AEP are positioning themselves to lead in a rapidly evolving utilities landscape—blending old and new technologies to serve customer needs today and decades into the future.