EFFECTS OF REGULATION

12 Months Ended

Dec. 31, 2025

Regulatory Assets and Liabilities Disclosure [Abstract]

EFFECTS OF REGULATION

EFFECTS OF REGULATION

The disclosures in this note apply to all Registrants unless indicated otherwise.

Regulated Generating Units (Applies to AEP, PSO and SWEPCo)

Compliance with extensive environmental regulations requires significant capital investment in environmental monitoring, installation of pollution control equipment, emission fees, disposal costs and permits. Management regularly evaluates cost estimates of complying with these regulations in balance with reliability and other factors, which has resulted in, and in the future may result in, a proposal to retire generating facilities earlier than their currently estimated useful lives.

Management is seeking or will seek regulatory recovery, as necessary, for any net book value remaining when the plants are retired. To the extent the net book value of these generation assets is not deemed recoverable, it could reduce future net income and cash flows and impact financial condition.

Regulated Generating Unit that has been Retired and Related Fuel Operations

SWEPCo

In March 2023, the Pirkey Plant was retired. SWEPCo is recovering, or is seeking recovery of, the remaining net book value of Pirkey Plant non-fuel costs. As of December 31, 2025, SWEPCo’s share of the net investment in the Pirkey Plant was $206 million, including materials and supplies, net of cost of removal. Fuel costs are recovered through active fuel clauses and are subject to prudency determinations by the various commissions.

As part of the 2021 Arkansas Base Rate Case, the APSC granted SWEPCo regulatory asset treatment of the Pirkey Plant net investment. SWEPCo requested recovery including a weighted average cost of capital carrying charge in its 2025 Arkansas Base Rate Case. In January 2026, the APSC approved a settlement agreement providing for the recovery of the Pirkey Plant net investment over 10 years with a 3% return, and the agreement also included a provision that the retirement of the Pirkey Plant was prudent. See the “2025 Arkansas Base Rate Case” section of Note 4 for additional information. As of December 31, 2025, the Arkansas jurisdictional share of the net book value of the Pirkey Plant was $41 million.

As part of the 2020 Louisiana Base Rate Case, the LPSC authorized the recovery of SWEPCo’s Louisiana jurisdictional share of the Pirkey Plant, through a separate rider, through 2032.

In July 2023, the LPSC ordered that a separate proceeding be established to review the prudence of the decision to retire the Pirkey Plant, including the costs included in fuel for years starting in 2019 and after. In April 2025, the LPSC determined the retirement of the Pirkey Plant was reasonable and prudent and authorized continued recovery of and on the remaining balance of the Pirkey Plant at SWEPCo’s weighted average cost of capital through 2032.

In July 2023, Texas ALJs issued a PFD that concluded the decision to retire the Pirkey Plant was prudent. In September 2023, the PUCT rejected this conclusion in the ALJ’s July 2023 PFD. SWEPCo requested recovery of the Texas jurisdictional share of the remaining net book value of the Pirkey Plant in its 2025 Texas Base Rate Case. See the “2025 Texas Base Rate Case” section of Note 4 for additional information. As of December 31, 2025, the Texas jurisdictional share of the net book value of the Pirkey Plant was $76 million. To the extent any portion of the Texas jurisdictional share of the net book value of the Pirkey Plant is not recoverable, it could reduce future net income and cash flows and impact financial condition.

In September 2023, the PUCT approved an unopposed settlement agreement that provides recovery of $33 million of Sabine related fuel costs through 2035. In June 2024, SWEPCo filed a fuel reconciliation with the PUCT for its retail operation in Texas for the period of January 2022 through December 2023. The fuel reconciliation included approximately $535 million in Texas jurisdictional eligible fuel costs. In January 2025, intervenors filed testimony recommending a disallowance of Texas jurisdictional fuel costs ranging from $2 million to $33 million related to SWEPCo’s decision to retire the Pirkey Plant, management of fuel inventory and SWEPCo’s energy price offers in SPP. In April 2025, a settlement agreement was filed with the PUCT resolving the issues in the case and resulting in a one-time $6 million disallowance of fuel costs. In July 2025, the PUCT issued an order approving the settlement agreement.

Regulated Generating Units to be Retired

PSO

In 2014, PSO received final approval from the Federal EPA to close Northeastern Plant, Unit 3, in 2026. The plant was originally scheduled to close in 2040. As a result of the early retirement date, PSO revised the useful life of Northeastern Plant, Unit 3, to the projected retirement date of 2026 and the incremental depreciation is being deferred as a regulatory asset. Following the 2024 Oklahoma Base Rate Case, PSO continues to recover Northeastern Plant, Unit 3 through 2040. In April 2025, PSO and the ODEQ finalized a second amended regional haze agreement that would allow continued operation of the Northeastern Plant, Unit 3, on natural gas, through May 31, 2041. This agreement is contingent upon approval by the Federal EPA in the form of a revised SIP. The ODEQ is in the process of preparing a SIP submission for the Federal EPA’s review and approval.

SWEPCo

In November 2020, management announced that it will cease using coal at the Welsh Plant in 2028. As a result of the announcement, SWEPCo began recording a regulatory asset for accelerated depreciation. In December 2024, SWEPCo filed an application for a CCN with the APSC, LPSC and PUCT to convert Welsh Plant, Units 1 and 3 to natural gas in 2028 and 2027, respectively.

