Nicholas K. Akins
Chairman, President and Chief Executive Officer at American Electric Power
[Technical Issues]
Over fourth quarter, we are maintaining that momentum and delivering strong results for the first quarter of 2022. With operating earnings for the first quarter coming in at $1.22 per share or $616 million. Earlier this year, we made a number of refinements to our strategic initiatives and financial targets, we raised our 2022 operating earnings guidance range and increased our long-term earnings growth rate and we have hit the ground running in 2022. Today, we are reaffirming our 2022 full-year operating earnings guidance. As a reminder, we are guiding to a range of $4.87 to $5.07 per share for 2022 with a $4.97 midpoint and we also reaffirm our long-term earnings growth rate of 6% to 7%.
As you will recall, we announced several significant developments in connection with last quarter's earnings. In addition to lifting our 14% to 15% FFO to to Total Debt targeted range, we announced the decision to sell all or a portion of contracted renewable assets within the unregulated business. The announcement of this strategic divestiture allowed us to recalibrate our five-year capital plan of $38 billion with a $1.5 billion shift to transmission and the elimination of growth capital in the contracted renewables business. We are already seeing the positive impacts of these initiatives in quarter one, and we look forward to continue to execute in these important areas throughout the course of the year. We also expect to maintain positive momentum in our economic outlook as we work collaboratively with states to drive economic expansion in our service territory.
There is more to come on all that. But I first want to take a step back and highlight some of the other proactive work our team has done. As macro trends continue to affect our industry in the economic landscape at large, we are focused on derisking our platform and elevating our strategy to enhance shareholder value. For example, given lingering global supply chain issues, we are diversifying our mix of suppliers in order to reduce the impact on our capital investment plan. As a result, AEP has experienced minimal customer or business disruptions to date. With these significant initiatives underway and a track record of thinking creatively, it is truly a team effort and we are lucky to have one of the most talented teams in the business.
Regarding Kentucky, we expect to complete the sale of Kentucky Power and AEP Kentucky Transco to Liberty in the second quarter of this year. A regulatory timeline of the sale is on slide 7 of today's presentation. In 2021, we announced a comprehensive, strategic review of our Kentucky operations, resulting in an agreement to sell those assets for $2.846 billion enterprise value. Both parties have been steadily working to obtain the necessary approvals to complete this transaction, which is in the public interest. The Kentucky Public Service Commission hearing was held on March 28 and March 29. We know that Liberty is well positioned to serve Kentucky customers and are confident our employees in Kentucky will continue to thrive within an organization that prioritizes safety and operational excellence.
Based on the statutory requirements, we continue to expect to receive a decision from the Commission on the sales transfer no later than May 4. FERC approval on the sale transfer is also in process. Earlier this week, FERC notified us of a need for more information in the 203 transfer application. This request is not unusual as FERC looks to ensure its record is complete by seeking additional information. We do not believe this request will impact the closing of the deal in the second quarter. Once a decision is made by the state level next week, we will provide the requested information back to FERC. We plan to ask FERC to abide by the original approval timeline to ensure Kentucky customers receive benefits from this transaction in a timely manner.
Another significant regulatory milestone for the transaction is gaining approvals on the Mitchell operating agreement, which are a condition of the final cell transfer. Both Kentucky and West Virginia are aware that updated Mitchell operating agreement approvals are needed to put in place the commission orders on environmental compliance issued 2021. The Kentucky Public Service Commission hearings were held on March 1 and March 30 and the West Virginia Public Service Commission was held on April 7. Parties providing options, allowing flexibility for both states to collaborate and reach a common agreement as Kentucky continues to wind down interest in Mitchell plant post 2028.
We expect to receive commission decisions on the Mitchell agreements on the expedited basis in May of this year. We plan to file the related FERC application after State Commission approvals. Throughout this process, we have established a strong record of benefits of this transaction. Most notably, the clear and measurable customer benefits that we see.
Okay. Now, moving onto the contracted renewable asset sale. During our fourth quarter earnings call in February, we announced the decision to sell all or a portion of our unregulated contracted renewables portfolio to simplify and derisk the company and allow us to focus on our regulated business. Our portfolio consists of 600-megawatt of unregulated contracted renewables. The sale of which will help facilitate the investment of 16,000-megawatt of regulated renewables through 2030. In the last couple of months, we have made significant progress on this opportunity, including working with an advisor preparing outside consultant reviews of the technical and market aspects of our portfolio and evaluating our sales strategy and timing.
