COLUMBUS, Ohio, Aug. 11 /PRNewswire/ -- American Electric Power (NYSE:
AEP) has formed a joint venture company with Duke Energy (NYSE: DUK) to
build and own new electric transmission assets.
Through the 50-50 partnership, AEP and Duke are proposing to build 240
miles of extra-high voltage 765-kilovolt (kV) transmission lines and
related facilities in Indiana. The project would link Greentown Station
(near Kokomo, Ind.) with Rockport Station (east of Evansville, Ind.).
Estimated costs for the project are approximately $1 billion, but final
costs will depend on the routing of the line, equipment and commodity
costs. AEP and Duke will be working with the PJM Interconnection (PJM) and
Midwest ISO (MISO) to determine the optimal configuration for the final
project. The project will be wholly owned by the joint venture. AEP's share
of the costs will be 50 percent of the total.
The project is part of AEP's vision of expanded extra-high voltage
transmission to improve the reliability of the nation's transmission grid,
allow more efficient use of existing electricity production and delivery
infrastructure, protect national security and expand opportunities for new
generation, including renewables.
"The ability of electric utilities to continue providing reliable,
reasonably priced electricity to fuel our nation's economic growth is
increasingly challenged by aging, insufficient infrastructure; continued
growth in electrical load; rising construction costs and a desire to reduce
greenhouse gas emissions. These issues can be managed more successfully
through strategic expansion of our nation's transmission grid, including
significant investment in extra-high voltage transmission," said Michael G.
Morris, AEP chairman, president and chief executive officer.
"Indiana is home to nearly 27,000 megawatts of generation, and the
state's transmission system delivers electricity across the Midwest and
beyond. To continue reliable delivery of this energy and add the output of
new generation that has been proposed in the state, Indiana needs
additional extra-high voltage transmission capacity. A reliable supply of
electricity is fundamental to our quality of life and economic growth, and
Indiana's transmission system, which was largely completed more than 25
years ago, needs to grow as well to continue to meet the needs we have
today and in the future," Morris said.
AEP and Duke will submit the Greentown-Rockport proposal to PJM and
MISO for consideration in their transmission expansion plans. The joint
venture will file in Indiana to operate as a transmission utility and will
file seeking rate approval for the project from the Federal Energy
Regulatory Commission (FERC) in third-quarter 2008. The in-service date for
Greentown- Rockport will be determined by the MISO and PJM planning
processes, with the earliest possible completion in 2014 or 2015.
"Like most parts of the country, Indiana will see significant benefits
from extra-high voltage transmission expansion. The need to build
additional transmission provides the opportunity to invest in a long-term
transmission solution that will facilitate development of additional
generation, including renewables, and support the reliable transport of
electricity to fuel future economic growth. For example, more than 3,000
megawatts of wind power has been proposed in central Indiana, but
additional transmission is necessary to bring it online," said Susan
Tomasky, president, AEP Transmission.
"Building more extra-high voltage 765-kV transmission lines in Indiana
can provide significant economic and environmental benefits. A 765-kV
transmission line requires less land to carry more power than lower voltage
lines, and the 765-kV line would cost less than half as much to build. A
765-kV transmission line also operates more efficiently than lower-voltage
lines, reducing the amount of electricity that needs to be generated by
reducing line loss - electricity lost during transport. The new 765-kV
designs that would be used for this project have line losses of less than
one percent, compared with losses as high as 10 percent for a lower-voltage
alternative," Tomasky said.
The joint venture will operate as a transmission utility and be subject
to the rules and regulations of FERC, the State of Indiana, PJM and MISO.
Equity ownership of the new company will be equally split between AEP and
Duke.
American Electric Power is one of the largest electric utilities in the
United States, delivering electricity to more than 5 million customers in
11 states. AEP ranks among the nation's largest generators of electricity,
owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also
owns the nation's largest electricity transmission system, a nearly
39,000-mile network that includes more 765-kilovolt extra-high voltage
transmission lines than all other U.S. transmission systems combined. AEP's
transmission system directly or indirectly serves about 10 percent of the
electricity demand in the Eastern Interconnection, the interconnected
transmission system that covers 38 eastern and central U.S. states and
eastern Canada, and approximately 11 percent of the electricity demand in
ERCOT, the transmission system that covers much of Texas. AEP's utility
units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and
West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan
Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern
Electric Power Company (in Arkansas, Louisiana and east Texas). AEP's
headquarters are in Columbus, Ohio.
This report made by American Electric Power and its Registrant
Subsidiaries contains forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934. Although the
registrants believe that their expectations are based on reasonable
assumptions, any such statements may be influenced by factors that could
cause actual outcomes and results to be materially different from those
projected. Among the factors that could cause actual results to differ
materially from those in the forward-looking statements are: electric load
and customer growth; weather conditions, including storms; available
sources and costs of, and transportation for, fuels and the
creditworthiness and performance of fuel suppliers and transporters;
availability of generating capacity and the performance of AEP's generating
plants; AEP's ability to recover regulatory assets and stranded costs in
connection with deregulation; AEP's ability to recover increases in fuel
and other energy costs through regulated or competitive electric rates;
AEP's ability to build or acquire generating capacity (including the
company's ability to obtain any necessary regulatory approvals and permits)
when needed at acceptable prices and terms and to recover those costs
(including the costs of projects that are canceled) through applicable rate
cases or competitive rates; new legislation, litigation and government
regulation, including requirements for reduced emissions of sulfur,
nitrogen, mercury, carbon, soot or particulate matter and other substances;
timing and resolution of pending and future rate cases, negotiations and
other regulatory decisions (including rate or other recovery of new
investments in generation, distribution and transmission service and
environmental compliance); resolution of litigation (including disputes
arising from the bankruptcy of Enron Corp. and related matters); AEP's
ability to constrain operation and maintenance costs; the economic climate
and growth in AEP's service territory and changes in market demand and
demographic patterns; inflationary and interest rate trends; volatility in
the financial markets, particularly developments affecting the availability
of capital on reasonable terms and developments impairing AEP's ability to
refinance existing debt at attractive rates; AEP's ability to develop and
execute a strategy based on a view regarding prices of electricity, natural
gas and other energy-related commodities; changes in the creditworthiness
of the counterparties with whom AEP has contractual arrangements, including
participants in the energy trading market; actions of rating agencies,
including changes in the ratings of debt; volatility and changes in markets
for electricity, natural gas, coal, nuclear fuel and other energy-related
commodities; changes in utility regulation, including the implementation of
the recently passed utility law in Ohio and the allocation of costs within
regional transmission organizations; accounting pronouncements periodically
issued by accounting standard-setting bodies; the impact of volatility in
the capital markets on the value of the investments held by AEP's pension,
other postretirement benefit plans and nuclear decommissioning trust;
prices for power that AEP generates and sells at wholesale; changes in
technology, particularly with respect to new, developing or alternative
sources of generation; other risks and unforeseen events, including wars,
the effects of terrorism (including increased security costs), embargoes
and other catastrophic events.
SOURCE American Electric Power
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CONTACT:
Media, Melissa McHenry, Senior Manager,
Corporate Media Relations and Policy Communications,
+1-614-716-1120; or Analysts, Julie Sherwood, Director, Investor
Relations, +1-614-716-2663, both of American Electric Power
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