The table below summarizes the net book value including CWIP, before cost of removal and materials and supplies, as of December 31, 2025 of generating facilities planned for retirement:

Plant	Net Book Value		Accelerated Depreciation Regulatory Asset		Cost of Removal Regulatory Liability			Projected Retirement Date		Current Authorized Recovery Period	Annual Depreciation (a)
	(dollars in millions)
Northeastern Plant, Unit 3	$	73	$	221	$	21	(b)	2026		(c)	$	15
Welsh Plant, Units 1 and 3	269		220		56		(d)	2028	(e)	(f)	47

(a)Represents the amount of annual depreciation that has been collected from customers over the prior 12-month period.

(b)Includes Northeastern Plant, Unit 4, which was retired in 2016. Removal of Northeastern Plant, Unit 4, will be performed with the removal of Northeastern Plant, Unit 3, after retirement.

(c)Northeastern Plant, Unit 3 is currently being recovered through 2040.

(d)Includes Welsh Plant, Unit 2, which was retired in 2016. Removal of Welsh Plant, Unit 2, will be performed with the removal of Welsh Plant, Units 1 and 3, after retirement.

(e)Represents projected retirement date of coal assets.

(f)Unit 1 is being recovered through 2027 in the Louisiana jurisdiction and through 2037 in the Arkansas and Texas jurisdictions. Unit 3 is being recovered through 2032 in the Louisiana jurisdiction and through 2042 in the Arkansas and Texas jurisdictions.

Regulatory Assets and Liabilities

Regulatory assets and liabilities are comprised of the following items:

	AEP
	December 31,				Remaining Recovery Period
	2025		2024
Current Regulatory Assets	(in millions)
Under-recovered Fuel Costs - does not earn a return	$	202	$	116	1 year
Under-recovered Fuel Costs - earns a return	140		246		1 year
Unrecovered Winter Storm Fuel Costs - earns a return (a)	84		84		1 year
Total Current Regulatory Assets	$	426	$	446
Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:
Regulatory Assets Currently Earning a Return
Welsh Plant, Units 1 and 3 Accelerated Depreciation	$	220	$	169
Pirkey Plant Accelerated Depreciation	93		121
Unified Tracker Mechanism Deferred Costs	56		—
Storm-Related Costs	43		51
Unrecovered Winter Storm Fuel Costs (a)	—		33
Other Regulatory Assets Pending Final Regulatory Approval	23		21
Total Regulatory Assets Currently Earning a Return	435		395
Regulatory Assets Currently Not Earning a Return
Plant Retirement Costs - Asset Retirement Obligation Costs (b)	257		357
Storm-Related Costs (c)	191		301
2024-2025 Virginia Biennial Under-Earnings (d)	172		78
NOLC Costs (e)	89		93
Other Regulatory Assets Pending Final Regulatory Approval	163		87
Total Regulatory Assets Currently Not Earning a Return	872		916
Total Regulatory Assets Pending Final Regulatory Approval	1,307		1,311
Regulatory assets approved for recovery:
Regulatory Assets Currently Earning a Return
Plant Retirement Costs - Unrecovered Plant (f)	470		661		21 years
Long-term Under-recovered Fuel Costs - West Virginia	254		284		9 years
Storm-Related Costs	100		107		6 years
Pirkey Plant Accelerated Depreciation - Louisiana	72		66		7 years
Fuel Mine Closure Costs - Texas	65		71		10 years
Pirkey Plant Accelerated Depreciation - Arkansas	41		—		10 years
PJM/SPP Annual Formula Rate True-up	35		—		2 years
Rockport Plant Dry Sorbent Injection System and Selective Catalytic Reduction	28		37		3 years
Texas Mobile Temporary Emergency Electric Energy Facilities Rider	27		33		2 years
Environmental Control Projects	27		29		15 years
Unrecovered Winter Storm Fuel Costs (a)	22		63		2 years
Plant Retirement Costs - Asset Retirement Obligation Costs	1		111		15 years
Kentucky Deferred Purchased Power Expenses	—		45
Other Regulatory Assets Approved for Recovery	199		204		various
Total Regulatory Assets Currently Earning a Return	1,341		1,711
Regulatory Assets Currently Not Earning a Return
Pension and OPEB Funded Status	796		974		12 years
Plant Retirement Costs - Asset Retirement Obligation Costs	459		360		17 years
Storm-Related Costs	158		67		6 years
Unamortized Loss on Reacquired Debt	85		91		23 years
Cook Plant Nuclear Refueling Outage Levelization	82		43		3 years
Unrealized Loss on Forward Commitments	69		53		7 years
Ohio Enhanced Service Reliability Plan	58		26		2 years
Plant Retirement Costs - Unrecovered Plant, Texas	45		45		21 years
Smart Grid Costs	44		34		2 years
Renewable Resource Rider	38		—		2 years
Bad Debt Rider	35		22		2 years
West Virginia Environmental Compliance Surcharge	33		26		2 years
Postemployment Benefits	28		28		2 years
Fuel and Purchased Power Adjustment Rider	4		57		2 years
OVEC Purchased Power	—		52
Other Regulatory Assets Approved for Recovery	222		229		various
Total Regulatory Assets Currently Not Earning a Return	2,156		2,107
Total Regulatory Assets Approved for Recovery	3,497		3,818
Total Noncurrent Regulatory Assets	$	4,804	$	5,129

(a)In February 2021, severe winter weather had a significant impact in SPP, resulting in significantly increased market prices for natural gas power plants to meet reliability needs for the SPP electric system. For the time period of February 9, 2021 to February 20, 2021, SWEPCo’s natural gas expenses and purchases of electricity still to be recovered from customers are $106 million, of which $22 million, $41 million and $43 million is related to Arkansas, Louisiana and Texas jurisdictions, respectively. Previously, the APSC and PUCT approved recovery with a carrying charge in their jurisdictions over a six-year and five-year period, respectively. In November 2025, the LPSC issued an order approving a recovery period of five years in Louisiana with a carrying charge at the prime rate.