Interest in the sale of the portfolio has been robust. The sale provides a unique opportunity to acquire a large operating wind portfolio complemented with some solar operations as well. We expect to launch the sales process sometime during the second half of 2022, likely in the August, September timeframe and it can be accelerated or deaccelerated as needed. Additionally, we are pleased to announce a reassigned term sheet to sell most of our wind and solar development portfolio including five sites, which are located in Southwest Power Pool.
We have also executed an agreement to sell a solar development site here in Ohio. Financial details of these upcoming sales are confidential and will not be disclosed, but demonstrate our commitment toward that execution. The reallocation of contracted renewables capital as assumed in our guidance. The utilization of proceeds is not yet reflected in guidance or our multi-year financing plan. We will seek to maximize transaction proceeds in the sale, avoid dilution and direct the proceeds to investments in our regulated business as we continue to enhance the transmission infrastructure and move forward with our generation fleet transformation.
Looking ahead, we will continue our track record of optimizing the portfolio and reallocating capital to our regulated business where we continue to see a meaningful long-term opportunity for growth. AEP is making significant progress as well in our transition to a clean energy future. In fact, we already have several initiatives underway in line with our sustainability goals and through our regulated renewables execution.
Details can be seen on slides 8 and 9. In March, we commissioned our third and final North Central Wind site Traverse Wind Energy Center, which is the largest single Wind farm built at one time in North America and one of the largest wind facilities worldwide, completing the $2 billion trifecta investment that includes Sundance and the Maverick Wind energy centers. Combined, they are providing 1484-megawatt of clean energy to our customers in Arkansas, Louisiana and Oklahoma. North Central will save customers an estimated $3 billion in electricity costs over the next 30 years.
In March, we also issued a request for proposal for I&M for 800-megawatt of wind and 500-megawatts of solar. Additional RFPs are in process simultaneously at APCo, PSO and SWEPCO with expected in service dates of 2024 to 2025. We expect to make a regulatory filing in the second quarter of this year related to the SWEPCO's June 2021 RFP. These are long-term investments, not just for our business and our local communities, but for the global environment as well. Through our current state of coal retirements, we are progressing towards our target of an 80% carbon emissions reduction rate by 2030 and net zero by 2050.
Achieving this goal is an integral part of our long-term strategy to prioritize regulated investment opportunities and transition our generation portfolio. Our plans are very well thought out. Continue the movement to a clean energy economy but remain firmly grounded in the principles of resiliency, reliability and affordability while recognizing the value of diverse portfolio of resources, particularly given today's world of energy related volatility.
Last year, we set regulatory foundations in a series of rate cases across multiple jurisdictions. Regulated ROE as of March 31, 2022 is at a steady 9.2% as we continue to work through regulatory cases and focus on reducing authorized versus actual ROE spreads. I&M obtained Commission approval in February on our Indiana base case settlement. Ohio -- oral arguments of APCo's 2020 Virginia base case appeal were held in March at the Virginia Supreme Court with an anticipated final decision this year. We expect to see Commission decisions as well on SWEPCO's rate cases this year in both Arkansas and Louisiana and look forward to keeping you informed on that progress too.
Related to FERC, we commend the commission for moving forward with proposed reforms to transmission planning and cost allocation. First proposed rule making aligns with our goals of developing a more robust, reliable and flexible grid of the future that ultimately reduces cost to customers and strengthens economic development in the communities in which we serve. We believe many of these reforms are needed to build the infrastructure necessary to transition our generation fleet in the most efficient and cost-effective way possible and achieve our carbon reduction goals. We look forward to continuing to work collaboratively with the Commission on this, and any subsequent rule makings and with the RTOs on implementing any new requirements.
At the conclusion of our fourth quarter call, I told you all that AEP stood poised to make even greater headway in 2022 and I think it's fair to say we are making good on that promise. Capitalizing on our momentum from 2021, we have continued to execute against our strategic objective steadily and successfully. As we think about what's next for this year and beyond, we hope to further modernize our energy grid in order to supply reliable, cleaner, low cost resources for all the communities we serve. We will also consider further asset rotation through the lens of derisking and simplification and we will evaluate any and all value added potential activities as we focus on our regulated business.
As I have said before, AEP is in a very unique position. The largest transmission system. One of the largest renewables build outs and a diverse territory to adjust from the risk of supply chain, load forecast, regulatory risks etc. AEP is the very definition of consistency and opportunity. We at AEP as well as our shareholders and customers hold ourselves accountable on the continued execution of all of these strategic objectives to paraphrase a big hit by the police, every breath you take, every move you make, every step you take, will be watching AEP. And as our CFO would say, we have got this, Julie?
