American Electric Power Company, Inc. (AEP) Reached Its 52-Week High Today?

Joining the clean energy movement
These decisions fall in line with what the broad majority of the utility sector has been actively pursuing over the last year. Look at The Southern Company (NYSE:SO). Here is a company that had materially trimmed its dependence on coal by Nov. 2012, but that still relies on coal for 47% of its total power generation, according to its 2012 fourth-quarter earnings release. Due to this dependence, Southern is working feverishly on technology for coal gasification in an attempt to cleanse the process of burning coal to generate electricity.

Compare Southern’s portfolio to that of two of its larger competitors, Duke Energy Corp (NYSE:DUK) and Exelon Corporation (NYSE:EXC), and it’s clear that both AEP and Southern have a long way to go before they can begin to consider themselves a provider of clean energy. Duke Energy is working on staying ahead of AEP and Southern by retiring as much as 6,800 megawatts of coal- and oil-fired units. It expects over half of this total to be offline by the end of 2013. Exelon, on the other hand, leads the pack of major utilities on this front; 95% of its portfolio comes from a clean source, the bulk of which is produced from nuclear reactors with solar growing as an important component.

Bottom line for AEP
All in all, it was a positive quarter and year for AEP, but some major changes are likely in its future. With many of its peers reporting slow or negative growth in 2013, its operating growth was clearly well received by the investment community. However, in order to maintain the pace at which its competitors have bought into the clean energy movement, AEP will likely have to assign a greater portion of future cash flows to capital investments or risk incurring fees from the unpredictable Environmental Protection Agency. From an outsider’s perspective, I hope that management takes matters into its own hands rather than rely on the mercy of the government.

The article Which Utility Reached Its 52-Week High Today? originally appeared on Fool.com and is written by Taylor Muckerman.

Taylor Muckerman has no position in any stocks mentioned. The Motley Fool recommends Exelon and Southern Company.

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