(b)See “Federal EPA’s Revised CCR Rule” section of Note 6 for additional information.

(c)Includes $40 million of West Virginia jurisdictional storm operation and maintenance costs as of December 31, 2025 that are subject to a future final securitization financing order from the WVPSC.

(d)In November 2025, the Virginia SCC issued a financing order approving securitization that includes $141 million of storm operation and maintenance costs as of December 31, 2025 that are subject to a final review by the Virginia SCC after bond pricing.

(e)Approved for collection through rates, subject to refund, for the Oklahoma and SWEPCo-Texas jurisdictions.

(f)Amount includes Northeastern Plant, Unit 3 which is approved for recovery through 2040, but expected to retire in 2026. PSO records a regulatory asset for accelerated depreciation. In April 2025, PSO and the ODEQ finalized an agreement, contingent upon approval by the Federal EPA, that would allow the Northeastern Plant, Unit 3, to continue operation on natural gas through May 31, 2041. See “Regulated Generating Units to be Retired” section above for additional information.

	AEP
	December 31,				Remaining
	2025		2024		Refund Period
Current Regulatory Liabilities	(in millions)
Over-recovered Fuel Costs - pays a return	$	54	$	22	1 year
Over-recovered Fuel Costs - does not pay a return	10		32		1 year
Total Current Regulatory Liabilities	$	64	$	54
Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits
Regulatory liabilities pending final regulatory determination:
Regulatory Liabilities Currently Paying a Return
Income Taxes, Net (a)	$	90	$	176
Total Regulatory Liabilities Currently Paying a Return	90		176
Regulatory Liabilities Currently Not Paying a Return
FERC 2021 Transmission Formula Rate Challenge Refunds	—		131
Other Regulatory Liabilities Pending Final Regulatory Determination	29		15
Total Regulatory Liabilities Currently Not Paying a Return	29		146
Total Regulatory Liabilities Pending Final Regulatory Determination	119		322
Regulatory liabilities approved for payment:
Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	4,023		3,828		(b)
Income Taxes, Net (a)	1,048		1,622		(c)
Green Country Contract Liability	59		—		30 years
Rockport Plant, Unit 2 Accelerated Depreciation for Leasehold Improvements	27		36		4 years
Other Regulatory Liabilities Approved for Payment	39		40		various
Total Regulatory Liabilities Currently Paying a Return	5,196		5,526
Regulatory Liabilities Currently Not Paying a Return
Excess Nuclear Decommissioning Funding	2,557		2,137		(d)
Deferred Investment Tax Credits	64		65		25 years
Demand Side Management	54		53		2 years
Spent Nuclear Fuel	51		50		(d)
Unrealized Gain on Forward Commitments	46		10		3 years
PJM Costs and Off-system Sales Margin Sharing - Indiana	40		2		2 years
Peak Demand Reduction/Energy Efficiency	39		33		2 years
Over-recovered Fuel Costs - Ohio	38		32		7 years
2017-2019 Virginia Triennial Revenue Provision	33		35		24 years
Other Regulatory Liabilities Approved for Payment	125		79		various
Total Regulatory Liabilities Currently Not Paying a Return	3,047		2,496
Total Regulatory Liabilities Approved for Payment	8,243		8,022
Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	8,362	$	8,344

(a)Predominately pays a return due to the inclusion of Excess ADIT in rate base.

(b)Relieved as removal costs are incurred.

(c)Refunded over the period for which the related deferred income taxes reverse, which is generally based on the expected life for the underlying assets. Excess ADIT Associated with Certain Depreciable Property is refunded over the remaining depreciable life of the underlying assets. Excess ADIT that is Not Subject to Rate Normalization Requirements were $269 million and $192 million for the years ended December 31, 2025 and 2024, respectively. The remaining balance of Excess ADIT that is Not Subject to Rate Normalization Requirements as of December 31, 2025 is to be refunded over 8 years.

(d)Relieved when plant is decommissioned.

	AEP Texas
	December 31,				Remaining Recovery Period
Regulatory Assets:	2025		2024
	(in millions)
Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:
Regulatory Assets Currently Earning a Return
Unified Tracker Mechanism Deferred Costs	$	56	$	—
Storm-Related Costs	41		41
System Resiliency Plan Deferred Costs	17		—
Total Regulatory Assets Currently Earning a Return	114		41
Regulatory Assets Currently Not Earning a Return
Storm-Related Costs	31		13
Deferred Pension and OPEB Costs	27		16
Other Regulatory Assets Pending Final Regulatory Approval	9		7
Total Regulatory Assets Currently Not Earning a Return	67		36
Total Regulatory Assets Pending Final Regulatory Approval	181		77
Regulatory assets approved for recovery:
Regulatory Assets Currently Earning a Return
Texas Mobile Temporary Emergency Electric Energy Facilities Rider	27		33		2 years
Meter Replacement Costs	4		6		2 years
Other Regulatory Assets Approved for Recovery	18		22		various
Total Regulatory Assets Currently Earning a Return	49		61
Regulatory Assets Currently Not Earning a Return
Pension and OPEB Funded Status	155		178		12 years
Peak Demand Reduction/Energy Efficiency	13		9		2 years
Texas Transmission Cost Recovery Factor	—		14
Other Regulatory Assets Approved for Recovery	4		15		various
Total Regulatory Assets Currently Not Earning a Return	172		216
Total Regulatory Assets Approved for Recovery	221		277
Total Noncurrent Regulatory Assets	$	402	$	354

	AEP Texas
	December 31,				Remaining Refund Period
Regulatory Liabilities:	2025		2024
	(in millions)
Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits
Regulatory liabilities approved for payment:
Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	$	880	$	844	(b)
Income Taxes, Net (a)	373		409		(c)
Other Regulatory Liabilities Approved for Payment	4		5		various
Total Regulatory Liabilities Currently Paying a Return	1,257		1,258
Regulatory Liabilities Currently Not Paying a Return
Transition and Restoration Charges	17		22		4 years
Transmission Cost Recovery Factor	7		—		2 years
Other Regulatory Liabilities Approved for Payment	5		5		various
Total Regulatory Liabilities Currently Not Paying a Return	29		27
Total Regulatory Liabilities Approved for Payment	1,286		1,285
Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	1,286	$	1,285

(a)Predominately pays a return due to the inclusion of Excess ADIT in rate base.

(b)Relieved as removal costs are incurred.

(c)Refunded over the period for which the related deferred income taxes reverse, which is generally based on the expected life for the underlying assets. Excess ADIT Associated with Certain Depreciable Property is refunded over the remaining depreciable life of the underlying assets. Excess ADIT that is Not Subject to Rate Normalization Requirements were $16 million and $22 million for the years ended December 31, 2025 and 2024, respectively. The remaining balance of Excess ADIT that is Not Subject to Rate Normalization Requirements as of December 31, 2025 is to be refunded over 4 years.

	AEPTCo
	December 31,				Remaining Recovery Period
Regulatory Assets:	2025		2024
	(in millions)
Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:
Regulatory Assets Currently Earning a Return
Income Taxes, Net	$	9	$	—
Total Regulatory Assets Pending Final Regulatory Approval	9		—
Regulatory assets approved for recovery:
Regulatory Assets Currently Earning a Return
Income Taxes, Net	49		—		(a)
PJM/SPP Annual Formula Rate True-up	15		—		2 years
Total Regulatory Assets Approved for Recovery	64		—
Total Noncurrent Regulatory Assets	$	73	$	—

	AEPTCo
	December 31,				Remaining Refund Period
Regulatory Liabilities:	2025		2024
	(in millions)
Noncurrent Regulatory Liabilities
Regulatory liabilities pending final regulatory determination:
Regulatory Liabilities Currently Paying a Return
Income Taxes, Net (b)	$	—	$	9
Total Regulatory Liabilities Pending Final Regulatory Determination	—		9
Regulatory liabilities approved for payment:
Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	708		582		(c)
Income Taxes, Net (b)	—		287		(d)
Total Regulatory Liabilities Approved for Payment	708		869
Total Noncurrent Regulatory Liabilities	$	708	$	878

(a)Recovered over the period for which the related deferred income taxes reverse, which is generally based on the expected life for the underlying assets. Excess ADIT Associated with Certain Depreciable Property is refunded over the remaining depreciable life of the underlying assets. Excess ADIT that is Not Subject to Rate Normalization Requirements was $6 million for the year ended December 31, 2025 and is to be refunded over 2 years.

(b)Predominately pays a return due to the inclusion of Excess ADIT in rate base.

(c)Relieved as removal costs are incurred.

(d)Refunded over the period for which the related deferred income taxes reverse, which is generally based on the expected life for the underlying assets. Excess ADIT Associated with Certain Depreciable Property is refunded over the remaining depreciable life of the underlying assets. Excess ADIT that is Not Subject to Rate Normalization Requirements was $9 million for the year ended December 31, 2024.

	APCo
	December 31,				Remaining Recovery Period
Regulatory Assets:	2025		2024
	(in millions)
Current Regulatory Assets
Under-recovered Fuel Costs, Virginia - earns a return	$	71	$	148	1 year
Under-recovered Fuel Costs, West Virginia - does not earn a return	12		—		1 year
Total Current Regulatory Assets	$	83	$	148
Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:
Regulatory Assets Currently Earning a Return
Other Regulatory Assets Pending Final Regulatory Approval	$	2	$	1
Total Regulatory Assets Currently Earning a Return	2		1
Regulatory Assets Currently Not Earning a Return
Plant Retirement Costs - Asset Retirement Obligation Costs (a)	169		282
2024-2025 Virginia Biennial Under-Earnings (b)	172		78
Storm-Related Costs - West Virginia (c)	39		144
Pension Settlement	16		18
Virginia Corporate Alternative Minimum Tax	13		—
West Virginia Corporate Alternative Minimum Tax	11		—
Other Regulatory Assets Pending Final Regulatory Approval	18		12
Total Regulatory Assets Currently Not Earning a Return	438		534
Total Regulatory Assets Pending Final Regulatory Approval	440		535
Regulatory assets approved for recovery:
Regulatory Assets Currently Earning a Return
Long-term Under-recovered Fuel Costs - West Virginia	138		154		9 years
Plant Retirement Costs - Unrecovered Plant	64		68		18 years
Excess SO2 Allowance Inventory	16		—		14 years
Other Regulatory Assets Approved for Recovery	7		5		various
Total Regulatory Assets Currently Earning a Return	225		227
Regulatory Assets Currently Not Earning a Return
Plant Retirement Costs - Asset Retirement Obligation Costs	404		308		16 years
Storm-Related Costs - West Virginia	107		—		5 years
Pension and OPEB Funded Status	89		108		12 years
Unamortized Loss on Reacquired Debt	63		67		20 years
Virginia Retail Consumable Costs	17		—		2 years
Virginia Transmission Rate Adjustment Clause	16		3		2 years
Virginia Clean Economy Act	16		—		2 years
2020-2022 Virginia Triennial Under-Earnings	14		26		2 years
Postemployment Benefits	13		13		2 years
Vegetation Management Program - West Virginia	12		12		2 years
Peak Demand Reduction/Energy Efficiency	10		14		2 years
Virginia Generation Rate Adjustment Clause	3		12		2 years
Excess SO2 Allowance Inventory	—		11		14 years
Other Regulatory Assets Approved for Recovery	10		30		various
Total Regulatory Assets Currently Not Earning a Return	774		604
Total Regulatory Assets Approved for Recovery	999		831
Total Noncurrent Regulatory Assets	$	1,439	$	1,366

(a)See “Federal EPA’s Revised CCR Rule” section of Note 6 for additional information.

(b)In November 2025, the Virginia SCC issued a financing order approving securitization that includes $141 million of storm operation and maintenance costs as of December 31, 2025 that are subject to a final review by the Virginia SCC after bond pricing.

(c)Includes $40 million of West Virginia jurisdictional storm operation and maintenance costs as of December 31, 2025 that are subject to a future final securitization financing order from the WVPSC.

	APCo
	December 31,				Remaining Refund Period
Regulatory Liabilities:	2025		2024
	(in millions)
Current Regulatory Liabilities
Over-recovered Fuel Costs, West Virginia - does not pay a return	$	—	$	22	1 year
Total Current Regulatory Liabilities	$	—	$	22
Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits
Regulatory liabilities pending final regulatory determination:
Regulatory Liabilities Currently Paying a Return
Income Taxes, Net (a)	$	—	$	(6)
Total Regulatory Liabilities Currently Paying a Return	—		(6)
Regulatory Liabilities Currently Not Paying a Return
FERC 2021 Transmission Formula Rate Challenge Refunds	—		25
Other Regulatory Liabilities Pending Final Regulatory Determination	3		—
Total Regulatory Liabilities Currently Not Paying a Return	3		25
Total Regulatory Liabilities Pending Final Regulatory Determination	3		19
Regulatory liabilities approved for payment:
Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	831		806		(b)
Income Taxes, Net (a)	162		219		(c)
Total Regulatory Liabilities Currently Paying a Return	993		1,025
Regulatory Liabilities Currently Not Paying a Return
Unrealized Loss on Forward Commitments	34		8		3 years
2017-2019 Virginia Triennial Revenue Provision	33		35		24 years
Virginia Environmental Rate Adjustment Clause	18		10		2 years
Energy Efficiency Rate Adjustment Clause - Virginia	16		10		2 years
West Virginia Environmental Compliance Surcharge	11		—		2 years
Other Regulatory Liabilities Approved for Payment	3		9		various
Total Regulatory Liabilities Currently Not Paying a Return	115		72
Total Regulatory Liabilities Approved for Payment	1,108		1,097
Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	1,111	$	1,116

(a)Predominately pays a return due to the inclusion of Excess ADIT in rate base.

(b)Relieved as removal costs are incurred.

(c)Refunded over the period for which the related deferred income taxes reverse, which is generally based on the expected life for the underlying assets. Excess ADIT Associated with Certain Depreciable Property is refunded over the remaining depreciable life of the underlying assets. Excess ADIT that is Not Subject to Rate Normalization Requirements were $11 million and $12 million for the years ended December 31, 2025 and 2024, respectively. The remaining balance of Excess ADIT that is Not Subject to Rate Normalization Requirements as of December 31, 2025 is to be refunded over 3 years.

	I&M
	December 31,				Remaining Recovery Period
Regulatory Assets:	2025		2024
	(in millions)
Current Regulatory Assets
Under-recovered Fuel Costs, Michigan - earns a return	$	—	$	11	1 year
Total Current Regulatory Assets	$	—	$	11
Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:
Regulatory Assets Currently Earning a Return
Other Regulatory Assets Pending Final Regulatory Approval	$	4	$	6
Total Regulatory Assets Currently Earning a Return	4		6
Regulatory Assets Currently Not Earning a Return
Plant Retirement Costs - Asset Retirement Obligation Costs (a)	78		74
Storm-Related Costs - Indiana	29		6
NOLC Costs - Indiana (b)	—		27
Other Regulatory Assets Pending Final Regulatory Approval	7		2
Total Regulatory Assets Currently Not Earning a Return	114		109
Total Regulatory Assets Pending Final Regulatory Approval	118		115
Regulatory assets approved for recovery:
Regulatory Assets Currently Earning a Return
Plant Retirement Costs - Unrecovered Plant	73		98		3 years
Rockport Plant Dry Sorbent Injection System and Selective Catalytic Reduction	28		37		3 years
Cook Plant Uprate Project	18		21		8 years
Deferred Cook Plant Life Cycle Management Project Costs - Michigan, FERC	9		10		9 years
Cook Plant Turbine - Indiana	7		8		13 years
Other Regulatory Assets Approved for Recovery	22		21		various
Total Regulatory Assets Currently Earning a Return	157		195
Regulatory Assets Currently Not Earning a Return
Income Taxes, Net	165		109		(c)
Cook Plant Nuclear Refueling Outage Levelization	82		43		3 years
NOLC Costs - Indiana (b)	19		—		2 years
Storm-Related Costs - Indiana	14		20		3 years
Unamortized Loss on Reacquired Debt	10		11		23 years
Excess SO2 Allowance Inventory - Indiana	9		12		3 years
Pension and OPEB Funded Status	—		15
Other Regulatory Assets Approved for Recovery	11		28		various
Total Regulatory Assets Currently Not Earning a Return	310		238
Total Regulatory Assets Approved for Recovery	467		433
Total Noncurrent Regulatory Assets	$	585	$	548

(a)See “Federal EPA’s Revised CCR Rule” section of Note 6 for additional information.

(b)In the first quarter of 2025, the IURC approved the stand-alone treatment of NOLCs.

(c)Recovered over the period for which the related deferred income taxes reverse, which is generally based on the expected life for the underlying assets. Excess ADIT Associated with Certain Depreciable Property is refunded over the remaining depreciable life of the underlying assets. Excess ADIT that is Not Subject to Rate Normalization Requirements were $6 million and $12 million for the years ended December 31, 2025 and 2024, respectively, and is to be refunded over 2 years.

	I&M
	December 31,				Remaining Refund Period
Regulatory Liabilities:	2025		2024
	(in millions)
Current Regulatory Liabilities
Over-recovered Fuel Costs, Indiana - does not pay a return	$	10	$	10	1 year
Over-recovered Fuel Costs, Michigan - pays a return	9		—		1 year
Total Current Regulatory Liabilities	$	19	$	10
Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits
Regulatory liabilities pending final regulatory determination:
Regulatory Liabilities Currently Not Paying a Return
Cook Plant PTC Deferral - Michigan	$	26	$	15
FERC 2021 Transmission Formula Rate Challenge Refunds	—		29
Other Regulatory Liabilities Pending Final Regulatory Determination	1		—
Total Regulatory Liabilities Currently Not Paying a Return	27		44
Total Regulatory Liabilities Pending Final Regulatory Determination	27		44
Regulatory liabilities approved for payment:
Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	172		174		(a)
Renewable Energy Surcharge - Michigan	22		24		2 years
Other Regulatory Liabilities Approved for Payment	7		—		various
Total Regulatory Liabilities Currently Paying a Return	201		198
Regulatory Liabilities Currently Not Paying a Return
Excess Nuclear Decommissioning Funding	2,557		2,137		(b)
Spent Nuclear Fuel	51		50		(b)
PJM Costs and Off-system Sales Margin Sharing - Indiana	35		2		2 years
Demand Side Management - Indiana	31		33		2 years
Pension and OPEB Funded Status	15		—		12 years
Deferred Investment Tax Credits	13		14		25 years
Other Regulatory Liabilities Approved for Payment	8		3		various
Total Regulatory Liabilities Currently Not Paying a Return	2,710		2,239
Total Regulatory Liabilities Approved for Payment	2,911		2,437
Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	2,938	$	2,481

(a)Relieved as removal costs are incurred.

(b)Relieved when plant is decommissioned.

	OPCo
	December 31,				Remaining Recovery Period
Regulatory Assets:	2025		2024
	(in millions)
Noncurrent Regulatory Assets
Regulatory assets approved for recovery:
Regulatory Assets Currently Earning a Return
Ohio Basic Transmission Cost Rider	$	12	$	26	2 years
Other Regulatory Assets Approved for Recovery	2		—		various
Total Regulatory Assets Currently Earning a Return	14		26
Regulatory Assets Currently Not Earning a Return
Pension and OPEB Funded Status	111		134		12 years
Ohio Enhanced Service Reliability Plan	58		26		2 years
Smart Grid Costs	44		34		2 years
Unrealized Loss on Forward Commitments	33		48		7 years
Bad Debt Rider	27		14		2 years
Storm-Related Costs	18		29		2 years
Ohio Basic Transmission Cost Rider	14		—		2 years
OVEC Purchased Power	—		52
Ohio Distribution Investment Rider	—		11
Other Regulatory Assets Approved for Recovery	7		5		various
Total Regulatory Assets Currently Not Earning a Return	312		353
Total Regulatory Assets Approved for Recovery	326		379
Total Noncurrent Regulatory Assets	$	326	$	379

	OPCo
	December 31,				Remaining Refund Period
	2025		2024
Regulatory Liabilities:	(in millions)
Noncurrent Regulatory Liabilities
Regulatory liabilities pending final regulatory determination:
Regulatory Liabilities Currently Paying a Return
Income Taxes, Net (a)	$	77	$	—
Total Regulatory Liabilities Currently Paying a Return	77		—
Regulatory Liabilities Currently Not Paying a Return
FERC 2021 Transmission Formula Rate Challenge Refunds	—		73
Total Regulatory Liabilities Currently Not Paying a Return	—		73
Total Regulatory Liabilities Pending Final Regulatory Determination	77		73
Regulatory liabilities approved for payment:
Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	470		480		(b)
Income Taxes, Net (a)	271		368		(c)
Other Regulatory Liabilities Approved for Payment	1		4		various
Total Regulatory Liabilities Currently Paying a Return	742		852
Regulatory Liabilities Currently Not Paying a Return
Over-recovered Fuel Costs	38		32		7 years
Peak Demand Reduction/Energy Efficiency	23		23		2 years
Other Regulatory Liabilities Approved for Payment	13		8		various
Total Regulatory Liabilities Currently Not Paying a Return	74		63
Total Regulatory Liabilities Approved for Payment	816		915
Total Noncurrent Regulatory Liabilities	$	893	$	988

(a)Predominately pays a return due to the inclusion of Excess ADIT in rate base.

(b)Relieved as removal costs are incurred.

(c)Refunded over the period for which the related deferred income taxes reverse, which is generally based on the expected life for the underlying assets. Excess ADIT Associated with Certain Depreciable Property is refunded over the remaining depreciable life of the underlying assets. Excess ADIT that is Not Subject to Rate Normalization Requirements were $14 million and $100 million for the years ended December 31, 2025 and 2024, respectively. The remaining balance of Excess ADIT that is Not Subject to Rate Normalization Requirements as of December 31, 2025 is to be refunded over 2 years.

	PSO
	December 31,				Remaining Recovery Period
	2025		2024
Regulatory Assets:	(in millions)
Current Regulatory Assets
Under-recovered Fuel Costs - earns a return	$	37	$	65	1 year
Total Current Regulatory Assets	$	37	$	65
Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:
Regulatory Assets Currently Not Earning a Return
Storm-Related Costs	$	25	$	5
NOLC Costs (a)	23		16
Generation PBA and Delayed Retirement Deferral	13		—
Other Regulatory Assets Pending Final Regulatory Approval	23		9
Total Regulatory Assets Pending Final Regulatory Approval	84		30
Regulatory assets approved for recovery:
Regulatory Assets Currently Earning a Return
Plant Retirement Costs - Unrecovered Plant (b)	302		274		21 years
Storm-Related Costs	90		107		6 years
Environmental Control Projects	20		21		15 years
Meter Replacement Costs	6		10		2 years
Other Regulatory Assets Approved for Recovery	16		14		various
Total Regulatory Assets Currently Earning a Return	434		426
Regulatory Assets Currently Not Earning a Return
Pension and OPEB Funded Status	41		58		12 years
Renewable Resources Rider	38		—		2 years
Unrealized Loss on Forward Commitments	28		4		2 years
Other Regulatory Assets Approved for Recovery	12		10		various
Total Regulatory Assets Currently Not Earning a Return	119		72
Total Regulatory Assets Approved for Recovery	553		498
Total Noncurrent Regulatory Assets	$	637	$	528

(a)Approved for collection through rates, subject to refund.

(b)Amount includes Northeastern Plant, Unit 3 which is approved for recovery through 2040, but expected to retire in 2026. PSO records a regulatory asset for accelerated depreciation. In April 2025, PSO and the ODEQ finalized an agreement, contingent upon approval by the Federal EPA, that would allow the Northeastern Plant, Unit 3, to continue operation on natural gas through May 31, 2041. See “Regulated Generating Units to be Retired” section above for additional information.

	PSO
	December 31,				Remaining Refund Period
	2025		2024
Regulatory Liabilities:	(in millions)
Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits
Regulatory liabilities pending final regulatory determination:
Regulatory Liabilities Currently Not Paying a Return
FERC 2021 Transmission Formula Rate Challenge Refunds	$	—	$	2
Total Regulatory Liabilities Pending Final Regulatory Determination	—		2
Regulatory liabilities approved for payment:
Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	323		324		(a)
Income Taxes, Net (b)	285		318		(c)
Green Country Contract Liability	59		—		30 years
Total Regulatory Liabilities Currently Paying a Return	667		642
Regulatory Liabilities Currently Not Paying a Return
Deferred Investment Tax Credits	47		46		11 years
Other Regulatory Liabilities Approved for Payment	3		—		various
Total Regulatory Liabilities Currently Not Paying a Return	50		46
Total Regulatory Liabilities Approved for Payment	717		688
Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	717	$	690

(a)Relieved as removal costs are incurred.

(b)Predominately pays a return due to the inclusion of Excess ADIT in rate base.

(c)Refunded over the period for which the related deferred income taxes reverse, which is generally based on the expected life for the underlying assets. Excess ADIT Associated with Certain Depreciable Property is refunded over the remaining depreciable life of the underlying assets. Excess ADIT that is Not Subject to Rate Normalization Requirements were $41 million and $46 million for the years ended December 31, 2025 and 2024, respectively. The remaining balance of Excess ADIT that is Not Subject to Rate Normalization Requirements as of December 31, 2025 is to be refunded over 8 years.

	SWEPCo
	December 31,				Remaining Recovery Period
	2025		2024
Regulatory Assets:	(in millions)
Current Regulatory Assets
Unrecovered Winter Storm Fuel Costs - earns a return (a)	$	84	$	84	1 year
Under-recovered Fuel Costs - earns a return (b)	31		23		1 year
Total Current Regulatory Assets	$	115	$	107
Noncurrent Regulatory Assets
Regulatory assets pending final regulatory approval:
Regulatory Assets Currently Earning a Return
Welsh Plant, Units 1 and 3 Accelerated Depreciation	$	220	$	169
Pirkey Plant Accelerated Depreciation	93		121
Storm-Related Costs	2		10
Unrecovered Winter Storm Fuel Costs (a)	—		33
Dolet Hills Power Station Accelerated Depreciation (c)	—		12
Other Regulatory Assets Pending Final Regulatory Approval	1		1
Total Regulatory Assets Currently Earning a Return	316		346
Regulatory Assets Currently Not Earning a Return
NOLC Costs (d)	66		50
Storm-Related Costs - Louisiana, Texas	43		40
Other Regulatory Assets Pending Final Regulatory Approval	20		18
Total Regulatory Assets Currently Not Earning a Return	129		108
Total Regulatory Assets Pending Final Regulatory Approval	445		454
Regulatory assets approved for recovery:
Regulatory Assets Currently Earning a Return
Pirkey Plant Accelerated Depreciation - Louisiana	72		66		7 years
Fuel Mine Closure Costs - Texas	65		71		10 years
Pirkey Plant Accelerated Depreciation - Arkansas	41		—		10 years
Plant Retirement Costs - Unrecovered Plant - Arkansas, Louisiana	31		40		17 years
Unrecovered Winter Storm Fuel Costs (a)	22		63		2 years
Plant Retirement Costs - Unrecovered Plant, Dolet Hills Power Station - Louisiana	15		19		7 years
Dolet Hills Power Station Fuel Costs - Louisiana	14		22		2 years
Dolet Hills Power Station Accelerated Depreciation (c)	13		—		21 years
Storm-Related Costs - Arkansas	10		—		3 years
Other Regulatory Assets Approved for Recovery	18		12		various
Total Regulatory Assets Currently Earning a Return	301		293
Regulatory Assets Currently Not Earning a Return
Pension and OPEB Funded Status	77		93		12 years
Plant Retirement Costs - Unrecovered Plant, Texas	45		45		21 years
Plant Retirement Costs - Unrecovered Plant, Arkansas	10		13		2 years
Other Regulatory Assets Approved for Recovery	25		23		various
Total Regulatory Assets Currently Not Earning a Return	157		174
Total Regulatory Assets Approved for Recovery	458		467
Total Noncurrent Regulatory Assets	$	903	$	921

(a)In February 2021, severe winter weather had a significant impact in SPP, resulting in significantly increased market prices for natural gas power plants to meet reliability needs for the SPP electric system. For the time period of February 9, 2021 to February 20, 2021, SWEPCo’s natural gas expenses and purchases of electricity still to be recovered from customers are $106 million, of which $22 million, $41 million and $43 million is related to Arkansas, Louisiana and Texas jurisdictions, respectively. Previously, the APSC and PUCT approved recovery with a carrying charge in their jurisdictions over a six-year and five-year period, respectively. In November 2025, the LPSC issued an order approving a recovery period of five years in Louisiana with a carrying charge at the prime rate.

(b)2025 amount related to Arkansas and Texas jurisdictions. 2024 amount related to Arkansas, Louisiana and Texas jurisdictions.

(c)Amounts include the FERC jurisdiction.

(d)Approved for collection through rates, subject to refund, for Texas jurisdiction.

	SWEPCo
	December 31,				Remaining Refund Period
	2025		2024
Regulatory Liabilities:	(in millions)
Current Regulatory Liabilities
Over-recovered Fuel Costs - pays a return (a)	$	45	$	22	1 year
Total Current Regulatory Liabilities	$	45	$	22
Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits
Regulatory liabilities pending final regulatory determination:
Regulatory Liabilities Currently Paying a Return
Income Taxes, Net (b)	$	7	$	7
Total Regulatory Liabilities Pending Final Regulatory Determination	7		7
Regulatory liabilities approved for payment:
Regulatory Liabilities Currently Paying a Return
Asset Removal Costs	459		457		(c)
Income Taxes, Net (b)	24		128		(d)
Other Regulatory Liabilities Approved for Payment	6		7		various
Total Regulatory Liabilities Currently Paying a Return	489		592
Regulatory Liabilities Currently Not Paying a Return
Demand Side Management	11		9		2 years
Other Regulatory Liabilities Approved for Payment	24		3		various
Total Regulatory Liabilities Currently Not Paying a Return	35		12
Total Regulatory Liabilities Approved for Payment	524		604
Total Noncurrent Regulatory Liabilities and Deferred Investment Tax Credits	$	531	$	611

(a)2025 amount related to Louisiana and Texas jurisdictions. 2024 amount related to Texas jurisdiction.

(b)Predominately pays a return due to the inclusion of Excess ADIT in rate base.

(c)Relieved as removal costs are incurred.

(d)Refunded over the period for which the related deferred income taxes reverse, which is generally based on the expected life for the underlying assets. Excess ADIT Associated with Certain Depreciable Property is refunded over the remaining depreciable life of the underlying assets.